District Operated Transportation

Q. What district-operated transportation expenditures can be aided?   (supplies, materials, equipment, salaries, and benefits, contractual)

Approved bus purchase expenditures are tied to the State Contract Price. If there is no State Contract for a vehicle, the approved expenditure is limited to the established ceiling for such a vehicle as determined by the Commissioner of Education. Whenever a school bus is traded in toward the purchase of a new bus, only the net cost after trade-in may be claimed for aid.

Since transportation for field trips, athletic trips, excursions, and noon trips home for lunch do not fall into the "to and from school once daily" category (that is, they are for "other purposes"), any expenditures for these purposes are not allowable for Transportation Aid but are allowable in the calculation of approved operating expense. Therefore, in computing those district-owned transportation expenditures which are allowed for Transportation Aid, the district's allowable transportation operating and bus purchase expenditures are reduced by an amount calculated by multiplying such expenditures by the other purpose ratio.

The expenditures made in transporting nonallowable pupils to and from school once daily must be deducted from total transportation expenses in determining transportation expenses approved for aid. The amount of such nonallowable expenditures is calculated by using the nonallowable pupil decimal. This decimal is multiplied by the net approved bus purchase expenses (after ratio for other purposes has been applied) and transportation operating expenses (after deduction for Native Americans and ratio for other purposes has been applied) to calculate the nonallowable deduction. This decimal must be revised at least once every three years and more frequently under certain circumstances as outlined in Part 156.7 of the Commissioner's Regulations.

Revenues received for transportation services provided by the district are deducted in computing the district's transportation expenditures approved for aid. In the case of providing transportation for nonresidents, the amount received from the district of residence is deducted from total transportation expenditures.

Section 1501-b of the Education Law authorizes school districts to lease buses to the following types of agencies:

  • A Rural Public Transportation Coordination Assistance Program (RPTCAP)

  • Any senior citizens center or organization that is recognized and funded by the office for the aging

  • Any nonprofit incorporated organization serving senior citizens

  • Any nonprofit incorporated organization serving the physically or mentally handicapped

  • Any not-for-profit organization that provides recreation, youth services, or the operation of playgrounds or neighborhood recreation centers

  • Any municipal corporation

  • Any not-for-profit organization providing transportation services in rural counties for children participating in the agricultural child care program

  • Any not-for-profit organization, community based organization, or educational or employment and training agency which provides education or employment and training services for youths and adults in a rural county

  • The consideration to be received for buses leased pursuant to Section 1501-b shall not be less than the full amount of the costs resulting from such lease

  • Volunteer ambulance and fire companies

Authority is also provided in Section 1709 of the Education Law for lease to:

  • Another school district

  • A County Vocational Education and Extension Board


  • A Native American tribe

A district which so leases a bus must deduct the greater of the revenue received from such leasing (ST-3 account codes A2308, A2304 and/or A2440) or an amount equal to the calculated share of operating expenses represented by the mileage (which must be reported on the State Aid Form) of such leased buses.

Refunds of a prior year's transportation expenditures which were eligible for aid, (ST-3 account code A2702), and moneys received from the sale of transportation equipment (the expenditure for which was aidable) (ST-3 account code A2666), must be deducted in computing transportation expenditures approved for aid. Any insurance recoveries received for the repair of a bus damaged by fire, collision, etc., are deducted (ST-3 account code A2680). Insurance recovery funds should claimed in the ST-3, General Fund Revenue, Schedule A3, Account Code A2680, Line 72, as Insurance Recoveries - Transportation Related.

Districts having a contract with the State Education Department for the transportation of Native American pupils must deduct from total transportation expenses the amount paid to the districts by the Education Department (ST-3 account code A2389).

Last Updated: December 12, 2022