Minnesota Statutes, section 123B.92, Subdivision 5 defines how school districts report transportation expenditures. The 2013 legislation amended the law to allow a school district that contracts for transportation services to allocate certain transportation expenses based on contract rates under certain circumstances. It also permits districts to report district-owned transportation expenditures based on a cost-per-mile, cost-per-hour, cost-per-route or cost-per-student method. The following is a summary of the law.
A school district may include only the salaries and fringe benefits of district employees as authorized transportation expenditures if:
Salary and fringe benefits of district employees whose primary duties are other than transportation cannot be included in a district’s transportation expenditures. They include:
A district may include a portion of the superintendent’s, business manager’s or other district employee’s salary and fringe benefits if the individual has been designated as the district’s transportation director. If audited, a district must show either a contract or position description where the individual’s transportation duties are outlined. Districts that have a full time transportation manager will not be able to designate any other employee as the transportation director.
The salaries and fringe benefits of district employees who work part-time in transportation (providing direct services to the transportation director) and part-time in other areas may only be included in transportation if there is written documentation such as timesheets or time studies. Examples of these employees could be:
Some expenditures will not be included in the allocation method. They include:
There are four possible methods of reporting transportation expenditures. Districts that contract for services may allocate based on contract rates or the contract-owned standard allocation method based upon a cost-per-mile, cost-per-hour, cost-per-hour or cost-per-student. Districts that use district-owned transportation services may report expenditures based on true rates or district-owned standard allocation method based on a cost-per-mile, cost-per-hour, cost-per-route or a cost-per-student. A district may use a variety of these methods to report transportation expenditures at year-end.
School districts that contract for transportation services may allocate their transportation costs either based on contracted rates or the standard cost-per-mile, cost-per-hour, cost-per-route or cost-per-student basis. Transportation services provided by contractor-owned school bus companies incorporated under different names but owned by the same individual or group of individuals must be treated as the same company for cost allocation purposes.
A school district that contracts for transportation service may allocate transportation expenses to transportation categories based upon contract rates. Districts may only allocate transportation expense to transportation categories based upon contract rates if contract rates are reasonably consistent on a cost-per-hour, cost-per-mile, cost-per-route, or cost-per-student basis. In order to allocate transportation expense based upon contract rates, a school district, if audited, must be able to demonstrate to the auditor that variances in the application of transportation cost basis rates are appropriate.
Districts that receive separate bills for different categories of transportation service from a specific contractor must add the bills together and reallocate the expenditures on a cost-per-mile, cost-per-hour, cost-per-route or cost-per-student basis. If further allocation is needed because students from more than one category ride on the same bus run, districts must further allocate the expenditures on a cost-per-student.
School districts may either direct charge district-owned transportation cost or allocate the amount to the transportation categories based on a cost-per-mile, cost-per-hour-cost-per-route, or a cost-per-student basis.
School districts may charge specific expenses, for example bus drivers’ salaries, fringe benefits and other direct costs directly to the proper transportation category.
The paper Pupil Transportation Annual Report has been modified so that school districts will need to indicate which allocation method they are using.
Cost allocation working papers (either paper or a spreadsheet) must be submitted to MDE at the time of submission of the Pupil Transportation Annual Report. The working papers must show what cost allocation was used and how the cost in each of the categories was determined.
Depending on what allocation method is used, districts will be required to keep documentation of the number of miles, hours, routes or students in each of the categories. In the Financial Accounting for Student Transportation Services handbook, log sheets are available. Districts must be prepared to submit the log sheets.
In addition, employees who work part-time in transportation and part-time in other areas must have either a timesheets or a time study to document the time spent on transportation.
If you have questions about transportation expenditure reporting requirements, contact Kelly Wosika or call 651-582-8855. To view the “Financial Accounting for Student Transportation Services,” handbook, please visit the Transportation Resources page on the Minnesota Department of Education website.