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Monitoring State Aid Trends and What to Watch For

Monitoring State Aid Trends and What to Watch For

As we move into the new school year, it will be critical to monitor State Aid trends. As of 7/27/2020, State Aid calculation sheets have not been posted but comparison numbers have. There will be several different factors that affect State Aid during the coming year, and we will be monitoring them all.  

Though we don’t yet have the actual calculation sheets for the state to put the chargeables into context, we do have FY19 and FY20's reported amounts to compare. As the chart below indicates, Oklahoma schools received $28,227,202.01 less in chargeable revenues between 2019 and 2020. We expect this trend to continue. The loss of chargeables will affect State Aid at some time during FY21.

The School Land Commission payments had an early July payment of $8,124,952.00 to state districts. If this had been received as in prior years, the net school land payment would've been $104,415,882.00 or $4,383,906.00 over the 2019 amount. This may indicate that the School Land Commission intends to maintain previous payment rates, and it may have simply been an administrative issue. We will inquire about this to determine the reasoning for the payment outside the normal fiscal year.  

Chargeable collections comparison between FY19 and 20 sourced from OKTAPS and State Department of Education data.

The State Aid allocation notices sent to schools last week have not been posted on the SDE website yet. The state trends are noted in the table below.  

State Aid differentials from SDE State Aid sheets, including State Aid calculation sheets and district State Aid comparison sheets from FY19, 20 and 21 initial allocation public documents--7/27/2020.

The apparent issue is that State Aid is lower; the initial State Aid difference between FY20 and 21 is $116.25. The initial State Aid comparison sheet shows it is $114.95 lower than we ended FY20 with in terms of per WADM State Aid availability. These numbers will change as different factors are audited and compiled. We will have another set of computations from the SDE during the second week of August that we'll include in the August finance report.  

Fourteen more schools have exited their high-year State Aid number and are now operating on a lower high-year number. This makes checking student weights and counts even more important. We will have a larger WADM number once we get to midterm for a variety of reasons, and the lower State Aid value added with chargeable losses will more than likely cause a continued State Aid allocation and subsequent payment drop. It is critical districts plan now to collect important October 1 numbers and that documentation is in place for all reported numbers. ADM and ADA must be analyzed to ensure all students are correctly counted according to district policy for FY21 and those numbers align with the SDE's audit requirement. Even if a district has virtual students, they must be counted for the purposes of ADM and ADA to protect the district's financial standing.

We will publish our monthly finance report after OMES posts the state's finance numbers. Due to the movement of different payment dates in FY20 to July of FY21, we chose to wait until the data caught up with the actual payment dates. In the August report, we will have end-of-year, beginning-of-the-year and comparison data between FY19, 20 and 21. We understand that sometimes these numbers can be cumbersome, so we will use a graphical comparison and will include an executive summary for a quick glance at the overall financial situation.    

The August numbers will be important for reporting final FY20 income tax collections that were moved back to July 15, 2020 (from the normal April 15 deadline). As we move through the fall months, we should be able to see if state collections show signs of recovery that will prevent a revenue failure in the early months of 2021. Please remember that the usual final property tax payment deadline was moved to July 1. If a district receives larger ad valorem and county 4-mill payments in July, August and September, that is to be expected but should not be expected in future budget years.  

Andy Evans

Director, Finance

Andy serves as the Finance Director for OPSRC. In this role, he provides help in financial and business-related areas for schools. This includes budgets, managing cash flow, Estimate of Needs, federal programs and general service to aid in the effective use of district resources. Additionally, Andy serves as a resource in customizing budget spreadsheets, projection sheets, and other financial tools essential to administrators in maintaining their district’s financial health.

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