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<div><font face="Arial, sans-serif" size="2">Date: July 27, 2009</font></div>
<div><font face="Arial, sans-serif" size="2"> </font></div>
<div><font face="Arial, sans-serif" size="2">To: All Superintendents and Business Managers</font></div>
<div><font face="Arial, sans-serif" size="2"> </font></div>
<div><font face="Arial, sans-serif" size="2">Re: 2009-2010 Indirect Rate Carry Forward Update</font></div>
<div><font face="Arial, sans-serif" size="2"> </font></div>
<div><font face="Arial, sans-serif" size="2"> </font></div>
<div><font face="Arial, sans-serif" size="2">As a result of a United States Education Department (USED) review, the Oregon Department of Education (ODE) updated the Indirect Cost Rate System (ICRS) to include the carry forward calculation. </font></div>
<div><font face="Arial, sans-serif" size="2"> </font></div>
<div><font face="Arial, sans-serif" size="2">During our processing of indirect rates for the 2009-2010 school year, it was brought to our attention that the calculation for the Indirect Cost Rate Carry Forward amount needs to be adjusted and we will need to
enhance our system. Through conversations with the USED, it became clear that the carry forward adjustment must be completed as the last step, instead of the first step, in the unallowable adjustment process. </font></div>
<div><font face="Arial, sans-serif" size="2"> </font></div>
<div><font face="Arial, sans-serif" size="2">ODE received approval from the USED this morning to <u>remove</u> all carry forward adjustments for the current 2009-2010 school year to allow us time to make corrections; therefore, the ODE will remove the carry
forward on all school district and education service district rates. We expect to complete this by close of business on Wednesday, July 29, 2009.</font></div>
<div><font face="Arial, sans-serif" size="2"> </font></div>
<div><font face="Arial, sans-serif" size="2">Below is a matrix showing the next steps and responsibilities of ODE, by status level, to assure the correction to carry forward is completed over the next few days.</font></div>
<div><font face="Arial, sans-serif" size="2"> </font></div>
<table border="1" width="772" style="border:1 solid; border-collapse:collapse; margin-left: -2pt; ">
<col width="116">
<col width="356">
<col width="300">
<tr height="46">
<td><font face="Arial, sans-serif" size="2"><b>Current Status</b></font></td>
<td><font face="Arial, sans-serif" size="2"><b>ODE Steps</b></font></td>
<td><font face="Arial, sans-serif" size="2"><b>Your Steps</b></font></td>
</tr>
<tr height="63">
<td><font face="Arial, sans-serif" size="2"> Finalized</font></td>
<td><font face="Arial, sans-serif" size="2"> Remove carry forward and resend
<div><font face="Arial, sans-serif" size="2"> email of revised final rate to</font></div>
<div><font face="Arial, sans-serif" size="2"> BusMgr@generic and call districts</font></div>
<div><font face="Arial, sans-serif" size="2"> </font></div>
</font></td>
<td><font face="Arial, sans-serif" size="2"> Wait for revised final rate
<div><font face="Arial, sans-serif" size="2"> via email</font></div>
</font></td>
</tr>
<tr height="63">
<td><font face="Arial, sans-serif" size="2"> Certified</font></td>
<td><font face="Arial, sans-serif" size="2"> Remove carry forward before
<div><font face="Arial, sans-serif" size="2"> final rate sent</font></div>
</font></td>
<td><font face="Arial, sans-serif" size="2"> Wait for revised final rate
<div><font face="Arial, sans-serif" size="2"> via email</font></div>
</font></td>
</tr>
<tr height="70">
<td><font face="Arial, sans-serif" size="2"> Adjustment
<div><font face="Arial, sans-serif" size="2"> in Progress</font></div>
</font></td>
<td><font face="Arial, sans-serif" size="2"> Remove carry forward</font></td>
<td><font face="Arial, sans-serif" size="2"> Wait until 7-30-09 to
<div><font face="Arial, sans-serif" size="2"> continue with adjustments</font></div>
</font></td>
</tr>
<tr height="63">
<td><font face="Arial, sans-serif" size="2"> Preliminary</font></td>
<td><font face="Arial, sans-serif" size="2"> Remove carry forward</font></td>
<td><font face="Arial, sans-serif" size="2"> Begin adjustments on 7-30-09.
<div><font face="Arial, sans-serif" size="2"> No change in process</font></div>
</font></td>
</tr>
</table>
<div><font face="Arial, sans-serif" size="2"> </font></div>
<div><font face="Arial, sans-serif" size="2">The carry forward calculation is one of the adjustments referred to in 34 CFR 75.560 and 76.560. The adjustment will be enhanced in the ICRS and be ready for use in the 2010-11 school year.</font></div>
<div><font face="Arial, sans-serif" size="2"> </font></div>
<div><font face="Arial, sans-serif" size="2">I will be at the OASBO Conference at Eagle Crest Resort and will be discussing and answering questions on this topic during the roundtable session. You may also contact me at <a href="mailto:kristy.hartsell@state.or.us"><font color="#0000FF"><u>kristy.hartsell@state.or.us</u></font></a>
or by phone at 503-947-5619. </font></div>
<div><font face="Arial, sans-serif" size="2" color="#800080"> </font></div>
<div><font face="Arial, sans-serif" size="2" color="#800080"> </font></div>
<div><font face="Arial, sans-serif"><i><b>Thanks,</b></i></font></div>
<div><font face="Arial, sans-serif"><i><b>Kristy Hartsell <br>
Fiscal Analyst III<br>
(503) 947-5619<br>
kristy.hartsell@state.or.us</b></i> <br>
<b>Messages to & from this e-mail address may be made available to the public under Oregon law</b> </font></div>
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</font>
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