Question: One of our districts has a restricted ending fund balance of $70,000. This is due to special education revenues, after the special ed. ADA transfer, exceeding special ed. expenses. The district does not believe their special ed. program generates a positive cash flow. As you know, the expenditures in special ed. usually just include direct charges (teachers/aides salaries and benefits, instructional supplies, and equipment). Is it appropriate to charge the special ed. programs (2610, 2620, and 2630) for pupil services costs (psychologists, nurses, testing, IEP meetings, etc.) incurred in providing services to special education? If so, should object code #5710 be used? What method should be used in computing and allocating these costs among the programs?

Response: The accounting manual discusses what type of services do constitute special education costs. Assessment costs, for services provided to kids, begin from the first date of the written referral for assessment. This includes testing, consulting with parents, gathering records and reviewing files. Services provided can be by psychologists, nurses, audiologists, social workers, vocational education staff, occupational therapists, physical therapists or physicians. Assessment costs represent the activities of specialized personnel in the evaluation of the child, as well as preparation for, and participation in, the IEP team meeting.


Assessment costs are recorded as documented support costs. Refer to the accounting manual, procedure number  702, for further information on developing the allocation ratio.