New guidance and fund code for consolidation of eligible administrative funds

Word Version

October 14, 2015

TO THE ADMINISTRATOR ADDRESSED:

SUBJECT:    New guidance and fund code for consolidation of eligible administrative funds

The purpose of this letter is to inform local educational agencies (LEAs) that TEA has published new guidance about consolidating the administrative portion of eligible federal grant funds awarded under the No Child Left Behind Act of 2001 (NCLB). The new guidance, a series of five web pages, provides details about how LEAs can take advantage of the flexibility offered by consolidating their administrative funds and administering their NCLB programs as a whole.

Flexibility Offered by Consolidating Administrative Funds
Consolidating administrative funds provides flexibility to LEAs by allowing them to charge administrative costs to an administrative cost pool instead of assigning specific costs to specific programs. As long as the cost is an allowable administrative activity under any one of the programs that have been consolidated, it may be charged to the administrative cost pool.

In addition, the administrative cost pool may be treated as one cost objective for purposes of documenting time and effort for employees who work exclusively on administrative activities for the programs that contribute to the administrative cost pool.

Please note that LEAs must receive approval from TEA to consolidate their administrative funds each year. The approval process is described in the new guidance.

Fund Code 282
TEA has expanded the purpose of fund code 282, effective immediately. In addition to using fund code 282 to account for expenditures from funds consolidated in a Title I, Part A schoolwide program, LEAs can now also use fund code 282 to account for expenditures made from a consolidated pool of administrative funds.

TEA recommends that LEAs use a unique local option code, such as “CA,” to distinguish between schoolwide program expenditures and expenditures from an administrative cost pool. Specific accounting procedures are given in the new guidance.

Please note that the use of fund code 282 is recommended, but not required. Its use can make certain expenditures easy to identify in an LEA’s general ledger, which can help ensure that auditors and monitors apply the appropriate flexibility to those expenditures. Fund code 282 is for an LEA’s internal use only, and must not be used to report data in the Public Education Information Management System (PEIMS).

Fund code 282 is currently defined as a state-designated fund code in Module 1 of TEA’s Financial Accountability System Resource Guide (FASRG). The definition will be updated at the earliest opportunity to indicate that the fund code may only be used at the local level and must only be designated for a Title I, Part A schoolwide program or for the consolidation of administrative funds from NCLB programs.

Federal Flexibility Initiative
Promotion of the consolidation of administrative NCLB funds is part of TEA’s federal flexibility initiative. The initiative supports one of Commissioner Williams’ top priorities for Texas education, which is to exercise greater flexibility using federal funds to advance state, agency, and commissioner goals.

More information about the federal flexibility initiative is available online.

Sincerely,

Lizzette C. González Reynolds
Chief Deputy Commissioner