SUMMARY

Issue for Discussion

The March 2009 Fiscal Report is presented for review, discussion and acceptance.

The work of the Department is continuing under tight spending controls.  The provisions of these agency spending controls, requiring Division of the Budget and Office of the Director of State Operations prior approval of certain contract and procurement activities, continues to appreciably slow the work and the expenditure levels of the Department.

The March report reflects the unanticipated transfer of $2.83 million from several Special Revenue accounts to the General Fund pursuant to Chapter 497 of the Laws of 2008 which authorizes the Director of the Budget to transfer, across all State agencies, up to $350 million from the unencumbered balance of any special revenue accounts.  One million dollars was also swept from the Summer School for the Arts account and returned to the Cultural Education account from which it originally came.  Transfers from the following SED State Operations revenue accounts are reflected in the attached Variance Report:

• Teacher Certification Account                         - $2,276,000
• Education Library Account                                 - $     50,000
• Proprietary School - Tuition

Reimbursement Account                                    - $   500,000

• Summer School for the Arts Account            - $1,000,000
• Cultural Education Account                  +$1,000,000

In addition, the following Aid to Localities revenue accounts are also affected:

• Charter School Stimulus Account                   -$261,000

(primarily interest earnings)

• Local Government Records Management

Improvement Account                                     -$763,000

Reason(s) for Consideration

              Update on Department State Operations expenditure and revenue projections.

Proposed Handling

              Review, discussion and acceptance.

Procedural History

The March report reflects actual expenditures through the entire 2008-2009 State fiscal year and projected expenditures through the lapse period ending June 30, 2009.

Background Information

• All Funds - Spending controls have been tightened to reflect the 3.35 percent reduction included in the Department’s Financial Management Plan for 2008-2009 and the additional 7 percent mid-year spending reduction.
• General Fund – All of our general fund accounts are in structural balance with the exception of the Tenured Teacher Hearing account.
• Special Revenue – Our revenue accounts are in structural balance (allowing for normal reimbursement delays and the planned use of prior year balances) with the exception of the Cultural Education Account due to declining revenues and increased reliance on the account by other State agencies. After expending prior year funds, the Archives Partnership Trust (APT) will use sufficient revenue from the APT endowment, pursuant to Chapter 399 of the Laws of 1998, to maintain structural balance.
• Federal Accounts – Our federal accounts are in structural balance.

              Our Budget Coordination staff and I will continue to closely monitor each of these accounts and work with program office fiscal staff and the Deputies to ensure structural balance. 

Recommendation

I recommend that the Board of Regents accept the March 2009 State Education Department Fiscal Report as presented.

Timetable for Implementation

              N/A

Attachment I

Attachment II