SBOE Reset Indirect Cost Allowance for CTE Programs

The 81st Texas Legislature directed the State Board of Education (SBOE) per HB 3646 to review and adjust indirect cost allotments for the following programs - special education, compensatory education, bilingual education, and career and technical education (CTE). Currently, districts are required to spend at least 90% of the career and technical education allotment on direct costs for the program and 10% on indirect costs. In order to receive the same amount of earmarked funds for CTE programs, the indirect cost allowance must be set no higher than 40%.

The legislature increased the per student basic allotment, but did not intend for the increase to also extend to the weight for CTE. Hence the directive for the SBOE to adjust the spending percentage.

The additional $50 per student for career and technical education students coded as two or three in PEIMS as provided by HB 3646 will be in addition to the statutory special allotment for career and technical education and will flow through formula funding.

House Bill 3646: “Sec. 42.1541. INDIRECT COST ALLOTMENTS. (a) The State Board of Education shall by rule increase the indirect cost allotments established under Sections 42.151 (h) , 42.152 (c) . 42.153(b), and 42.154(a-1} and (c) and in effect for the 2008-2009 school year as necessary to reflect the increased percentage of total maintenance and operations funding represented by the basic allotment under Section 42.101 as a result of amendment of that section by H.B. No. 3646. Acts of the 81st Legislature, Regular Session, 2009. (b) The board shall take the action required by Subsection (a) not later than the date that permits the increased indirect cost allotments to apply beginning with the 2009-2010 school year. (c) This section expires September 1, 2010.”

Texas Administrative Code

Title 19, Part 2, Chapter 105, Subchapter B, Rule § 105.11: Maximum Allowable Indirect Cost:

No more than 45% of each school district's Foundation School Program (FSP) special allotments under the Texas Education Code, Chapter 42, Subchapter C, may be expended for indirect costs related to the following programs: compensatory education, gifted and talented education, bilingual education and special language programs, and special education. No more than 40% of each school district's FSP special allotments under the Texas Education Code, Chapter 42, Subchapter C, may be expended for indirect costs related to career and technical education programs. Indirect costs may be attributed to the following expenditure function codes: 34--Student Transportation; 41--General Administration; 81--Facilities Acquisition and Construction; and the Function 90 series of the general fund, as defined in the Texas Education Agency publication, Financial Accountability System Resource Guide.

Source Note: The provisions of this §105.11 adopted to be effective September 1, 1996, 21 TexReg 5710; amended to be effective December 5, 2004, 29 TexReg 11347; amended to be effective December 31, 2009, 34 TexReg 9439