BILL ANALYSIS Ó
AB 2435
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CONCURRENCE IN SENATE AMENDMENTS
AB 2435 (Roger Hernandez)
As Amended August 13, 2012
Majority vote
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|ASSEMBLY: |56-15|(May 29, 2012) |SENATE: |22-15|(August 22, |
| | | | | |2012) |
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Original Committee Reference: ED.
SUMMARY : Establishes rules governing the indirect rate that local
education agencies (LEAs) may charge when implementing federal or
state grant programs. Specifically, this bill :
1)Defines "direct cost" as a cost that provides measurable, direct
benefits to a particular program of an agency, including, but not
limited to, salaries and benefits of teachers and aides, costs of
purchasing textbooks and instructional supplies, and costs for
providing pupils with counseling, health services, and
transportation.
2)Defines "indirect cost" as the agency-wide, general management
cost of the activities for the direction and control of the agency
as a whole, including, but not limited to, administrative
activities necessary for the general operation of the agency, as
specified.
3)Defines "indirect cost rate" as the indirect cost rate established
by California Department of Education (CDE) for each school
district.
4)Requires the CDE or any other state agency that administers a
grant or allocation of federal funds to a school district to allow
an indirect cost rate that is not less than the indirect cost rate
established by CDE for each district, unless federal or state law
requires a lower cost rate.
The Senate amendments clarify the definition of "school district"
and establish a sunset date of January 1, 2016.
FISCAL EFFECT : According to the Senate Appropriations Committee,
this bill has no direct fiscal impact on the state, since any
potential funding distribution would occur within a program and a
AB 2435
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set amount of grant funding already dedicated to that program..
COMMENTS : When implementing a grant program, LEAs incur indirect
costs, which include the cost of administrative activities necessary
for the general operation of the agency, such as accounting,
budgeting, payroll preparation, personnel services, purchasing, and
centralized data processing. LEAs are typically allowed to allocate
a fixed percentage of the grant (the indirect cost rate) to these
overhead activities. The CDE periodically assigns an allowed
indirect cost rate for each LEA. For the Los Angeles County Office
of Education, the sponsors of this bill, the CDE-established rate is
9.31%.
This bill requires CDE or any other state agency that administers a
grant or allocation of federal funds to a school district to allow
an indirect cost rate that is not less than the indirect cost rate
established by CDE for each district, unless federal or state law
requires a lower cost rate.
Analysis Prepared by : Rick Pratt / ED. / (916) 319-2087 FN:
0004825