Question: At year-end districts take a "blanket" budget resolution to the board to make transfers between expenditure classifications (to match actual expenditures). The Ed. Code references are 42600, 42601 and 85201. We have a different resolution for temporary "loans" between funds when needed. Our office feels that the blanket resolution does NOT cover changes (increases) to interfund transfers (7XXX); districts should take a separate resolution to the board. Some districts say it does cover changes to interfund transfers. What's correct?

Response: Ed. Code Sections 42600 and 42601 discuss the authority of the school board to make budget revisions to the district budget. Section 42600 addresses the process when the revisions are during the school year and 42601 allows a blanket resolution for all expenditure categories whose unaudited actuals exceed the current operating budget at year-end.

Ed. Code Section 42603 refers to fund transfers that are necessary because of cash flow issues. The board may adopt a resolution to loan available cash from one fund to another in order to make expenditure payments. The ed. code provides direction on the timeline for repayment of the cash funds.

The school district board adopts an annual budget which includes the categories of transfers out and other uses. I believe that the year-end resolution to balance the expenditure categories of the budget includes these areas. As an example, if a debt service payment (object 7639) needed to be revised, isn't that considered part of the total expenditure budget? The J200 documents separate interfund transfers into a separate section, so that the receiving fund can properly record the expenditure in an object code that specifically identifies the purpose of the expense.

Question: Are there specific provisions for paying or not paying interest charged by vendors for past due accounts? This comes up occasionally in our county.

Response: The general rule is that school districts do not pay late charges or interest. The procedure is to contact the vendor who included a late charge and discuss the situation. Sometimes, the timing of the warrant generating process does not allow the warrant to be issued within the vendor timeline. Most vendors will accommodate the processing schedule. If the payment is delayed due to a disagreement on the amount of the invoice, the receipt of the goods, or any other issue, contact the vendor immediately to discuss the problem. In addition, document in writing the basis of the dispute.

If the delay in payment is due to an employee problem, the immediate supervisor of the employee should be notified and corrective action taken. Action can include the reassignment of certain duties to allow sufficient time for processing, or an employee reprimand.

Question: Miller-Unruh money has come in for 1993-94 year and 1994-95 year as well as 75% of the 1996-97 award. How do I account for the prior year money on the J390 report?

Response: I contacted Maria Fong with the California Department of Education. She indicated that the district should go back and determine if they spent more than they received for Miller-Unruh in the years that are now being fully funded. If so, the income should be recorded as current year income; then journaled out of current year income into contributions to restricted programs as a reverse contribution. That is, to repay the unrestricted general fund for the amount of encroachment during those previous years.

Question: Seems to be some confusion on correct indirect cost rates. We were told at an inservice that a management advisory has been issued stating that now districts can use either their J380 rate OR the MAXIMUM allowed by the program. Is this correct? Or is rule to use either J380, or maximum allowed, whichever is less?

Response: Pat Keegan put out a letter on September 16,1996, that discusses the new method for determining restricted indirect cost rates for school districts and county offices of education. You may access this letter by using the Internet on the FCMAT home page, going through CDE. The actual address of the letter is:

http://www.cde.ca.gov/ftpbranch/sbsdiv/advisory/indirect.htm

The current method will continue to be used for 1996-97 expenditure data with the new method beginning with the 1997-98 expenditure data.

Question: What is the new revised legal bid limit? I have heard two different amounts - $51,500 and $51,850.

Response: Each source that FCMAT has identifies $51,500 as the formal bid limit. This reflects the $50,000 base limit that is adjusted annually to reflect the percentage change in the annual average value of the Implicit Price Deflator for State and Local Government Purchases of Goods and Services for the United States, as published by the United States Department of Commerce for the 12-month period ending in the prior fiscal year.

Our sources include CSBA Policy Manual, CASBO Accounts Payable Manual, and Public Contract Code 20111 and 20651.