Issues Related to the Racine CCDEB Dissolution

Date: July 22, 2004

To: Union Grove UHS, Brighton #1, Dover #1, Raymond #14, Union Grove J1, Yorkville J2,
Waterford UHS, North Cape, Norway J7, Washington-Caldwell, Waterford Graded,
Racine CCDEB, Racine County, CESA #2

From: Jerry Landmark, Assistant Director
School Financial Services Team

Re: Issues Related to the Racine CCDEB dissolution

It is the understanding of the DPI Financial Services Team that the Racine CCDEB will be dissolved as of June 30, 2006. A series of meetings with staff from the affected schools as well as Racine County have brought up a number of issues that are currently being addressed. They include, but are not limited to, the following:

• The districts must ensure that all special education students receive FAPE;

• The Transfer of Service exemption should be available in a timely and appropriate manner; the department is aware of pending transfer of service requests by the affected districts to ensure revenue limit authority to fund programs previously offered by the CCDEB and will be as flexible as possible regarding timelines and requests;

• Accounting procedures for special education services via a consortium;

• District cash flow in the fiscal year 2005-06 due to increased salary and program costs;

• Categorical aid distribution and federal grant availability;

• Assets and liabilities disbursement;

• Prior service liability and post-retirement health insurance issues.

The Financial Services Team will continue to work with the districts to ensure they have the necessary resources to maintain the special education services previously provided by the CCDEB. We will be as flexible as possible regarding transfer of service requests and other issues as discussed with the districts, and reserve the right to request additional financial information as necessary.

The following information is in response to specific requests by the affected districts:

The Finance Team will allow districts to request a Transfer of Service (TOS) for the 2004-05 school year for the purpose of funding a full-time Special Ed Director, and possibly clerical staff, hired by CESA 2 or the individual district starting on or about August 15, 2004. Each district would apply by October 1, 2004 for their share of the cost on a form prescribed by the Finance Team, less the amount a district receives in special education categorical aid. Each district's 2004-05 revenue limit would be increased by the amount of the approved request. In 2005-06, the districts would be able to request a TOS for any cost not previously requested for the Special Ed Director, as well as additional increased costs due to the county transfer, including clerical costs.

The Finance Team will develop and distribute a Transfer of Service request form for districts affected by the Racine CCDEB dissolution. We will have a separate page on the Finance Team website for reference. Brad Adams, Finance Consultant, will work with the districts on the requests.

The Finance Team approves the request submitted by Dave Magar (enclosed) in a February 4, 2004 letter to Jerry Landmark to allow districts involved in the Racine CCDEB dissolution a two-year window of opportunity to request TOS costs. As the CCDEB dissolves as of June 30, 2006, most of the costs will be requested by July 1, 2006 for the 2006-07 school year. However, districts may re-assess costs and re-apply, with explanation, for additional consideration for the 2007-08 school year if additional, unanticipated costs occur.

During a meeting held on May 25th at the Union Grove High School, the question arose as to whether or not a participating district who has entered into a cooperative 66.03 agreement (other than fiscal agent) could hire staff, include the staff member in their payroll, and file for categorical aid. The following information addresses the question by defining guidelines for a CESA packaged program versus a consortium.

If a district participates in a CESA program, normally the CESA hires and pays the staff to provide services. The CESA then bills all participating districts for their share of the costs of the program and files for categorical aid on all eligible costs. We understand that if the Racine CCDEB reimburses districts for costs prior to the dissolution, the CCDEB will file for categorical aid on eligible costs.

In some cases, a school district participating in a CESA program may also hire a staff member and pay the staff's salary. If that happens, the district is commonly known as a host district. The host district then bills the CESA for the total cost of services provided by the staff for the CESA program (including host district portion). The CESA reimburses the host district for the total cost associated with that staff, and then bills all participating districts (including host district) for their portion of the overall cost of the program. The CESA files for state categorical aid on all eligible costs, including costs paid to the host district, and forwards the appropriate portion of the state categorical aid to each participating district.

If districts enter into a 66.03 agreement, they designate one participating district as the fiscal agent. Only the fiscal agent may hire staff, write the checks and claim categorical aid on that staff. A current practice among consortiums of school districts has been to allow any district in the consortium to hire and pay the special ed staff person directly, thus becoming the fiscal agent and creating multiple 66.03 agreements. The district that hires and pays the special ed staff person directly is considered the "fiscal agent," and is then responsible for reporting the person on the PI-1202 staff report as a "special ed" position and filing the claim direct to DPI for state categorical aid. This means you may have "one consortium (one group of districts banded together)" but multiple "fiscal agents" for reporting the special ed staff positions, billing participating districts, and claiming the state categorical aid. Each "fiscal agent" would have to forward the appropriate portion of the state categorical aid to each participating district, including themselves.

The Department will continue to meet and discuss these issues and others that may arise during this process. Please contact the following staff for questions or comments.

Jerry Landmark, 608-266-3464 email:Jerome.Landmark@dpi.wi.gov

Consortium/Co-Op Agreements/Accounting Issues - Kathy Guralski, 608-266-3862 email:Kathryn.Guralski@dpi.wi.gov

Transfer of Service Issues - Brad Adams, 608-267-3752 email:Bradley.Adams@dpi.wi.gov

For questions about this information, contact dpifin@dpi.wi.gov (608) 267-9114

Last updated on 2/25/2008 12:04:34 PM