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Review of Special Education Aid Transits

Wednesday, January 8, 2020

 

As we have been working with LEAs to clean up their PI-1505-SE data, we're seeing that a number of LEAs are choosing to handle transits of special education aid by “netting them out” as billing credits, rather than as separate transactions.

Transits of grant and aid funds must be recorded in full. Accurate reporting of service payments and transits of grant and aid funds is required by law for IDEA Maintenance of Effort (MOE) and other purposes. DPI recommends paying an aid transit separately by check rather than applying it to an invoice as the clearest method to ensure proper accounting.

However, districts and other agencies sometimes apply an aid transit as a discount or credit on an invoice for tuition or other purchased services. While this practice is allowed, the invoice must show the full cost of the service being billed and the transit of aid so both agencies can properly record the transaction. Recording only the net amount results in under-reporting of both LEAs’ expenditures and revenues.

State statute requires that when a resident district pays tuition to another district, a “proportional share” of state or federal aid received by the district of service must be transited back to the resident district within 30 days of its receipt. For reasons of equity and consistency in administering state special education categorical aids, DPI interprets this requirement to apply to all special education services purchased by aid-eligible LEAs.

An LEA of service must transit any grant or aid funds owed to another LEA within 30 days of receipt, as shown on the DPI Aids Register. For IDEA and other grants and aids paid from individual claims, the 30-day requirement applies separately and individually to each claim. For Special Education and School-Age Parents Aid, or any other state or federal aid split into multiple, regular payments throughout the year, the 30-day period begins with the last payment of the year. Grant or aid funds intended to reimburse an expenditure may not be transited until the expenditure is actually incurred.

If you are unsure about how to handle and code transits of aid, we have a couple of helpful documents in the Fund 27 – Special Education section of our WUFAR Issues & Examples page: “Tuition/Purchased Services and Aid Transits” and “Special Education Transaction Coding.”