Executive Summary

Issue for Discussion

The August Fiscal Report is presented for your review, discussion and acceptance.  Although the 2010-11 Enacted Budget provides the Department with a General Fund operating appropriation of $42.6 million, $947,000 of the personal service appropriation will not be allocated to reflect the Department’s share of additional savings.  The Department is achieving these saving through participation in the Early Retirement Incentive Program.   

The Department has also been assigned $4.0 million of an additional $250 million statewide all funds operating reduction included in the final State budget.  Budget Coordination staff are working on a plan which distributes this additional reduction to the Department’s operating accounts while minimizing the impact on the General fund.   Early Retirement Incentive Program savings greater than $947,000 will be used to help achieve the $4.0 million of required savings.

Also attached is a variance report which reflects the allocation of the Federal IDEA grant award for the Federal fiscal year beginning July 1, 2010 and the transfer of $3.5 million from the Professions account to the Education Assessment account for GED ($1.0 million) and Assessments ($2.5 million). 

The $1.0 million of funding for GED allowed the statewide GED test administration contracts to be restarted effective August 12, 2010.  The $2.5 million of funding for Assessments allows for the continuation of January Regents exams, the high school Italian foreign language Regents exam and the translation of exams into Chinese, Haitian-Creole, Korean, Russian and Spanish.

Reason(s) for Consideration

Update on Department State Operations expenditure and revenue projections.

Proposed Handling

Review, discussion and acceptance.

Procedural History

The August report is the fifth report of the new State fiscal year and reflects actual expenditures through August 31, 2010 and projected expenditures through the lapse period ending June 30, 2011.

Background Information

• All Funds – Extensive spending controls continue.
• General Fund –Our General Fund accounts are in structural balance with the exception of the Tenured Teacher Hearing and EMSC accounts as follows:

• The Tenured Teacher Hearing account is projected to have a cumulative deficit of $5.3 million by the end of the current State fiscal year.   The 2010-2011 appropriation for this program is $3.8 million and we currently have $4.2 million of bills on hand, therefore, the appropriation will not even cover the current bills on hand. 
• The EMSC account has a projected deficit of $7.0 million for State Assessments.

• Special Revenue – Our revenue accounts are in structural balance, allowing for normal reimbursement delays and the planned use of prior year balances, with the following exceptions:

• The CE account is not in structural balance due to insufficient revenues to cover its expenses and the expenses of the other agencies and programs it supports including the Summer Schools for the Arts program.
• The Summer Schools for the Arts account is not in structural balance because tuition revenue and the transfer of $500,000 from the CE account are not sufficient to cover the entire cost of the program.  The General Fund appropriation will pay the remaining cost of $195,000.
• 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 – This report reflects current year activity for two year grant awards.

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 August 2010 State Education Department Fiscal Report as presented.

Timetable for Implementation

N/A