Monthly Archives: January 2019

What do State Education Laws and Regulations (603 CMR 10.00) say about Indirect Cost?


(1) The following expenditures from local revenues by a municipal department other than the school department which result in services to or on behalf of the school district shall be reported to the Department on or before September 30 of each year in accordance with the expenditure categories and cost allocation methods set forth in guidelines published by the Department. The cost of insurance and retirement benefits for non-school district employees shall not be included or reported.

(a)Administrative Services. The cost of municipal accounting, auditing, central data processing, central purchasing, employee benefits administration, financial services provided to the school department.

(b) Educational Media and Library Services, Exclusive of Capital Outlay. The activities of librarians and catalogers, and the costs associated with cataloguing books, pamphlets, periodicals and other materials for use by school district students where there is an agreement between the school district and the library board for specific services to be provided to students.

(c) Health Services. The salaries of health personnel who provide direct services or instruction to public school students or school department employees pursuant to an agreement between the school district and the municipality for the provision of these services and related costs for supplies, materials and other direct expenditures in support of services covered by the agreement; the salaries of public safety officers, on an hourly basis, who provide direct classroom instruction on alcohol and substance abuse and violence prevention to public school students pursuant to an agreement between the school district and the municipality for the provision of these services; the salaries of health personnel who provide direct services which state law requires be provided to non-public students or non-public school employees and who make regularly scheduled visits to non-public schools for this purpose and related costs for supplies, materials and other direct expenditures in support of these and other services provided in accordance with M.G.L. c. 71, § 57.

(d) School Security Services. Salaries and other expenses of security staff or school police who are scheduled solely on school grounds where there is an agreement between the school committee and the municipality for specific services to be provided.

(e) Student Transportation Services. All costs incurred as a result of programs transporting public school students once daily to and from school, and the costs incurred in transporting non-public school students once daily to and from school to the extent required by M.G.L. c. 76 § 1. (GN NOTE: STATE HAS NOT FUNDED THIS FOR MANY YEARS)

(f) Operation and Maintenance of School Facilities. The direct costs of salaries, supplies, materials and contractual expenses for the ordinary and extraordinary maintenance of school buildings, grounds and equipment. School maintenance expenditures shall be reported for services performed within a school building or on school grounds, and shall include other property used by the public schools only where there is an agreement between the municipality and the school district concerning the use and maintenance of that property. Overhead costs for non-school buildings shall not be included or reported.

(g) Employee Benefits. The actual costs of pensions paid to school department retirees or the actual costs of assessments paid to state, county or municipal retirement systems on account of school department employees or retirees, including any special assessments for early retirement incentive programs for school department employees; the direct insurance premiums for active and retired school district employees, after deducting all employee contributions; contributions to self-insurance trust funds from the municipality’s general fund; and the indirect costs of administering employee benefit programs.

(h) Non-Employee Insurance. The direct insurance premiums for school buildings, grounds, equipment and liability coverage, contributions to non-employee self-insurance trust funds from the municipality’s general fund, and the indirect costs of administering school facilities and liability insurance programs.

(i) Rental/Lease of School Buildings and Non-Instructional Equipment. Expenditures for the lease or rental, at the request of the school district, of buildings and non-instructional equipment for the public schools, not including any capital lease which provides for the municipality’s acquisition of the leased building or equipment at the conclusion of the lease term.

(j) Interest on Borrowing for School District Purposes. Actual interest paid in borrowing for Revenue Anticipation Notes to support current year school district operations, interest on bonds and loans used to finance the purchase or construction of schools, textbooks, instructional equipment and technology, non-instructional equipment, and school building maintenance.

(k) Other Recurrent School-Related Expenditures. Other items of a recurrent nature for school purposes such as the salaries of crossing guards and the costs of public safety inspections.

(l) Acquisition, Improvement and Replacement of School Sites, Buildings, Equipment and Student Transportation Vehicles. Such costs shall be limited to funds expended for school capital construction and major reconstruction projects, maintenance projects which exceed the cost limit for extraordinary maintenance, the actual cost of student transportation vehicles, amortized in accordance with guidelines published by the Department, and other specific appropriated items, including school building planning costs and lease/purchases of buildings or non-instructional equipment, that are intended to acquire a new asset for the school district.

(m) Programs with Other Public and Private Schools and Educational Collaboratives. The tuition or assessment paid for instructional programs provided by other school districts or private schools to students resident in the municipality who attend those schools by agreement of the district school committee or as a result of placement by a state agency.

(2) Where the Department’s guidelines permit districts to select among two or more permissible methods for allocating the municipal expenditures set forth in 603 CMR 10.04 (1) (a) through (m), one method shall be chosen by the school district and used consistently from year to year. The allocation method used to report expenditures by municipal departments other than the school department may be changed only with the approval of the Commissioner.

(3) When school and municipal officials cannot agree on the correct reporting, allocation and documentation of expenditures by municipal agencies for educational purposes, they shall so notify the Department. The Commissioner shall, upon receipt of such notice, appoint a designee to conduct an informal hearing to encourage the parties to reach an agreement and make a final determination on the issues in dispute if no agreement is reached within a reasonable time period. The Commissioner shall consult with and seek assistance from the Commissioner of Revenue or his designee in attempting to resolve such disputes.