Late File Late Excution Forgiveness Letter
Section 10 of part A of chapter 56 of the laws of 2022 adds new subdivision 5 to §3625 of education law. This amendment relates to transportation aid penalties due to late filed or late executed contracts, and the failure to advertise for contracts for transportation after July 1, 2012. The law provides the Commissioner the authority to consider these expenses as valid and eligible for aid under certain conditions.
Under this provision, for such expenses to be considered valid, such penalties must meet the following criteria:
(1) such school district submitted the contract to the commissioner and such contract is for services in the two thousand twelve--two thousand thirteen school year or thereafter;
(2) such contract is approved by the Commissioner;
(3) all state funds expended by the school district were properly expended for such transportation as approved by the commissioner; and
(4) the failure to execute or file such contract in a timely manner and/or meet such advertisement requirements was an inadvertent administrative or ministerial oversight by the school district or due to extenuating circumstances, and there is no evidence of any fraudulent or other improper intent by such district, as determined by the commissioner.
We have reviewed our records for the covered aid years and uncovered relevant penalties. Transportation contracts that were filed late, executed late, or failed to meet advertisement requirements after July 1, 2012 resulted in a reduction of transportation aid.
The Department maintains records of the approved contracts that led to the relevant aid impacts. To consider such contract expenses as valid, the superintendent of each affected school district must submit and certify a transportation forgiveness form in SED Monitoring and Vendor Performance System (SEDMON) for each penalty for the affected years. The form will include a certification that: (1) all state funds were properly expended for such transportation as approved by the commissioner, and (2) the failure to execute and/or file contracts in a timely manner was an inadvertent administrative or ministerial oversight by the school district or due to extenuating circumstances.
A flat assertion of compliance is not sufficient, each district must diligently review the facts and circumstances of each penalty. The district should provide a substantive response explaining the process used to perform such review, the relevant facts uncovered, and the conclusion of the district with regard to this matter. The Department will utilize the information provided, in conjunction with existing information, to determine whether the penalty created by the late filing(s) is eligible for forgiveness under this provision of law.
Responses should include evidence of a specific rationale of an inadvertent administrative or ministerial oversight that led to the late filing, execution, or failure to comply with advertising requirements. If such evidence or rationale cannot be uncovered, responses should explain district policies and procedures at the time of the contract that serve as internal controls to protect against potential for improper intent. If the Department finds the response is inadequate, the district will be notified and may re-apply should further information be uncovered.
Penalties considered by the Department to be valid for forgiveness after the last scheduled aid payment in the year in which the penalty was taken will be placed on the prior year claims list, as required by Education Law §3604(5). Funds appropriated for the prior year claims list are provided sequentially, in the order that it has been approved for payment by the commissioner. The 2022-23 enacted state budget was the second year in which no funding was provided to satisfy new or existing claims on this list.
Penalties added to the prior year claims list will be repaid to districts once (1) the state resumes appropriating funds for the list and (2) all claims entered previously are satisfied. The list presently contains 3,833 claims for $298.7 million in funding, dating back to February of 2012. If the state resumes the appropriation at $18,664,000 provided most recently in the 2020-21 enacted budget, it will be approximately 16 years before all existing claims are satisfied and new claims can be addressed.
If you have questions about the process, please reach out to transportation@nysed.govIf you have questions about the prior year claims list, please reach out to OMSSAMS@nysed.gov.