N.J. Admin. Code § 6A:23A-17.1

Current through Register Vol. 57, No. 1, January 6, 2025

Section 6A:23A-17.1 - Method of determining tuition rates for regular public schools

(a) For the purposes of this subchapter, a district board of education does not include an educational services commission or jointure commission.

(b) The term "actual cost per pupil" for determining the tuition rate(s) for a given year pursuant to N.J.S.A. 18A:38-19 and 18A:46-21 means the local cost per student in average daily enrollment, based upon audited expenditures for that year for the purpose for which the tuition rate is being determined and consistent with the grade/program categories at N.J.S.A. 18A:7F-50 and 18A:7F-55, that is, regular education classes: preschool and kindergarten, grades one through five, grades six through eight, and grades nine through 12; and special class programs as set forth at N.J.A.C. 6A:14-4.7. School districts that receive preschool education aid shall determine an actual cost per student only for kindergarten students. Pursuant to N.J.A.C. 6A:13A-2.1, school districts that receive preschool education aid and charge tuition to another school district and/or parent or guardian, as permitted pursuant to N.J.A.C. 6A:13A, may charge any amount, not to exceed the per pupil amount established pursuant to N.J.S.A. 18A:7F-54.

1. The receiving district board of education shall include in its calculation all expenditures for each purpose except Federal and State special revenue fund expenditures and expenditures specifically excluded pursuant to (e)5 below.

(c) The receiving district board of education shall obtain certification of its "actual cost per pupil" for each tuition category for a given year from the Commissioner based upon either:

1. A report prepared and submitted annually by the receiving district board of education indicating the actual amounts of expenditures and adjustments, whenever practicable, or amounts equitably allocated and supported by documentation for each applicable item in the grade/program category for which the tuition rate is required, according to the prescribed bookkeeping and accounting system; or

2. A report prepared annually by the Commissioner for each receiving district board of education. This report establishes the "actual cost per pupil" for each tuition category using the following:

i. Expenditures reflected in the receiving district board of education's annual independent audit;

ii. Supplemental data for average daily enrollment and items of expenditure at (e)2 below submitted by category by the receiving district board of education on a form prescribed by the Commissioner; and

iii. Criteria at (e) below.

(d) A receiving district board of education that submits tuition reports to the Commissioner pursuant to (c)1 above and seeks to change the certification method to the method at (c)2 above shall submit a written request to the Commissioner for review and approval and shall indicate the reason(s) for the change. A district board of education that determines to change the certification method shall notify the executive county superintendent and the Office of School Finance prior to March 1 preceding the September of the school year for which the tentative tuition rate is being determined.

(e) A receiving district board of education approved to use the method at (c)1 above shall determine the share of each item of expenditure for each grade/program category on the report at (c)1 above on a pro rata or actual basis as follows:

1. The actual expenditures for each category as reflected in the receiving district board of education's annual independent audit for the following items:

i. Teachers' salaries and equipment for regular education classes; and

ii. Direct instructional expenditures for salaries, equipment and other expenses for special education classes.

2. Expenditures submitted by category on the supplemental data report and determined on either an actual basis or an equitable basis of allocation, such as square footage or average daily enrollment selected by the receiving district board of education and supported by documentation for the following items:

i. Rental of land and buildings;

ii. Interest on lease-purchase agreements;

iii. School-sponsored co-curricular activities, athletics, and other instructional programs of the general fund;

iv. Career and technical education programs;

v. Facilities acquisition and construction services included in the budget approved by the executive county superintendent and certified for taxes;

vi. Building use charges as defined at (e)6 and 7 below;

vii. Other support services, special education;

viii. Related services; and

ix. Benefits for special programs.

3. Unallocated expenditures for general education class categories as reflected in the receiving district board of education's annual independent audit and allocated in proportion to the average daily enrollment in the grade categories for general education classes for the following items:

i. Other salaries for instruction such as teaching assistants and aides, as well as other staff providing, or assisting directly in, the instructional program;

ii. Textbooks;

iii. Equipment;

iv. Teaching supplies;

v. Purchased professional educational services;

vi. Purchased technical educational services;

vii. Other support services, general education;

viii. Other direct expenses of general education classes;

ix. Direct instructional expenditures for salaries, other expenses, and equipment for basic skills remedial programs; and

x. Employee benefits.

4. Expenditures, including related employee benefits and equipment, as reflected in the receiving district board of education's annual independent audit and allocated in proportion to the average daily enrollment in each category for all categories at (b) above for the following items:

i. General administration, central services, administrative information technology, and business and other support services;

ii. Improvement of instructional services;

iii. Staff training services;

iv. Educational media services, school library;

v. School administration;

vi. Attendance, social work, and health;

vii. Contracted transportation or transportation provided by district board of education owned vehicles for curricular activities such as field trips, athletic trips, and other trips that are part of the instructional program;

viii. Operation and maintenance of plant expenditures;

ix. Fixed charges, including unallocated employee benefit costs for retirement and Social Security contributions except Teacher's Pension and Annuity Fund (TPAF) contributions, insurance and judgments, including unemployment compensation (UCC), interest on current loans, and other fixed charges except rental of land and buildings and interest on lease-purchase agreements determined pursuant to (e)2 above, and principal on lease-purchase agreements and tuition that are excluded pursuant to (e)5 below;

x. Food service expenditures of the general fund;

xi. Direct instructional expenditures for salaries, equipment, and other expenses for bilingual education programs and for home instruction;

xii. Programs for before/after school, summer school, alternative education, and other supplemental at-risk programs;

xiii. Energy, including natural gas, gasoline, and oil; and

xiv. Security, care and upkeep of grounds, custodial services, and required maintenance of school facilities.

5. Expenditures that are excluded from the actual cost per pupil for tuition purposes for the following items:

i. Transportation to and from school that is paid by the resident district board of education;

ii. Employee retirement and Social Security contributions for TPAF members that are fully funded by the State;

iii. Principal on lease-purchase agreements;

iv. Tuition;

v. Community services;

vi. Resource rooms, which are determined pursuant to (e)9 below and permitted as a separate charge over and above tuition for general education classes;

vii. Accredited adult education programs and nonaccredited adult and evening programs; and

viii. Extraordinary services provided to students with disabilities for which a district board of education may bill directly.

6. Building use charge determined as follows:

i. Divide the amount of debt service State support received by the debt service paid for the school year to determine the ratio of State support;

ii. Multiply the debt service interest charges paid on debt for the buildings in which the program is located by the ratio of State support obtained at (e)6i above;

iii. Subtract the amount obtained at (e)6ii above from the debt service interest charge paid on debt for the buildings in which the program is located; and

iv. Distribute the amount obtained at (e)6iii above in accordance with (e)2 above.

7. Special building use charge determined as follows:

i. Whenever a receiving district board of education receives more than 50 percent of the average daily enrollment in a program for which a tuition rate is being determined, the receiving district board of education may include, in accordance with (e)2 above, the amount expended for principal and interest on major repairs and major renewals of furniture, equipment, and apparatus for the building in which the program is located, provided:

(1) Such major repairs or major renewals were funded by the issuance of bonds, pursuant to N.J.S.A. 18A:21-1;

(2) The receiving district board of education consulted with each sending district board of education having more than 10 percent of the average daily enrollment in the program for which the tuition rate is being determined prior to taking any action in accordance with N.J.S.A. 18A:24-10 to authorize the issuance of bonds; and

(3) The majority of district boards of education with more than 10 percent of the enrollment in the program passed a resolution in support of the receiving district board of education's determination to issue such bonds or the Commissioner, after a conference, approved the proposal for the issuance of such bonds.

ii. A receiving district board of education for which this section is applicable may include, in accordance with (e)2 above, the entire rental on a site or school building acquired by a lease-purchase agreement, pursuant to N.J.S.A. 18A:20-4.2, provided:

(1) The receiving district board of education consulted with each sending district board of education having more than 10 percent of the average daily enrollment in the program for which the tuition rate is being determined prior to entering into the lease-purchase agreement; and

(2) Each sending district board of education with more than 10 percent of the enrollment in the program passed a resolution in support of the receiving district board of education's determination to enter into a lease-purchase agreement or the Commissioner, after a conference, approved the proposal to enter into a lease-purchase agreement.

iii. A receiving district board of education for which this section is applicable may include, in accordance with (e)2 above, a facilities acquisition and construction service charge, which is determined by the straight line amortization over three years of that part of the total expenditure for facilities acquisition and construction services that is over and above the amount stated in the budget certified for taxes and used at (e)2v above.

8. In addition to the tuition charged for each grade category, a receiving district board of education may charge, for students receiving services in a resource room, an additional amount up to the actual direct instructional cost per pupil for such services calculated on an hourly basis (an example of the calculation is contained in Policy Bulletin: 100-1 issued by and available from the Division of Finance and Business Services, Department of Education, PO Box 500, Trenton, New Jersey 08625-0500).

(f) The receiving district board of education and the sending district board of education shall establish, by written contractual agreement, a tentative tuition charge for budgetary purposes. The tentative tuition charge shall equal an amount not in excess of the receiving district board of education's "estimated cost per pupil" for the ensuing school year for the purpose or purposes for which tuition is being charged, multiplied by the "estimated average daily enrollment of students" expected to be received during the ensuing school year. The written contractual agreement shall be on a Commissioner-prepared form.

1. "Estimated cost per pupil" shall be determined by the receiving district board of education using the appropriate supporting schedule in its annual budget for the ensuing year. In lieu of completing the form at (c)1 above, a receiving district board of education that has elected to use (c)1 above to certify actual cost per pupil may set an estimated cost per pupil up to an amount that shall be determined by multiplying the most recent year's certified cost per pupil by one plus the Consumer Price Index (CPI) as defined at N.J.S.A. 18A:7F-45 for the budget year or 2.5 percent, whichever is greater. If this option is selected and more than one fiscal year has elapsed since the most recent cost per student certification, the receiving district board of education shall further increase the estimated cost per pupil by multiplying the above by the sum of one plus the CPI for each additional year.

i. For any given fiscal year, the method used to certify the final certified tuition rate shall be consistent with the method used to establish the tentative tuition rate at (f) above.

2. "Estimated average daily enrollment" for the purpose of calculating a tentative tuition charge shall be determined as follows:

i. A receiving district board of education shall project the number of students in each tuition category expected to be received consistent with the growth in average daily enrollment (ADE) taken from the three most recent school register summary reports prior to the year for which the budget is being prepared.

ii. Estimated average daily enrollment (EADE) equals Y1x(1+G)<2> where the growth rate G = 0.5x(Y1-Y3)/Y3, where G shall not exceed +/-10 percent, Y1 is the ADE two years prior to the year for which the tuition is being estimated, and Y3 is the ADE four years prior to the year for which the tuition is being estimated. For the purposes of the tentative tuition contract, a receiving district board of education shall apply the same growth rate calculation (as noted above) to project the number of students to be received from each sending district board of education.

3. The sending district board of education and the receiving district board of education shall enter into a written contractual agreement for tuition for the ensuing school year, except for a contractual agreement for a student enrolled in a special education class, no later than seven days prior to the date on which the proposed budget for the ensuing school year is required to be submitted to the executive county superintendent. The contractual agreement shall require the sending district board of education to pay 10 percent of the tentative tuition charge no later than the first of each month from September through June of the contract year. The contractual agreement, except for a contractual agreement for a student enrolled in a special education class, shall require all adjustments resulting from a difference in cost or in the number of students sent to be made only during the second school year following the contract year. All contractual agreements shall contain a payment schedule for all adjustments that may be necessary.

4. The sending district board of education shall notify, in writing, the receiving district board of education of the estimated average daily enrollment of students in each tuition category expected to be sent during the ensuing school year no later than the preceding December 15. The receiving district board of education shall notify, in writing, the sending district board of education of the estimated cost per pupil in each tuition category for the ensuing school year and the tentative tuition charge no later than the preceding February 4. The receiving district board of education shall submit to the sending district board of education, on a form prepared by the Commissioner, a copy of its calculations to determine the estimated cost per pupil in each tuition category for the ensuing school year no later than the preceding February 4.

5. The executive county superintendent in the county in which the receiving district board of education is located shall review any unique circumstances or variations in methodology and mediate all disputes that arise from the determination of tentative tuition charges, including challenges to the estimated average daily enrollment counts generated using the formula at (f)2 above. The review shall include examination of the following documents:

i. Annual budgets, including supporting documents;

ii. Application for State School Aid (ASSA) reports;

iii. School register summary reports;

iv. Tuition contracts; and

v. Any other information deemed necessary.

6. If the Commissioner later determines that the tentative tuition charge established by written contractual agreement, except for a contractual agreement for a student enrolled in a special education class, was greater than the actual cost per student during the school year multiplied by the actual ADE received, the receiving district board of education shall return to the sending district board of education in the second school year following the contract year the amount by which the tentative charge exceeded the actual charge as determined above, or, at the option of the receiving district board of education, shall credit the sending district board of education with the excess amount. The receiving district board of education shall make such adjustment for a contractual agreement for a student enrolled in a special education class no later than the end of the second school year following the contract year.

7. If the Commissioner later determines that the tentative charge established by written contractual agreement, except for a contractual agreement for a student enrolled in a special education class, was less than the actual cost per pupil during the school year multiplied by the actual average daily enrollment received, the receiving district board of education may charge the sending district board of education all or part of the amount owed by the sending district board of education, to be paid during the second school year following the school year for which the tentative charge was paid. Such adjustment for a contractual agreement for a student enrolled in a special education class shall be made no later than the end of the second school year following the contract year. The executive county superintendent of the county in which the sending district board of education is located may approve the payment of the additional charge over another period, if the sending district board of education can demonstrate that payment during the second school year following the school year for which the tentative charge was paid would cause a hardship.

8. If, at the end of the contract year, a sending or receiving district board of education anticipates a tuition adjustment will be required in the second year following the contract year, the district board of education may restrict general fund balance of up to 10 percent of the estimated tuition cost defined as estimated cost per pupil multiplied by the estimated average daily enrollment in the contract year in a reserve for tuition adjustments. The district board of education resolution shall identify an exact dollar amount to be reserved and shall be adopted on or prior to June 30. In such case, the district board of education shall:

i. Make full appropriation of the legal reserve for the tuition adjustment in the second year following the contract year; and

ii. Transfer to the general fund at least annually, by district board of education resolution, any interest earned on the investments in a tuition reserve account. The district board of education may make the transfer on a more frequent basis.

(g) The receiving district board of education shall use Commissioner-prepared forms for certification of the "actual cost per pupil" for each tuition category according to the rules in this section, for contracts, and for establishing the estimated cost per pupil for each tuition category for the ensuing school year.

(h) In any year in which the receiving district board of education can prove, to the Commissioner's satisfaction, that the charge for the use of the school facilities pursuant to (e)6 above is not adequate, the Commissioner may approve an additional charge in accordance with (e)7 above.

N.J. Admin. Code § 6A:23A-17.1

Amended by 49 N.J.R. 1079(a), effective 5/1/2017

Amended by 56 N.J.R. 2166(a), effective 11/4/2024