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NMPED Update
School Budget &
Finance Analysis Bureau
Emergency Reserve Use
The School Budget and Finance Analysis Bureau is working to finalize final fiscal year 2017 (FY17) reports, including review and verification of fourth quarter (Q4) or twelfth month (M12) cash reports. Constitutional limitations on debt prevent a charter school or school district from closing with a negative position. Various statutory limitations prohibit the use of capital outlay, debt service, categorical or agency funds for Operational purposes. Entities with a negative Operational fund position at year-end are considered to be a higher financial risk. The expectation is that no entity should be closing any fiscal year with a negative Operational fund position. If entities closed FY17 with a negative Operational Fund cash position, they may be instructed to budget emergency reserve amounts, or restrict expenditures, as a budgetary control over spending. Expenditure of funds that have been budgeted in the emergency reserve without written approval of the Secretary is a violation of law. Violators could be subject to corrective actions, up to and including licensure actions against the head of school or licensed school business official.
State Charter Credits
A recent change to the Public School Finance Act (SB 135 being Chapter 78 Section 1, Laws 2017) changed how state equalization guarantee (SEG) is calculated for state-chartered charter schools, requiring the state to take credit for Impact Aid and Forest Reserve federal funds. Provisions in state law also provide for authorizers to take the two percent of administrative withholding from an authorized charter school’s program cost. To ensure proper administrative withholding, the School Budget and Finance Analysis Bureau will include the two percent of program cost withholding figure in the June 2018 final reports to all charter schools and authorizers at that time. This should have minimal to no impact on local authorizers.
School Level PPE
During a recent conference call with U.S. Department of Education (USDE), USDE staff indicated they are still in the process of developing and issuing non-regulatory guidance for the calculation of school-level per pupil expenditures. PED is reticent to issue draft non-regulatory guidance in the absence of federal guidance to avoid conflicts. Regardless, PED will soon begin the process of soliciting input on draft guidance to help identify challenges to implementation and will notify NMASBO members soon.
David Craig