Update on Mandates Block Grant

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August 1, 2012 As we reported in our 2012-13 Final Budget Brief, the approved budget contains $166.6 million for a new K-12 Mandates Block Grant that will provide $14 per unit of average daily attendance (ADA) to charter schools that choose to participate-- that is $7,000 for a school of 500 ADA. Since charter schools currently cannot access the mandate reimbursement process, this is a new source of funding for charter schools for which CCSA had advocated. However, as with most school funding, there are a few strings attached to receiving these new funds.

Specifically, the block grant is enacted through new Government Code Section 17581.6 that:

  • Requires any charter school seeking a grant to submit a letter of intent to the Superintendent of Public Instruction by September 30 of each year the grant is requested. We understand that in the upcoming weeks the CDE will be providing a form to all charter schools and districts to notify CDE if they choose to accept the grant. We will also notify schools through a Capitol Update when this form becomes available.
  • Prohibits any entity that receives a grant from submitting a claim for reimbursement through the mandate process for any of the mandates listed in the block grant (click here for list) in any year in which the grant is received. Because charter schools currently cannot receive funding through the mandate reimbursement process, the decision to apply for these funds may be clearer for a charter school than for a school district.
  • Subjects block grant funding to audits required by section 41020. The audit guide provisions for this new code section will not be determined until well after the notification deadline. CCSA will monitor the audit guide development process to advocate for simple and minimal audit procedures. At this point, we believe that a cumbersome audit review is not intended. However, charter schools should monitor and document expenditures related to any mandated activities included in the block grant in anticipation of the impending audit. Schools may also want to discuss the new requirement with their auditor.
  • States that block grant funding is to support a specified list of mandated programs. Schools should be prepared to document how grant funds support activities included in the grant. While charter schools do not participate in every activity on the list, a large number of the activities listed are routinely conducted by charter schools.
  • The Budget Act specifies that grant amounts are to be based on average daily attendance calculate as of the second principal apportionment for the previous fiscal year. As such, it appears that charter schools will not be eligible to receive these funds in their first year of operation. Further, the budget specifies that if available funding exceeds applications, the SPI shall proportionally reduce rates.

Because charter schools currently cannot access any mandate reimbursement, and we generally expect audit requirements to be minimal, we believe that charter schools should request these funds. However, each charter school should evaluate the relative value of accessing this new source of funding in the context of its own operations. CCSA will closely monitor the implementation of this new process and keep you informed as further details emerge.