Cost Analysis Report Instructions

Pursuant to Chapter 26 Rules, Section 3 Paragraph A: "All costs shall be calculated from actual base year operating costs..."

Base Year is defined as "the 2nd year prior to the allocation year".

The base year is used because it is the most recent available audited financial data in the Maine Education Financial System. If the school will be closed at the end of the 2018-19 school year, the financial data from the 2016-17 school year should be used for the cost analysis.

Step 1: Download the Budget to Actual Report for the Base Year from the NEO Maine Education Financial System (MEFS)

  1. Log in to NEO → Choose the "Financial" module → Click "Financials" → Login to the Financial System
  2. Under Reports choose "Budget to Actual Report"
  3. Fiscal Year = Base Year (i.e. 2017 if the school will be closed at the end of the 2018-19 School Year)
  4. SAU = School District of School to be closed
  5. Report Style = Detailed
  6. Report Format = Excel
  7. Submission Type = Expenditure
  8. Click on "Show Report" - this will create an excel spreadsheet to use for the analysis. Open the file in Excel and then File-Save As the spreadsheet and go to the next step.

Step 2: After saving the downloaded Budget to Actual Report in Excel - Sort by Fund, Program, Function, Cost Center and then Object in order to get the accounts into the Budget Category Cost Centers needed for the analysis.

a. Regular Instructionexcel_sort

b. Special Education

c. CTE/Vocational

d. Other Instruction

e. Student and Staff Support

f. System Administration

g. Facilities Management

h. Debt Service

i. All Other Expenditures (i.e. nutrition, food service)

Step 3: Remove all but Fund 1000 expenditures - unless food service is in a different category, such as Fund 2900 or 6000. The new total for the Actual Expended amounts should be the total for Column A in the "Cost Analysis Expenditure Detail Report" spreadsheet.

Step 4: Copy the "Actual Expended" amounts (column G) from the downloaded and sorted spreadsheet into Column A of the "Cost Analysis Expenditure Detail Template Spreadsheet".

Column B and Column C should all be zeros and Column D should be a formula to calculate the savings of Col (B) - Col (C). The last column labeled "Notes" should be used to provide explanations of calculations and positions which will be either eliminated or maintained.

Column D (savings) should never be a negative (-) amount, unless Transportation is going to cost more as a result of the school closure. A negative in that column indicates additional cost instead of savings.

Calculations showing the Subtotal for each Budget Category should be entered into the spreadsheet. You may have to do some rearranging of the line items so the subtotals add up into the appropriate categories. You will also need to correct the sum and subtotal calculations to properly account for each line of your budget.

Step 5: Calculate the Average Teacher Salary for your district using the base year salaries - Rules require the use of the average teacher salary in the district when calculating the savings of a terminated position; a copy of this calculation should be printed and attached as supporting data in the Appendix.

Step 6: Determine method for calculating Average Elementary Teacher Benefits to be used when calculating the benefit savings of a terminated position; include back up documentation on how the average was determined.

Step 7: Column A should be the District's Actual Total Expenditures for the Base Year and should match the last budget printout for the base year and reconcile with the audited financials exactly.

Note: Columns B, C, and D should reflect expenditures for the school (cost center) that is being closed only.

Step 8: Column B should be the Actual Expenditures for the School (cost center) that is closing:

Note: For Cost Centers 900 and 950, you will need to determine what portion, if any, are attributable to the school that is closing and provide backup documentation on how that was determined.

Step 9: Column C is the expenditures tha will continue even "IF" the school was closed for that year. This should not take into consideration changes that are current.

Note: You must use the Average Teacher Salary and Average Teacher Benefits for Column C and D. Although you may have an idea of what specific teacher may have left or will be leaving the district, the rules state you must assume it is a position not a specifc teacher being eliminated, therefore the average salary and benefits for the district must be used for these calculations.

Step 10: Column D should be a formula that calculates what the savings would be if the school were closed in the base year. The calcuation subtracts the continuing costs in Column C from the actual costs in Column B to determine the amount to be saved.

Step 11: Once the totals and subtotals have been verified on the "Cost Analysis Expenditure Detail Template Spreadsheet", you will need to transfer the "Subtotals" of each Budget Category from the spreadsheet to the Cost Analysis Summary spreadsheet including notes regarding positions being maintained or eliminated.

Notes regarding Cost Analsyis:
  1. Cost Analysis data must be audited data as submitted to the Department of Education - data must be downloaded from the Maine Education Financial System (MEFS) in NEO, not from the Local Accounting System.
  2. Must include printed copies of the Cost Analysis Expenditure Detail Spreadsheet and the Cost Analysis Summary Spreadsheet with the submission.
  3. Calculation for the reduction of teaching staff - the amount of the reduction in salaries and benefits shall be computed as the number of reduced teaching positions times the average salary and benefit cost for elementary teachers in the SAU.
  4. Calculation for the reduction of staff (other than teachers) - the rules are silent on this, therefore the cost may be actual or based on averages - please provide detail on which is used.
  5. For any reduction in staff, please note the FTE and position type - examples; 1 FTE Teacher, .5 FTE Ed Tech, .8 FTE Nurse, etc.
  6. Class size statement - you must indicate that the class size would not exceed the maximum class size statutes, Department of Education Rules, and/or SAU policy in effect during the base year.