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Allotment Overdrafts, Salary Audit Exceptions, and Reimbursements


ItemDescription
Policy TitleAllotment Overdrafts, Salary Audit Exceptions, and Reimbursements
Policy CategoryAllotments (ALOT)
Policy IDALOT-002
Policy Date2003-10-02
Previous Policy Dates08/02/1990, 06/04/1992, 07/11/1996
Statutory ReferenceGS 115C-441

Formerly TCS-M-002

  1. Use of state funds is not permitted beyond authorized allotments as provided in North Carolina General Statutes (G.S.) 115C-441 and may result in certain penalties as specified therein.
  2. Such unauthorized use of state funds includes overdrafts of State Public School Fund allotments expended by the Local Education Agencies (LEAs) in allotment categories controlled on the basis of total dollars allotted and positions allotted, as well as failure to reimburse the State Public School Fund for the applicable local share of funds expended by the LEAs in Community Education programs.
  3. Overdrafts of dollars allotted are due and payable to the State Board of Education on or prior to the fifth working day of the month following the month in which the State Public School Fund monies were expended in violation of this policy.
  4. Salary audit exceptions and overdrafts of positions allotted are due 90 days after notification is sent to the LEA.
  5. When an LEA overdrafts a particular allotment the LEA shall not continue further use of state funds in the exhausted allotment category.  The LEA must immediately begin charging other appropriate available funds for any further expenditures.  Failure to do so results in violation of this policy and subjects the LEA to the penalties described herein.
  6. To control the use of state funds in excess of authorized dollar allotments the Deputy State Superintendent may impose a penalty calculated as one percent per month of the dollar allotment overdraft as applicable by the 20th of the second calendar month after the month in which the overdraft occurs.  This penalty shall be accumulated on a monthly basis as determined appropriate by the Deputy State Superintendent.
  7. To control the use of state funds in excess of authorized position allotments the Deputy State Superintendent may impose a penalty calculated as one percent per month of the months overdrawn multiplied by the initial allotted salary.  The penalty will be calculated monthly on all prior year position overdrafts, starting 90 days after notification.
  8. To expedite the collections of overpayments to certified employees resulting in salary audit exceptions, the Deputy State Superintendent may impose a penalty calculated as one percent per month of prior year salary audit exceptions on State overpayments, starting 90 days after notification.
  9. Any penalty imposed pursuant to this regulation shall be paid immediately upon notification of the unit.
  10. An LEA may appeal the imposition of a penalty by filing a written request within 30 days of the receipt of notification of such penalty.  The request must be made by the Superintendent of the LEA and must set forth the basis for appealing the penalty to the Deputy State Superintendent or State Board which ever is applicable pursuant to the policy.  The State Board has designated the Deputy State Superintendent to consider the appeal of penalties of $10,000 or less.
  11. Upon receipt of notice to appeal a penalty of $10,000 or less, the Deputy State Superintendent (or his representative) shall meet with representatives of the LEA to discuss the basis for the appeal. The Deputy State Superintendent shall communicate his decision by writing to the Superintendent of the LEA within 30 days of the date of notice to appeal the penalty.  If the Deputy State Superintendent's recommendation is to uphold the penalty, the recommendation shall also specify the time within which the LEA must pay the penalty.
  12. Upon receipt of notice to appeal a penalty in excess of $10,000, the Chairman of the State Board shall appoint a committee of the Board to consider the matter and to make a recommendation to the Board.  The Board's decision shall be made and communicated to the LEA within 60 days of the date of the request.
  13. The committee of the Board shall meet and consider the unit's appeal of the penalty.  The committee may request information from the Deputy State Superintendent and the unit, and may require representatives of the Deputy State Superintendent and the unit to appear before it.
  14. It is the responsibility of each finance officer to review the Allotment Balance Reconciliation report (351) and identify any discrepancies between state and LEA records on a monthly basis and make appropriate corrections as necessary to state and/or local records.  Failure to comply with these procedures does not relieve the finance officer or LEA of being subject to the penalties described herein as well as those contained in G.S. 115C-441.

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