Preproposal statement of inquiry was filed as WSR 98-09-043.

Title of Rule: Vocational funding requirements.

Purpose: To implement legislative requirements for school district vocational-secondary programs including: Establishing a ten percent limit on indirect charges to vocational secondary programs, and establishing minimum staff/student ratios for receiving enhanced state vocational staff allocations.

(1) The Objective of the Rule: To implement vocational funding requirements including: A limit on indirect cost charges to vocational-secondary programs, and minimum certificated staffing levels to qualify for enhanced state vocational staff allocations.

(2) Whether Changes to Other Rules or Statutes Would Achieve the Same Objective: No. The Office of Superintendent of Public Instruction (OSPI) currently has no rules on these topics. The rules implement new requirements in the state operating budget.

(3) How the Provisions of the Proposed Rule will be Coordinated with Other Rules of the Agency and Rules of Other State Agencies, Local Governments, and the Federal Government: Rules will be communicated to school districts through bulletins, report forms, and instructions published by OSPI.

(4) Whether the Agency has Chosen a Reasonable, Cost-Effective Manner to Achieve the Regulatory Objective: The agency has attempted to implement the legal requirements using existing data, forms, and reports to the extent possible.

(5) The Anticipated Environmental and Fiscal Consequences of Adopting and not Adopting the Proposed Rule, Recognizing the Difficulty of Quantifying Some Consequences: There are no known environmental consequences to adopting the rule. The rules will result in the reduction or recovery of state funding to districts not meeting state requirements.

(6) If a Rule Proposed in Order to Comply with Federal Law Contains Significant Differences from a Comparable Federal Rule or Standard, or if a Proposed Rule Provides Differences in Application to Public and Private Entities, Provide a Written Analysis Explaining the Nature of the Differences, Evaluating Their Consequences, and Providing a Rationale for Adopting the Rule as Drafted: The rule has no direct federal law consequence. The rule only applies to public entities.

Statutory Authority for Adoption: RCW 28A.150.290(2).

Statute Being Implemented: Section 502, chapter 149, Laws of 1998.

Summary: Rules define the method of calculating minimum required direct expenditures in vocational-secondary programs. Rules define the method of calculating actual school district vocational staff student ratios for state funding purposes.

Reasons Supporting Proposal: These rules are required to implement language in the state Operating Appropriations Act.

Name of Agency Personnel Responsible for Drafting: Rick Wilson, Office of Superintendent of Public Instruction, (360) 753-2298; Implementation: Allen Jones, Office of Superintendent of Public Instruction, (360) 753-2298; and Enforcement: Mike Bigelow, Office of Superintendent of Public Instruction, (360) 753-2298.

Name of Proponent: Office of Superintendent of Public Instruction, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: The vocational-secondary indirect cost limit will require districts to demonstrate required levels of direct expenditures for the state funded vocational program. The Office of Superintendent of Public Instruction (OSPI) will calculate required direct expenditure levels and will recover state vocational allocations in districts failing to meet the required expenditure level.

The vocational-secondary staffing requirements will require districts to demonstrate minimum certificated staffing levels in the vocational program in order to qualify for the enhanced state staffing ratio of one certificated staff unit per 19.5 vocational full-time equivalent (FTE) students. SPI will calculate ratios based on vocational staff reported to the agency on Form S-275 and actual annual average FTE vocational enrollment reported on Form P-223. Districts will have an opportunity to report supplemental staff information to reach the required staffing level.

Proposal does not change existing rules.

No small business economic impact statement has been prepared under chapter 19.85 RCW.

RCW 34.05.328 does not apply to this rule adoption.

Hearing Location: Wanamaker Conference Room, 2nd Floor, Old Capitol Building, P.O. Box 47200, Olympia, WA 98504-7200, on September 10, 1998, at 9:00 a.m.

Assistance for Persons with Disabilities: Contact Jim Rich by August 27, 1998, TDD (360) 664-3631, or (360) 753-6733.

Submit Written Comments to: Legal Services, Office of Superintendent of Public Instruction, P.O. Box 47200, 600 South Washington Street, Olympia, WA 98504-7200, fax (360) 753-4201, by September 9, 1998.

Date of Intended Adoption: September 11, 1998.

August 5, 1998

Terry Bergeson

Superintendent of

Public Instruction

VOCATIONAL-SECONDARY INDIRECT COST LIMIT

NEW SECTION

WAC 392-121-550  Vocational-secondary indirect cost limit--Applicable code provisions--Purpose--Effective date. (1) WAC 392-121-550 through 392-121-556 define the ten percent limit on indirect cost charges to school district vocational-secondary programs as required by the Biennial Operating Appropriations Act.

(2) The purpose of these sections is to assure that state allocations for vocational-secondary education are expended by school districts to support vocational programs. The minimum levels defined here govern state funding only and should not be construed as recommended expenditure levels. Vocational-secondary expenditures will exceed the minimum level when a district uses local levy revenue or other discretionary revenue to support the vocational-secondary program.

(3) These sections are effective for the 1997-98 school year and thereafter.

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NEW SECTION

WAC 392-121-552  Vocational-secondary indirect cost limit--Definitions. As used in WAC 392-121-550 through 392-121-556:

(1) "Program 31" means the vocational-basic-state program as defined in the Accounting Manual for Public School Districts in the State of Washington.

(2) "Prior school year program 31 net expenditure ratio" means the number calculated on Part III of Report F-196 Annual Year-End Financial Statements for the school year prior to the year of the indirect cost limit as follows:

(a) Determine the district's program 31 net program expenditures by adding distributed instructional support and district-wide support costs to program 31 direct expenditures and adjusting for abatements; and divide by

(b) The district's program 31 direct expenditures.

(3) "Basic allocation for vocational-secondary students" means the amount of money generated by a school district's vocational-secondary enrollment in the general apportionment formula using the state funding formula factors including the grade 4-12 staffing ratios without enhancement, and using the district's average certificated instructional staff mix factor for program 31 staff from the district's S-275 personnel report.

(4) "Vocational-secondary enhancement allocation" means the additional money above the basic allocation for vocational-secondary students generated by a school district's vocational-secondary enrollment as a result of the enhanced state vocational staffing ratio and enhanced nonemployee related cost allocation for vocational-secondary students. This enhancement shall be calculated using the district's average certificated instructional staff mix factor for program 31.

(5) "Vocational running start allocation" means the amount of money generated in the general apportionment formula by a school district's running start students enrolled in vocational courses in a community or technical college pursuant to chapter 392-169 WAC.

(6) "Total vocational-secondary allocations" means the sum of subsections (3), (4), and (5) of this section.

(7) "Composite vocational-secondary indirect rate" means the result of subsection (6) of this section divided by the district's minimum direct expenditures calculated pursuant to WAC 392-121-554.

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NEW SECTION

WAC 392-121-554  Vocational-secondary indirect cost limit--Calculation of minimum direct expenditures. (1) Each school district's minimum required program 31 direct expenditures equal the sum of the following amounts:

(a) The basic allocation for vocational-secondary students divided by the prior school year program 31 net expenditure ratio determined pursuant to WAC 392-121-152(2).

(b) The vocational-secondary enhancement allocation divided by 1.1.

(c) The vocational running start allocation multiplied by 0.93.

(d) Any carry over from the prior school year allowed under WAC 392-121-556 (3)(b).

(2) If the district's program 31 direct expenditures for the school year as reported on the district's Report F-196 Annual Year-End Financial Statements equal or exceed the amount calculated in subsection (1) of this section, then the school district is presumed to be within the ten percent limit on indirect charges to the vocational-secondary program.

(3) Before December 31 after the close of the school year, the superintendent of public instruction shall notify each school district which reports program 31 direct expenditures below the minimum calculated in this section of the superintendent's intent to recover money.

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NEW SECTION

WAC 392-121-556  Vocational-secondary indirect cost limit--School district requests for adjustment. (1) After receiving notice of the superintendent of public instruction's intent to recover money and before the ensuing January 15 a school district may request an adjustment to the calculation of the district's minimum direct expenditures pursuant to WAC 392-121-554. The request shall be in a form prescribed by the superintendent of public instruction and shall be signed by the school district superintendent.

(2) The request for adjustment shall be on one or more of the following grounds:

(a) The calculations or the data used in the calculations are in error; in which case the school district shall provide evidence of the error and the corrected data; or

(b) The district has carried over an amount not to exceed ten percent of the minimum direct expenditure amount (excluding any carry over from the prior year) for specified vocational-secondary expenditures in subsequent school years.

(3) The superintendent of public instruction shall consider requests for adjustment and shall:

(a) Revise the calculations if an error is found to have taken place; or

(b) Credit the carry over amount to the district's program 31 direct expenditures if the district's request for carry over is properly submitted.

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NEW SECTION

WAC 392-121-558  Vocational-secondary indirect cost limit--Recovery of state allocations. (1) At the time of the January apportionment calculations after the close of the school year, the superintendent of public instruction shall recalculate each school district's minimum direct expenditures pursuant to WAC 392-121-554 and 392-121-556. From each district with program 31 direct expenditures below the required minimum level the superintendent of public instruction shall recover from the school district's general apportionment allocation as a prior year adjustment an amount equal to the lesser of the district's vocational-secondary enhancement allocation or the amount determined as follows:

(a) The district's total vocational-secondary allocations defined in WAC 392-121-552(6); minus

(b) The district's direct expenditures in program 31 (including any adjustments made pursuant to WAC 392-121-556) times the composite indirect rate defined in WAC 392-121-552(7).

(2) Recovery amounts calculated pursuant to subsection (1) of this section shall be adjusted after the January apportionment calculation if revised enrollment, staff mix, or expenditure data submitted by the district and accepted by the superintendent of public instruction materially affects the district's recovery amount.

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VOCATIONAL-SECONDARY STAFFING FORMULA

NEW SECTION

WAC 392-121-560  Vocational-secondary staffing formula--Applicable code provisions--Effective date. WAC 392-121-560 through 392-121-568 determines school district state-funded certificated staffing ratios for vocational-secondary students in the general apportionment formula. These sections are effective for the 1998-99 school year and thereafter.

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NEW SECTION

WAC 392-121-562  Vocational-secondary staffing formula--Definitions. As used in WAC 392-121-560 through 392-121-568:

(1) "Certificated staff" means the same as defined in WAC 392-121-200.

(2) "Program 31 staff" means the staff assigned to program 31 Vocational-Basic-State as defined in the Accounting Manual for Public School Districts in the State of Washington and consistent with the S-275 reporting instructions provided by the superintendent of public instruction.

(3) "School district vocational-secondary full-time equivalent (FTE) certificated staff" means the full-time equivalent of certificated staff reported for the school year in program 31 Vocational-Basic-State on Report S-275 plus any supplemental vocational-secondary certificated FTE staff reported pursuant to WAC 392-121-564.

(4) "School district vocational-secondary full-time equivalent (FTE) students" means vocational-secondary students reported by the school district on Report P-223 for the school year pursuant to WAC 392-121-138 including any vocational FTE enrollment for work based learning.

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NEW SECTION

WAC 392-121-564  Vocational-secondary staffing formula--Reporting of supplemental staff. At any time after October 1 a school district may report supplemental vocational-secondary staff to the superintendent of public instruction on forms provided by the superintendent. The superintendent shall use data reported by the district to adjust the district's vocational-secondary certificated staff ratio as described in this section.

(1) If the district provides vocational-secondary instruction under contract and the contracted staff are not reported on the district's Report S-275 for the school year, the district may report the estimated number of vocational-secondary FTE students served under the contract. The superintendent of public instruction shall exclude these students in determining the district's vocational-secondary certificated staff ratio. If the actual vocational-secondary FTE students served under the contract differs by more than 10 percent and 2.0 FTE students, the district shall, after June 1 and before December 31, report to the superintendent the district's actual FTE students served under the contract to be used in the staff ratio calculation.

(2) If the district increases program 31 certificated staff after October 1 of the school year, the district may report such increased staff. The increase shall be determined for program 31 certificated staff in the same manner as supplemental FTE staff is determined in WAC 392-127-065. The superintendent of public instruction shall include the supplemental FTE in the calculation of the district's vocational-secondary certificated staffing ratio.

(3) If the district provides vocational-secondary instruction or any other service required for the operation of a state-approved vocational-secondary program under a supplemental contract with certificated staff and that service is not reflected in the certificated staff FTE reported by the district on Report S-275, the district may report the number of scheduled hours of such service for the school year. The superintendent of public instruction shall convert such hours of service to a certificated staff FTE equivalent by dividing the number of hours by 900 (e.g., 225 hours divided by 900 equals 0.25 FTE).

(4) If the district maintains a ratio of program 31 classified instructional assistants to vocational-secondary FTE students in excess of the state-wide average ratio for the 1996-97 school year (i.e., 2.88/1000 FTE students), the district may request that these additional classified instructional assistants be considered in determining the district's vocational-secondary certificated staff ratio. The superintendent of public instruction shall convert such additional classified FTE staff to certificated staff equivalent FTE by dividing by two (e.g., 2.10 classified FTE equals 1.05 certificated FTE).

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NEW SECTION

WAC 392-121-566  Vocational-secondary staffing formula--Calculation of school district vocational-secondary certificated staff ratios. Beginning in January of each school year, the superintendent of public instruction shall make a monthly calculation of each school district's vocational-secondary certificated staff ratio as follows:

(1) Determine the district's average year-to-date vocational-secondary FTE students for general apportionment purposes, excluding vocational running start FTE students and excluding FTE students reported pursuant to WAC 392-121-564(1);

(2) Determine the district's program 31 certificated FTE staff from the most recent S-275 data on file with the superintendent of public instruction and add any supplemental FTE staff reported by the school district pursuant to WAC 392-121-564 (2), (3), and (4); and

(3) Divide the result of subsection (1) of this section by the result of subsection (2).

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NEW SECTION

WAC 392-121-568  Vocational-secondary staffing formula--Determination of state-funded vocational-secondary certificated staff ratio. For purpose of general apportionment funding pursuant to this chapter, a district's state-funded vocational-secondary certificated staff ratio shall be determined pursuant to this section.

(1) The superintendent of public instruction shall recognize an allowance for certificated staff in programs 94 Instruction Support and 97 District-wide Support equal to 11.8 percent of state allocated certificated staff. This is based on the actual three-year average percentage of total school district staff in programs 94 and 97 (school years 1994-95 through 1996-97). The result of this adjustment is to require 88.2 percent of state-funded vocational-secondary certificated staff to be reported in program 31 Vocational-Basic-State. The resulting minimum program 31 certificated staffing ratio for a district to qualify for the full state vocational staff allocation is 22.1 (19.5 divided by 0.882 equals 22.1). This allowance shall be adjusted by the superintendent of public instruction in the event accounting and personnel reporting instructions significantly change the proportion of staff reported in programs 94 and 97 or in the event that the actual state-wide average ratio for the prior three school years changes by more than two tenths of one percent.

(2) The relationship between school district and state-funded ratios is summarized in the table below:

(3) A school district's initial state-funded vocational-secondary certificated staff ratio for general apportionment payments in the months of September through December of each school year shall be based on the school district's budgeted vocational-secondary certificated staff ratio submitted by the district on Report F-203.

(4) Beginning in January, and each month thereafter, the school district's state-funded ratio for general apportionment purposes shall be based on the most current year-to-date school district vocational-secondary certificated staffing ratio calculated by the superintendent of public instruction pursuant to WAC 392-121-566.

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