Indirect Cost Allotments to be considered

9/9/09

The Agenda for the September, 2009 State Board of Education meeting has been posted.  There are three items of interest to School Business Officials to be considered by the Committee on School Finance.

The first, and most important, is the Indirect Cost Allotments which are applied to several Tier I programs.

HB 3646, 81st Texas Legislature, 2009, amended the TEC, §42.152(c), to provide that up to 45%, rather than 15%, may be expended from FSP special allotments for indirect costs. HB 3646 also added the TEC, §42.1541, directing the SBOE to by rule increase the indirect cost allotments established for special education, compensatory education, bilingual education, and career and technical education programs. HB 3646 directs the SBOE to take action not later than the date that permits the increased indirect cost allotments to apply beginning with the 2009-2010 school year.

The Tier I formula amount for these programs has increased dramatically because of a large increase in the Basic Allotment, while the total amount of money available to the district has not increased due to other changes in the formula.  The increased indirect percentages proposed would not limit the amount that the districts are allowed to spend on the program but would allow them keep the required expenditures in the program areas approximately the same as in previous years.  Attachment III to the agenda item illustrates the impact of the proposed changes.

The other proposed changes relate to Changes in Attendance Accounting to align the policy with changes made by the legislature and the Per Capita Apportionment Rate.