Medicare Part D amounts to be booked

Federal Government Retiree Drug Subsidy - Medicare Part D allows for the Texas Public School Retired Employee Group Insurance Program (TRS-Care) to receive retiree drug subsidy payments from the federal government to offset certain prescription drug expenditures for eligible TRS-Care participants.  On-behalf payments must be recognized as equal revenues and expenditures/expenses by each reporting entity.

The allocation of these on-behalf payments is based on the ratio of a reporting entity’s covered payroll to the entire payroll reported by all reporting entities. TRS based this allocation percentage on the "completed" report submissions by reporting entities for the month of May.

TRS has published the amounts to be recorded in your general ledger as on-behalf entries. The list may be found here. Your entry will be to revenue object code 5831 and expenditure object code 6144. We suggest that you assign a sub-object or other identifying optional code to this entry so that your auditors can easily identify it.

GASB 45 Statement for your Auditors

GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions effective in three phases based on a government’s total annual revenues in the first fiscal year ending after June 15, 1999:

• Phase 1 – those with annual revenues of $100 million or more must comply in periods beginning after December 15, 2006.
• Phase 2 – those with total annual revenues of $10 million or more but less than $100 million must comply in periods beginning after December 15, 2007.
• Phase 3 – those with total annual revenues of less than $10 million must comply in periods beginning after December 15, 2008.

This statement establishes standards for the measurement, recognition, and display of other postemployment benefits (OPEB) expense/expenditure and related liabilities (assets), note disclosures, and if applicable required supplementary information (RSI) in the financial reports of state and local government employers.

TRS is furnishing this information to assist reporting entities in complying with the GASB requirements.  Certain information required by GASB 45 will have to be derived from the reporting entity’s payroll records.   Please forward this document to your reporting entity’s financial/accounting manager and your auditor.

Proposed IRS 1099 Reporting Rule--Send your comments!!

The IRS invites your comments on proposed changes to 1099 reporting requirements that will affect all businesses and tax-exempt organizations, including school districts.  The new requirement would require all businesses and tax-exempt organizations to issue a Form 1099 to ALL vendors from whom they buy goods totaling $600 or more annually.  For example, numerous small purchases of office supplies during a calendar year from a local vendor that total at least $600 would trigger the proposed requirement to issue a Form 1099 showing the exact amount of total purchases.  School officials have stated the proposed 1099 reporting requirement will create significant administrative burdens.   

Comments to the IRS on the 1099 reporting requirement are due Sept. 29. 

Comments can be sent electronically to Notice.Comments@irscounsel.treas.gov This e-mail address is being protected from spambots.

Please refer to the IRS Notice for more information: http://www.irs.gov/pub/irs-drop/n-10-51.pdf.

Increase in I-9 form audits by ICE expected

The Society for Human Resource Management (SHRM) recently reported that the volume of penalties for serious and technical violations related to completing I-9 forms in fiscal year (FY) 2010 is expected to far exceed the FY 2009 number.

The increase in violations began in April 2009, when U.S. Immigration and Customs Enforcement (ICE) initiated new worksite compliance strategies that included inspection of Form I-9.

SHRM reports that ICE now uses forensic auditors trained in accounting to find paperwork errors. Oversights or mistakes in filling out the I-9 form may be viewed by auditors as substantive violations. As a result, employers are advised to do the following:

• Train employees that work with I-9 forms
• Conduct an independent audit annually
• Correct any problems detected
• Be prepared for an ICE inspection—employers receive just three days’ notice

Many of the businesses ICE inspects are chosen based on employee reports of illegal aliens being hired.

—Federal Enforcers Wield Big Sticks, by Beth Mirza, Society for Human Resource Management Web site, May 14, 2010.
—“ICE Assistant Secretary John Morton announces 1,000 new workplace audits to hold employers accountable for their hiring practices,” Department of Homeland Security ICE press release, Nov. 19, 2009.

NEW 2010-2011 State Fiscal Stabilization Fund Application Available

The State Fiscal Stabilization Fund (SFSF) Year 2 (2010-2011) eGrant application became available on June 21, 2010, on the TEA Grant Opportunities web page at http://burleson.tea.state.tx.us/GrantOpportunities/forms/GrantProgramSearch.aspx under the name 2010-2011 ARRA Title XIV State Fiscal Stabilization Funds Grant Application.   Please see the To The Administrator Addressed letter posted on June 24, 2010, at http://ritter.tea.state.tx.us/taa/formfund062410.html for more information.  Individual LEA SFSF Year 2 (2010-2011) allocations may be found on the Formula Funding Entitlements by Program web page at http://ritter.tea.state.tx.us/opge/formfund/generalinformation/entitlementsbyprogram.html.

The SFSF Year 2 (2010-2011) grant application guidance webinar, delivered on June 28, 2010, is now available for viewing on the TEA ARRA Webinar webpage at http://www.tea.state.tx.us/index2.aspx?id=5286&menu_id=934&menu_id2=941.

AG Opinion GA-0785 Regarding Salary Increases

The Attorney General has issued an opinion in response to the request for Opinion RQ-0855-GA regarding step increases and HB 3646 increases for 2010-2011. You may find the opinion at this link.

School Finance Update at ESC Region 12 Summer Leadership Conference

Lisa Dawn Fisher presented a school finance update at our recent Summer Leadership Conference. Good information was presented and her presentation is now available at this link.

Fund Balance Policy examples to meet new requirements:

A new board policy is required for the new fund balance requirements for 2010-2011. Rita Chase with TEA states:

"The reason the board should adopt a resolution on the committed funds is that these funds  can be used only for specific purposes decided by the school board. Committed amounts cannot be used for another purpose unless the school board formally reverses or changes the specific purpose for the funds by approving in the minutes (the same action taken to commit). This would need to be in place at the beginning of the new school year.

If the district did not spend all of their high school allotment they need to set this aside this amount for the next year, since these funds are restricted for the high school allotment they would be in the 3400. They do not need formal approval on this."

These two categories could be implemented within a larger fund balance policy that states the District’s overall intent of fund balance size. Within that fund balance policy approved by the Board of Trustees, the District should state the following:

Committed Fund Balance

The Board of Trustees is the District’s highest level of decision-making authority and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board of Trustees at the District’s Board meeting.

Assigned Fund Balance

The Board of Trustees has authorized the District’s Chief Financial Officer (or some other body or official) as the official authorized to assign fund balance to a specific purpose as approved by this fund balance policy.

This wording is straight from GASB 54. Information provided by the audit firm of Belt Harris Pechacek, LLLP, Certified Public Accountants|  www.texasauditors.com

A copy of a board resolution that may be approved by the board may be found at this link.

Schools FIRST Communications Kit Updated for 2010
The Schools FIRST Communications Kit is updated for school districts use for 2010. Two indicators were deleted as a result of bills that passed during the 2009 Legislative Session. With the passage of House Bill 3, 81st Legislative Session, the 65% instructional expenditure ratio requirement was repealed. This resulted in the deletion of prior indicators 13 and 14 related to the 65% instructional expenditure ratio requirement for the ratings issued by the Texas Education Agency in the summer of 2010. This also resulted in the deletion of provisions for posting the check register on the school district’s Internet site, under the 2010 amendment of Title 19, Texas Administrative Code, Chapter 109, Subchapter AA, Commissioner's Rules Concerning Financial Accountability Rating System. To access the Schools FIRST Communications Kit click on the links below. Schools First Kit 2010 and School FIRST Disclosures 2010 .

2009 - 2010 Summer Tax Survey is Open

Districts can login to the FSP System and submit their updated estimates of tax collections for use in 2009-10 near final. It will be open until August 13th, according to Leo Lopez.

2010 Truth In Taxation

The new guide for setting school district tax rates is now available on the State Comptroller's website at this link.

New School Finance 101 Handbook available

TEA's LoneStar

2010 Summer School Program for Limited English Proficient (LEP) Students in Kindergarten and First Grade

TEA Holds Meeting on Financial Solvency

TEA held a Financial Solvency roundtable on April 9th. Here is more information on the results of that meeting.

Updated Information on Use of IDEA, Part B funds

TEA sent out recent correspondence clarifying the use of IDEA, Part B funds. This correspondence may be found at this link.

Immediate Change to Project End Dates for Federal Grants

Please make note of the following TEA Correspondence  http://ritter.tea.state.tx.us/taa/formfund021010.html regarding changes in federal grant fund periods and expenditure report dates. 

Important PEIMS Changes Coming!

TEA recently sent correspondence regarding the PEIMS changes that will take effect beginning with this Summer submission. Please take note of these at this link or our PEIMS website.

Updated ARRA Information

TEA sent correspondence on February 1 regarding updated ARRA guidance and information links. This can be found here.

1099 Instructions

Here is a link to the IRS website with guidance and instructions for 1099s that you may find helpful: http://www.irs.gov/pub/irs-pdf/i1099gi_09.pdf

IRS deadlines

Find important IRS deadline information and other information at http://www.irs.gov/publications/p15/ar02.html .

Required Internet Postings

Here is a link to a current list of required internet postings for school districts.

Financial Accountability Resource Guide Update version 14.0

TEA has published version 14 of the FASRG found here. Please review the What's New section to make yourself aware of all the changes. Also note that the new program compliance rates are included in section 1.8.2.7 moving from 85/15% to 55/45% and 90/10% to 60/40%.

New TRS District Rate beginning January 2010

The new TRS district rate beginning January 2010 is now 6.644%. Please see TRS memo dated December 17, 2009.

IIRS Mileage Reimbursement rates have changed again beginning January 2010! S eage rin beginning Jnauary 2010!

Please see this link for more information.

Other IRS information that may be of interest to you are linked below.

Employee cell phones

Group Term Life insurance

De Minimis fringe benefits

New IRS Tax Tables are now available

The new tax tables and RSCCC installation instructions may be found at this link.

Child Nutrition Form 154 Changes

TRS has replaced form TRS 154, Monthly Child Nutrition Worksheet, with the attached document.   ***Please note this rate will change again begininng in January 2010 to 6.644%. Please make this change on the worksheet.

They consulted with staff from the Texas Department of Agriculture concerning the calculation of the child nutrition contribution based on data from the current Basic Claim form and the attached document is the result of our collaboration.

The following information may be helpful when completing the new TRS 154 for the first time.

1.  Grand total is the entire amount of the Basic Claim.  It is the Grand Total on the last page of the Basic Claim.

2.  Number of Free Meals Served --  The number of meals served is listed by category on the Basic Claim.

3.  Reimbursement Rate for PAID meals --  Although TDA has various rates you are to use the PAID rate for each type of meal served.  If your district is eligible for a higher reimbursement rate, you may use the higher rate in this calculation.

This document will no longer be in the Forms section of the TRS Website.  A copy of the new document will be placed in the EMPLOYERS section of the TRS Website in the areas listed below under the title "Guidelines for Calculating the Child Nutrition Contribution".

Update on Sales Tax Info for School Districts

Updated Sales Tax information was presented at a recent Superintendent's meeting. At this link is a very good handout that explains when and when not to charge sales tax.

Update on Stat Min

Stat Min for Administrators has now been updated from 10 years state step to 20 years. Make sure you have updated your payroll records to reflect this beginning in September. This should save your district some money!

School FIRST Ratings

TEA published the 2009 School FIRST ratings and they can be found here. Make sure your district is in compliance by adhering to the following requirements:

Within two months after receipt of its final School FIRST rating, each school district must announce and hold a public meeting to distribute a financial management report that explains the district’s rating and its performance under each of the 24 indicators for the current and prior year.

And

The district will be required to report on reimbursements to the superintendent and board of trustees members, for the 2007-2008 school year, and either post on the district’s website or supply in the financial management report the current superintendent’s contract. 

A communication kit is available from TASBO's website .

Legislative Changes

Rita Chase with TEA has a powerpoint available here that, beginning on page 28, outlines the legislative changes that impact the school district business offices. There are a number of changes. Please review these changes to make sure your district is in compliance this year and that your district business procedure manual is updated.

TRS & HB 3646

SECTION 97 states:  For purposes of interpreting and implementing Section 825.406, Government Code, the Teacher Retirement System of Texas may not consider salaries of personnel paid in whole or in part from education stabilization funds distributed to school districts under the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5) as being paid from federal funds.

Margie Horton with TRS sent this statement regarding TRS and the section stated above:   the only collection that will not be made on this money is the state’s contribution for Federal Fund/Private Grants and Federal TRS-Care.   A member must pay contributions on all TRS eligible salary.  Unless the payment is considered pay for a wholly separate job, it will be subject to the Statutory Minimum Report.

New Indirect Cost Rates

HB 3646 authorizes specifically, the funds, other than an indirect cost allotment established under State Board of Education (SBOE) rule, which are prohibited from exceeding 45, rather than 15, percent, to be used to meet the costs of providing a compensatory, intensive, or accelerated instruction program under Section 29.081.

In other words, the State Comp Ed indirect cost rate changes to 45% in 2009-2010, leaving 55% direct cost rate replacing the 85% direct cost rate currently required.

The other special programs, Bilingual Ed, Career & Technical, Special Ed & GT, indirect cost rates should be determined by the State Board of Education in November.