Illinois State Board of Education Finance and Audit Committee met April 4

By Kristine Gonzales-Abella

Jun 14, 2023

Illinois State Board of Education Finance and Audit Committee met April 4.

Here are the minutes provided by the committee:

I. Roll Call

Chair Chris Benson brought the meeting to order at 9:33 a.m. Roll call was taken, and a quorum was present with two members. Chair Benson was physically present, and Roger Eddy attended via video conference. Dr. James Anderson arrived later, attending via video conference. Chair Benson verified that each member could hear one another and follow the discussion, and that they were able to testify.

Members Present

Chair Chris Benson

Dr. James Anderson

Roger Eddy

Members Absent

None

Other Board Members Present

Dr. Steven Isoye, Chair of the Board

Staff

Dr. Tony Sanders, State Superintendent

Kim Clarke, Executive Assistant to the State Superintendent

Jo Ireland, Board Services Coordinator

Dr. Jennifer Kirmes, Executive Director of Teaching and Learning

Dr. Erica Thieman, Director of Standards and Instruction

Emily Fox, Director of Educator Effectiveness

Kimberly Barnes-Cummins, Director of Wellness

Dr. Brian Metcalf, Director of Student Care

Tassi Maton, Internal Audit Officer

Dr. Jason Helfer, Deputy Instructional Education Officer

Krish Mohip, Deputy Operational Education Officer

Tom Bazan, Interim Director of Budget and Financial Management

Jeremy Duffy, Legal Officer

II. Public Participation

There was no public participation.

III. Approval of Minutes: February 28, 2023

Mr. Eddy moved that the Finance and Audit Committee approve the February 28, 2023, meeting minutes. Chair Benson seconded the motion, and it passed by a roll call vote. Two were in favor and Dr. Anderson was absent for the vote.

IV. CTE Funding Formula Update

Dr. Kirmes presented this item. She started by providing an overview of Career and Technical Education (CTE) funding, which primarily comes from federal Perkins dollars and a state line item. She discussed the current components of the funding formula at the state level, some challenges that it has presented, and the need for updates.

Mr. Eddy asked about the current system for holding harmless. Dr. Kirmes clarified that even if a program that composed the majority of a CTE entity had closed, the entity would still receive no less than 90% of funding from the prior year under the current system.

Mr. Eddy asked about ISBE administrative funding and maintenance of effort requirements. Dr. Kirmes said that ISBE was required to meet maintenance of effort targets, for which there were a few options. She said that increases to CTE funding would increase the minimum level for maintenance of effort, unless that increase was distributed under certain conditions defined by the Perkins plan.

Mr. Eddy asked how the initial minimum level of effort had been set, and Dr. Kirmes said it had been defined in the Perkins plan ISBE submitted three years ago. Mr. Eddy asked how the maintenance of effort would be affected by an increase from $43 million to $50 million, and Dr. Kirmes said that $50 million would become the new minimum target the following year.

Dr. Anderson asked to confirm that if an entity had lost participants, the 90% hold harmless minimum meant it was possible that remaining participants in the entity could individually receive more than 110% of funding from the previous year. Dr. Kirmes confirmed this was the case and said this was a key concern in formula revision work.

Dr. Sanders asked if ISBE conducted means testing for fund distribution, and Dr. Kirmes said that it does not.

Chair Benson noted the complexity of navigating which elements of funding stemmed from the Perkins plan requirements and which came from added state efforts, and thanked Dr. Kirmes for clarifying.

Dr. Kirmes noted that the work to improve the funding formula for CTE was tied to ISBE goals of promoting educational equity, ensuring that children have access to opportunities from quality CTE programming.

Dr. Kirmes discussed the process for formula adjustments, noting that ISBE staff had been testing adjusted models and engaging with stakeholders. She noted that CTE funding was distributed through Education for Employment Systems, rather than to school districts directly. She said that there has been discussion in previous meetings with system directors and leadership council representatives to determine priorities and guiding principles for developing an updated formula.

Mr. Eddy asked about potential distribution plans for the funding increase to CTE in the fiscal year 2024 budget. Dr. Kirmes said that these funds would be distributed on a per pupil basis, and that it would be accounted for in the plan for 2025. Mr. Eddy asked how additional funding for the coming year could be used. Dr. Kirmes said that ISBE could continue to apply additional funding on a per pupil basis, but that conversations as to an exact plan were still ongoing.

Dr. Kirmes summarized discussion from recent engagement meetings. She said that a transition period was desired for a new formula, but that updates were welcome. She said that funding based on elementary students was valued, but that it is important to recognize the formula as a funding minimum and not a limit. She said that Area Career Centers wanted more stable base funding and noted an interest in setting aside funds for new programs if it did not impact current programs.

Dr. Kirmes said that stakeholders were interested in an equitable formula, but one that was transparent and explainable to enable future planning. She discussed an evaluation that found increased value with full-time system administrators for programming and noted the support for incentives to attract full-time directors. She said stakeholders also discussed industry/work-based learning funding and the funding timeline.

Mr. Eddy asked about the number of part-time directors. Dr. Kirmes said she could follow up with that information.

Dr. Kirmes said staff would continue testing models for the formula and engaging with stakeholders and anticipate having a new formula ready for recommendations to the FY 2025 budget, likely the first year of a longer transition process.

Chair Benson asked about engagement with other states and insight on their CTE systems. Dr. Kirmes said that there was a variable approach to how different states met maintenance of effort, with more and less complicated formulas. Dr. Sanders noted that the Evidence-Based Funding formula has enabled districts flexibility in their expenditures, and some have invested more money in CTE programming.

Mr. Eddy said that increased state revenue could support increases to CTE funding beyond just formula changes, but mentioned the importance of sustainability. Mr. Eddy also noted the importance of funding for capital investments to allow for programs to construct facilities for these programs. Chair Benson agreed, noting the changes that have been made to increase spending flexibility in the legislature. Dr. Kirmes echoed this, noting that Area Career Centers did not have flexibility in the same way that districts did.

Committee members thanked Dr. Kirmes for the presentation.

V. Closed Session

Mr. Eddy moved that the Finance and Audit Committee go into closed session for the following exception items:

A. Litigation, when an action against, affecting or on behalf of the particular public body has been filed and is pending before a court or administrative tribunal, or when the public body finds that an action is probable or imminent, in which case the basis for the finding shall be recorded and entered into the minutes of the closed meeting. 5 ILCS 120/2(c)(11)

B. Meetings between internal or external auditors and governmental audit committees, finance committees, and their equivalents, when the discussion involves internal control weaknesses, identification of potential fraud risk areas, known or suspected frauds, and fraud interviews conducted in accordance with generally accepted auditing standards of the United States of America. 5 ILCS 120/2(c)(29)

C. Discussion of minutes of meetings lawfully closed under this Act, whether for purposes of approval by the body of the minutes or semi-annual review of the minutes as mandated by Section 2.06. 5 ILCS 120/2(c)(21)

He further moved that committee members may invite anyone they wish to be included in this closed session. Dr. Anderson seconded the motion, and it passed by a unanimous roll call vote.

The open meeting recessed at 10:22 a.m. The open meeting reconvened at 11:21 a.m.

VI. Semiannual Review of Closed Session Minutes

Mr. Eddy said that pursuant to Section 2.06(d) of the Open Meetings Act, the Finance and Audit Committee had reviewed the minutes of its closed sessions for October 6, 2022; January 11, 2023; and February 28, 2023.

He moved that the Finance and Audit Committee certifies that the need for confidentiality still exists for all of these minutes, and they should be approved and remain closed.

Dr. Anderson seconded the motion, and it passed by a unanimous roll call vote.

VII. Review of Contracts and Grants Over $1 Million – for April Approval

A. Contracts & Grants Over $1 Million – Approval of Intergovernmental Agreement with the Board of Trustees of the University of Illinois Urbana-Champaign for the provision of the Illinois Early Childhood Asset Map