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School Districts: Are You Meeting Your Accountability Targets?

As the end of fiscal year 2017 is quickly approaching, so too comes the end of the first year requiring public school districts to meet certain requirements in relation to the increased teacher pay. Among other things, Senate Bill 131 set a goal to achieve a statewide average teacher salary of $48,500, in order to be able to recruit and retain high quality teachers within the state.

What are the Requirements to Meet Accountability Targets?

As a reminder, districts need to meet two separate requirements by their June 30, 2017 year-end, in order to prevent decreases of dollars in future years as a penalty.

  • Districts must spend 85% of its increase in local need monies (new education money) in fiscal year 2017 on instructional salaries and benefits for certified instructional staff. Such instructional staff include the following:
    1. Elementary Teachers (not Pre-K)
    2. Middle School Teachers
    3. High School Teachers
    4. Reading Specialists
    5. Title I Teachers
  • A district’s average teacher salaries and benefits must increase by 85% of the increase in local need (new money). For example, if a District’s local need monies increased by 10%, average salaries and benefits must be increased by 8.5%.

In other words, the Districts must not only spend 85% of the new monies on teacher compensation, but also must increase the average of those teacher compensation amounts by 85% as well.  Thus, the money cannot solely be spent on the addition of new teachers.

How is the Local Need Increase (New Money) Calculated?

The increase in local need monies are calculated as follows:

Increase in local need from fiscal year 2016 to fiscal year 2017

Less:  amount of pension levy revenue in fiscal year 2016

Total increase in local need monies in fiscal year 2017

What if My District Had Not Met These Requirements?

If these items have not been achieved during fiscal year 2017, it will result in a decrease in funding for fiscal year 2018 equaling 50% of the new education monies that were received during fiscal year 2017.

Additionally, if a District has future education monies reduced, they have the option to file an appeal with the School Finance Accountability Board (the Board).  This Board was created in order to hear appeals of districts in relation to general fund balances (separate topic of discussion stemming from the same Senate Bill) and teacher compensation accountability issues.  The Board is comprised of five members, appointed by the Governor.  A waiver recommended by this Board must also be approved by the Joint Committee on Appropriations.

What Needs to be Done in Fiscal Year 2018?

No new or additional accountability requirements need to be met within fiscal year 2018.  However, Districts should keep documentation to support changes to any teacher positions and salaries during fiscal year 2018, as they may impact future accountability requirements.

In fiscal years 2019-2021, the average teacher salary and benefits must exceed the average teacher compensation paid in fiscal year 2017.  If this requirement is not met, state aid monies will be reduced by $500 per teacher in the subsequent fiscal year.

Please feel free to contact Shelley Goodrich, Traci Hanson, or Jeff Yennie with questions concerning your public school district, as we are happy to help!

Shelley Goodrich

Shelley Goodrich

After receiving a Bachelor's degree in Business Administration (emphasis: Accounting) from Black Hills State University in 2004 and a Master's degree in Accounting from the University of Wyoming in 2005, Ms. Goodrich joined our firm in July of 2005. Her areas of specialization include governmental and non-profit audit, and she maintains professional and civic involvement with AICPA and SDCPA.
Shelley Goodrich
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