Dear County Office of Education Chief Business Officials:

2018–19 First Quarter Lottery Apportionment

The State Controller’s Office (SCO) distributed the 2018–19 first quarter lottery apportionment on January 10, 2019. The total apportioned to county offices of education, school districts, and charter schools is $305,305,222.65 or $49.43 ($49.425126436) per unit of average daily attendance (ADA) for the unrestricted lottery apportionment. The first quarter payment also includes prior-year adjustments due to the recalculation of 2016–17 and 2017–18 lottery apportionments based on actual ADA reports.

To view a copy of the Master Register that lists the ADA, apportionment, adjustments, and net amount actually paid (Remittance Advice) to each county office, school district, charter school, and community college district on a quarterly and year-to-date basis, visit the SCO’s website at https://www.sco.ca.gov/ard_payments_lottery.html. The Master Register lists the following information:

• Average Daily Attendance: The ADA is the actual annual ADA reported for the 2017–18 fiscal year times the statewide average excused absence factor of 1.04446. The Master Register lists charter school ADA separately from the chartering agency.
  
  
• Apportioned Amount: The amount apportioned for the first quarter of 2018–19 consists of unrestricted (non-Proposition 20) lottery funding only. The SCO will distribute 2018–19 Proposition 20 funding when the total statewide lottery revenue for education has exceeded a specified level (typically not until the third or fourth quarter apportionment).
  
  
• ADA Adjustment Amount: The SCO allocates lottery funding based upon prior year annual ADA until the actual annual ADA is available for the current year. Every December, the SCO recalculates lottery funding for the prior two fiscal years according to actual annual ADA (adjusted by the factor of 1.04446) and funding rates per ADA, which change along with statewide ADA totals.

To compute a local educational agency’s (LEA’s) 2017–18 ADA adjustment amount:

1. Multiply the LEA’s 2016–17 annual ADA (as listed on the 2017–18 fourth quarter master register and adjusted by 1.04446) by the old 2017–18 rates of $156.012694314 for the unrestricted lottery apportionment and $59.878536388 for the Proposition 20 apportionment. This total is the amount apportioned during the 2017–18 fiscal year.
2. Multiply the LEA’s 2017–18 annual ADA (adjusted by 1.04446) by the new 2017–18 rates of $155.860593589 for the unrestricted lottery apportionment and $59.943135712 for the Proposition 20 apportionment. This total is the amount that the LEA should have received for the 2017–18 fiscal year (prior to any lottery revenue adjustments).
3. The difference between the two calculations is the ADA adjustment amount for the 2017–18 fiscal year.

To compute a LEA’s 2016–17 ADA adjustment amount:

1. Multiply the LEA’s 2016–17 annual ADA as listed on the 2017–18 fourth quarter master register (adjusted by 1.04446) by the old 2016–17 rates of $146.135400751 for the unrestricted lottery apportionment and $49.648759258 for the Proposition 20 apportionment. This total is the amount apportioned for the 2016–17 fiscal year.
2. Multiply the LEA’s revised (if no revision, use the same ADA as above) 2016–17 annual ADA (adjusted by 1.04446) by the new 2016–17 rates of $146.135020096 for the unrestricted lottery apportionment and $49.648618223 for the Proposition 20 apportionment. This total is the amount that the LEA should have received for the 2016–17 fiscal year.
3. The difference between the two calculations is the ADA adjustment amount for the 2016–17 fiscal year.

• Accounts Receivable Balance: This amount represents the balance of any accounts receivable due to the State from a LEA.
  
  
• Paid Amount: This total reflects the actual amount paid by the SCO, including the first quarter apportionment and any prior year adjustments.
  
  
• Non-Proposition 20: The use of non-Proposition 20 lottery funds is unrestricted. However, pursuant to Government Code Section 8880.5, LEAs must use this lottery funding exclusively for the education of pupils and may not use this revenue for the acquisition of real property, construction of facilities, financing of research, or other non-instructional purposes.
  
  
• Proposition 20: Proposition 20 lottery funding is restricted for the purchase of instructional materials. California Education Code Section 60010 defines instructional materials.

The California Department of Education requests that county superintendents of schools inform LEAs immediately of this apportionment. If you have any questions regarding the lottery apportionment, please contact Janet Finley, Fiscal Consultant, by phone at 916-323-5091 or by email at jfinley@cde.ca.gov [Note: The preceding contact, phone, and email information is no longer valid. Please contact the Categorical Allocations and Audit Resolution Office at CAAR@cde.ca.gov.].

Sincerely,

Caryn Moore, Director
School Fiscal Services Division