Section 19-1913-A - Financial Program; Reimbursement of Payments(a)(1) Except as otherwise provided in paragraph (2), the plan submitted by the local sponsor shall set forth a financial program for the operation of the community college. The plan shall provide that the local sponsor shall appropriate or provide to the community college an amount at least equal to the community college's annual operating costs less the student tuition as determined in section 1908-A(a) less the Commonwealth's payment as determined in subsection (b)(1) of this section. The plan shall also provide that one-half of the annual capital expenses shall be appropriated or provided by the local sponsor to the community college. The local sponsor's appropriation for annual operating costs and annual capital expenses may in part be represented by real or personal property or services made available to the community college. The plan shall indicate whether the appropriation shall come from general revenues, loan funds, special tax levies or from other sources, including student tuitions.(2)(i) Notwithstanding the provisions of paragraph (1), for a community college that is sponsored by one or more school districts, has an enrollment head count in excess of 20,000 and consists of more than four campuses that are approved by both the Department of Education and the Middle States Association of Colleges and Schools, the plan submitted by the local sponsor shall set forth a financial program for the operation of the community college and shall provide that the local sponsor shall appropriate or provide to the community college for the community college's annual operating costs and annual capital expenses an amount negotiated by the governing body of the local sponsor and the community college, provided that the amount negotiated shall not exceed the sum of:(A) an amount at least equal to the community college's annual operating costs less the student tuition as determined in section 1908-A(a) less the Commonwealth's payment as determined in subsection (b)(1); and(B) one-half of the annual capital expenses of the community college.(ii) The local sponsor's appropriation for annual operating costs and annual capital expenses may in part be represented by real or personal property or services made available to the community college. The plan shall indicate whether the appropriation shall come from general revenues, loan funds, special tax levies or from other sources, including student tuitions.(iii) For purposes of this paragraph, the term "enrollment head count" shall mean the number of students enrolled on a full-time or part-time basis at a community college in the immediately preceding fall semester.(b)(1) The Commonwealth shall pay to a community college on behalf of the sponsor on account of its operating costs during the fiscal year from funds appropriated for that purpose an amount equal to:(i) for the 1993-1994 fiscal year through the 2000-2001 fiscal year, the lesser of such college's variable State share ceiling as determined in clause (1.3) or such college's equivalent full-time student reimbursement as determined in clause (1.4);(ii) for the 2001-2002 fiscal year through the 2004-2005 fiscal year, the college's equivalent full-time student reimbursement as determined in clause (1.4);(iii) for the 2005-2006 fiscal year, the college's payment as determined in clause (1.5); and(iv) for the 2006-2007 fiscal year and each fiscal year thereafter, the college's payment as determined in clause (1.6).(1.2) The Secretary of Education, in consultation with the community colleges, shall promulgate standards for credit courses and for noncredit courses that will be eligible for Commonwealth reimbursement. The standards shall specifically exclude from eligibility for reimbursement any course or program in noncareer, nontechnical or recreational pursuits. The standards shall be promulgated by the beginning of the 1994-1995 fiscal year. Until such standards are promulgated, no community college will be reimbursed for any credit course which was offered by such college as a noncredit course during the college's 1992-1993 fiscal year.(1.3) The variable State share ceiling of a community college shall be determined as follows: (i) Subtract the taxable income per person of the local sponsor from the highest taxable income per person of any county in the Commonwealth.(ii) Divide the amount determined under subclause (i) by the difference between the highest taxable income per person of any county in the Commonwealth and the lowest taxable income per person of any county in the Commonwealth.(iii) Multiply the quotient determined under subclause (ii) by one-sixth.(iv) Add one-third to the product determined under paragraph (iii).(v) Multiply the sum determined under subclause (iv) by the community college's operating costs in the year for which reimbursement is being claimed.(vi) The taxable income per person data used in the preceding calculation shall be data certified to the Secretary of Education by the Secretary of Revenue under section 2501(9.1) for school district local sponsors or data otherwise published by the Secretary of Revenue for a municipal local sponsor.(1.4) The equivalent full-time student reimbursement of a community college shall be the sum of credit course, noncredit course and stipend reimbursements. These reimbursements shall be calculated using a reimbursement factor of one thousand and forty dollars ($1,040) for the 1993-1994 fiscal year, of one thousand eighty dollars ($1,080) for the 1994-1995 fiscal year and of one thousand one hundred eighty dollars ($1,180) for the 1995-1996 fiscal year and one thousand and two hundred and ten dollars ($ 1,210) for the 1996-1997 fiscal year and one thousand two hundred sixty dollars ($1,260) for the 1997-1998 fiscal year and the 1998-1999 fiscal year and one thousand three hundred dollars ($1,300) for the 1999-2000 fiscal year and one thousand four hundred dollars ($1,400) for the 2000-2001 fiscal year and one thousand five hundred dollars ($1,500) for the 2001-2002 fiscal year and for each year thereafter and shall be determined as follows: (i) Credit course reimbursement shall be calculated by multiplying the reimbursement factor by the number of equivalent full-time students enrolled in credit courses as determined by an audit to be made in a manner prescribed by the State Board of Education.(ii) Noncredit course reimbursement shall be calculated as follows:(A) eighty percent (80%) of the reimbursement factor multiplied by the number of equivalent full-time students enrolled in eligible noncredit courses for the 1993-1994 fiscal year, as determined by the audit referred to in paragraph (i);(B) seventy percent (70%) of the reimbursement factor multiplied by the number of equivalent full-time students enrolled in eligible noncredit courses for the 1994-1995 fiscal year and for each year thereafter, as determined by the audit referred to in paragraph (i); or(C) one hundred percent (100%) of the reimbursement factor multiplied by the number of equivalent full-time students enrolled in eligible noncredit public safety courses that provide training for volunteer firefighters and emergency medical services for the 1995-1996 fiscal year and for each year thereafter, as determined by the audit referred to in paragraph (i).(iii) Stipend reimbursement on account of a community college's operating costs for all equivalent full-time students enrolled in the following categories of two-year or less than two-year occupational or technical programs, shall be the sum of the following: (A) One thousand one hundred dollars ($1,100) per full-time equivalent student enrolled in advanced technology programs. For the fiscal year 1995-1996, 1996-1997 and 1997-1998, the reimbursement rate shall be calculated at one thousand one hundred seventy-five dollars ($1,175) per full-time equivalent student enrolled in advanced technology programs. For the fiscal year 1998-1999 and each year thereafter, the reimbursement rate shall be calculated at one thousand four hundred sixty dollars ($1,460) per full-time equivalent student enrolled in advanced technology programs. Advanced technology programs are programs using new or advanced technologies which hold promise for creating new job opportunities, including such fields as robotics, biotechnology, specialized materials and engineering and engineering-related programs.(B) One thousand dollars ($1,000) per full-time equivalent student enrolled in programs designated as Statewide programs. For the fiscal year 1995-1996, 1996-1997 and 1997-1998, the reimbursement rate shall be calculated at one thousand seventy-five dollars ($1,075) per full-time equivalent student enrolled in programs designated as Statewide programs. For the fiscal year 1998-1999 and each year thereafter, the reimbursement rate shall be calculated at one thousand three hundred sixty dollars ($1,360) per full-time equivalent student enrolled in programs designated as Statewide programs. A Statewide program is a program which meets one or more of the following criteria:(I) Program enrollment from out-of-sponsor area is twenty per cent or more of the enrollment for the program.(II) A consortial arrangement exists with another community college to cooperatively operate a program or share regions in order to avoid unnecessary program duplication.(C) Five hundred dollars ($500) per full-time equivalent student enrolled in other occupational or technical programs. For the fiscal year 1995-1996, 1996-1997 and 1997-1998, the reimbursement rate shall be calculated at five hundred seventy-five dollars ($575) per full-time equivalent student enrolled in other occupational or technical programs. For the fiscal year 1998-1999 and each year thereafter, the reimbursement rate shall be calculated at eight hundred sixty dollars ($860) per full-time equivalent student enrolled in other occupational or technical programs.(1.5) For the 2005-2006 fiscal year, the payment for a community college shall consist of the following: (i) Each community college shall receive reimbursement for operating costs equal to the reimbursement for the 2004-2005 fiscal year as determined under clause (1.4)(i) and (ii). This amount shall be determined based upon the midyear rebudget submitted by a community college in February 2005.(ii) Each community college shall receive an economic development stipend as calculated under clause (1.7).(iii) Each community college shall receive a base supplement determined by: (A) subtracting the total amount of funds determined under subclauses (i) and (ii) from the State appropriation for payment of approved operating expenses of community colleges for the 2005-2006 fiscal year;(B) dividing the payment under subclauses (i) and (ii) by the sum of the amounts determined for all community colleges under subclauses (i) and (ii); and(C) multiplying the quotient from subparagraph (B) by an amount equal to seventy-five percent (75%) of the amount determined under paragraph (A).(iv) Each community college with a 2003-2004 equivalent full-time enrollment in credit, noncredit and workforce development courses greater than its 2002-2003 equivalent full-time enrollment in credit, noncredit and workforce development courses shall receive a growth supplement amount determined by:(A) subtracting its 2002-2003 equivalent full-time enrollment in credit, noncredit and workforce development courses from its 2003-2004 equivalent full-time enrollment in credit, noncredit and workforce development courses;(B) dividing the difference from paragraph (A) by the sum of the differences from paragraph (A) for all community colleges; and(C) multiplying the quotient from paragraph (B) by an amount equal to twenty-five percent (25%) of the amount determined under subclause (iii)(A). Calculations under this subclause shall be based upon the final claim forms submitted by a community college for the 2002-2003 and 2003-2004 fiscal years.(1.6) For the 2006-2007 fiscal year and each fiscal year thereafter, the payment for a community college shall consist of the following:(i) Each community college shall receive an amount equal to the reimbursement for operating costs, base supplement and growth supplement amounts it received in the immediately preceding fiscal year.(ii) Each community college shall receive an economic development stipend as calculated under clause (1.7). The amount available for economic development stipends shall increase each year by the percent increase in the State appropriation for payment of approved operating expenses of community colleges and may include any other private or public funds appropriated or otherwise made available to the Department of Education for that purpose.(iii) Each community college shall receive a base supplement determined by:(A) subtracting the total amount of funds determined under subclauses (i) and (ii) from the State appropriation for payment of approved operating expenses of community colleges;(B) dividing the payment under subclause (i) by the sum of the amounts determined for all community colleges under subclause (i); and(C) multiplying the quotient from paragraph (B) by an amount equal to seventy-five percent (75%) of the amount determined under paragraph (A).(iv) Each community college with an equivalent full-time enrollment in credit, noncredit and workforce development courses for the year prior to the immediately preceding year greater than its equivalent full-time enrollment in credit, noncredit and workforce development courses for the second year prior to the immediately preceding year shall receive a growth supplement amount determined by: (A) subtracting its equivalent full-time enrollment in credit, noncredit and workforce development courses for the second year prior to the immediately preceding year from its equivalent full-time enrollment in credit, noncredit and workforce development courses for the year prior to the immediately preceding year;(B) dividing the difference from paragraph (A) by the sum of the differences from paragraph (A) for all community colleges; and(C) multiplying the amount from paragraph (B) by an amount equal to twenty-five percent (25%) of the amount determined under subclause (iii)(A). Secondary senior high school students enrolled in credit-bearing, nonremedial college courses shall be included in the calculation under paragraph (A). Calculations under this subclause shall be based upon the audited financial statements submitted by a community college pursuant to subsection (k.1).
(v) Subclauses (i), (ii), (iii) and (iv) shall not apply to the 2011-2012, 2012-2013 and 2013-2014 fiscal years, and each fiscal year thereafter.(vi) For the 2011-2012 fiscal year, each community college shall receive an amount equal to the sum of the following: (A) A reimbursement for operating costs determined by:(I) dividing the amount of funding that the community college received in fiscal year 2010-2011 under section 1722-L(a)(7) of the act of April 9, 1929 (P.L. 343, No. 176), known as "The Fiscal Code," by the total amount of funding provided to all community colleges in fiscal year 2010-2011 undersection 1722-L(a)(7) of "The Fiscal Code"; and(II) multiplying the quotient under subparagraph (I) by $168,167,000.(B) An economic development stipend determined by:(I) dividing the amount of funding that the community college received in fiscal year 2010-2011 under section 1722-L(a)(7) of "The Fiscal Code," by the total amount of funding provided to all community colleges in fiscal year 2010-2011 under section 1722-L(a)(7) of "The Fiscal Code"; and(II) multiplying the quotient under subparagraph (I) by $44,000,000.(vii) For the 2012-2013 fiscal year, each community college shall receive an amount equal to the sum of the following:(A) A reimbursement for operating costs determined by: (I) dividing the amount of funding that the community college received in fiscal year 2011-2012 under subclause (vi)(A) by the total amount of funding provided to community colleges in fiscal year 2011-2012 under subclause (vi)(A); and(II) multiplying the quotient under subparagraph (I) by $168,167,000.(B) An economic development stipend determined by: (I) dividing the amount of funding that the community college received in fiscal year 2011-2012 under subclause (vi) (B) by the total amount of funding provided to all community colleges in fiscal year 2011-2012 under subclause (vi)(B); and(II) multiplying the quotient under subparagraph (I) by $44,000,000.(viii) For the 2013-2014 fiscal year, each community college shall receive an amount equal to the sum of the following: (A) A reimbursement for operating costs determined by:(I) dividing the amount of the funding that the community college received in fiscal year 2012-2013 under subclause (vii)(A) by the total amount of funding provided to community colleges in fiscal year 2012-2013 under subclause (vii)(A); and(II) multiplying the quotient under subparagraph (I) by one hundred sixty-eight million one hundred sixty-seven thousand dollars ($168,167,000).(B) An economic development stipend determined by: (I) dividing the amount of funding that the community college received in fiscal year 2012-2013 under subclause (vii) (B) by the total amount of funding provided to all community colleges in fiscal year 2012-2013 under subclause (vii)(B); and(II) multiplying the quotient under subparagraph (I) by forty-four million dollars ($44,000,000). (ix) For the 2016-2017 fiscal year, each community college shall receive an amount equal to the following: (A) An amount equal to the reimbursement for operating costs received in fiscal year 2013-2014 under subclause (viii)(a) plus the increase received in fiscal year 2014-2015 under section 1722-J(17) of "The fiscal code" and the increase received in fiscal year 2015-2016 under section 1722-L(18.1) of "The fiscal code."(B) An amount equal to the economic development stipend received in fiscal year 2013-2014 under subclause (viii)(b).(C) An additional amount for operating costs determined for each community college as follows: (I) Multiply the audited full-time equivalent enrollment as verified under subsection (k.1) for the most recent year available for the community college by the difference between the appropriation for payment of approved operating expenses of community colleges in the 2016-2017 fiscal year and the sum of the amounts in units (a) and (b).(II) Divide the product in subunit (i) by the sum of the audited full-time equivalent enrollment as verified under subsection (k.1) for the most recent year available for all community colleges.(x) For the 2017-2018 fiscal year, each community college shall receive the following:(A) For operating costs, an amount equal to the amounts received in fiscal year 2016-2017 under subclause (ix)(A) and (C).(B) For the economic development stipend, an amount equal to the amount received in fiscal year 2016-2017 under subclause (ix)(B).(xi) For the 2018-2019 fiscal year, each community college shall receive an amount equal to the following: (A) An amount equal to the reimbursement for operating costs received in fiscal year 2017-2018 under Subclause (x)(A).(B) An amount equal to the economic development stipend received in fiscal year 2017-2018 under Subclause (x)(B).(C) For each community college that receives funding under units (A) and (B), an additional amount for operating costs determined for each community college as follows: (I) Multiply the audited full-time equivalent enrollment as verified under subsection (k.1) for the most recent year available for the community college by the difference between the appropriation for payment of approved operating expenses of community colleges in the 2018-2019 fiscal year and the sum of the amounts in units (A) and (B).(II) Divide the product in subunit (i) by the sum of the audited full-time equivalent enrollment as verified under subsection (k.1) for the most recent year available for all community colleges. (xii) For the 2019-2020 fiscal year, each community college shall receive an amount equal to the following: (A) An amount equal to the reimbursement for operating costs received in fiscal year 2018-2019 under subclause (xi)(A) and (C).(B) An amount equal to the economic development stipend received in fiscal year 2018-2019 under subclause (xi)(B).(C) For each community college that receives funding under units (A) and (B), an additional amount for operating costs determined for each community college, as follows: (I) Multiply the audited full-time equivalent enrollment as verified under subsection (k.1) for the most recent year available for the community college by the difference between the appropriation for payment of approved operating expenses of community colleges in the 2019-2020 fiscal year and the sum of the amounts in units (A) and (B).(II) Divide the product in subunit (I) by the sum of the audited full-time equivalent enrollment as verified under subsection (k.1) for the most recent year available for all community colleges. (xiii) For the 2020-2021 fiscal year, each community college shall receive an amount equal to the following: (A) An amount equal to the reimbursement for operating costs received in fiscal year 2019-2020 under subclause (xii)(A) and (C).(B) An amount equal to the economic development stipend received in fiscal year 2019-2020 under subclause (xii)(B). (xiv)For the 2021-2022 fiscal year, each community college shall receive an amount equal to the following: (A)An amount equal to the reimbursement for operating costs received in fiscal year 2019-2020 under subclause (xii)(A) and (C).(B)An amount equal to the economic development stipend received in fiscal year 2019-2020 under subclause (xii)(B).(xv)For fiscal year 2021-2022, a community college approved by the State Board of Education during the 2020 calendar year shall receive an amount equal to the difference between the amount appropriated for the allocation of community college funding and the sum of the amounts determined for community colleges under clause (xiv).(xvi) For the 2022-2023 fiscal year, each community college shall receive an amount equal to the following: (A) An amount equal to the reimbursement for operating costs received in fiscal year 2019-2020 under subclause (xii)(A) and (C).(B) An amount equal to the economic development stipend received in fiscal year 2019-2020 under subclause (xii)(B).(C) For each community college that receives funding under units (A) and (B), an additional amount for operating costs determined for each community college, as follows: (I) Multiply the audited full-time equivalent enrollment as verified under subsection (k.1) for the most recent year available for the community college by $9,755,000.(II) Divide the product in subunit (I) by the sum of the audited full-time equivalent enrollment as verified under subsection (k.1) for the most recent year available for all community colleges that receive funding under units (A) and (B).(xvii) For fiscal year 2022-2023, a community college approved by the State Board of Education during the 2020 calendar year shall receive an amount equal to the difference between the amount appropriated for the allocation of community college funding and the sum of the amounts determined for community colleges under subclause (xvi). (xviii) For the 2023-2024 fiscal year, each community college shall receive an amount equal to the following: (A) An amount equal to the reimbursement for operating costs received in fiscal year 2022-2023 under subparagraphs (xvi)(a) and (c) and (xvii).(B) An amount equal to the economic development stipend received in fiscal year 2022-2023 under subparagraph (xvi)(b).(C) For each community college that receives funding under clauses (A) or (B), an additional amount for operating costs determined for each community college, as follows: (i) Multiply the audited full-time equivalent enrollment as verified under subsection (k.1) for the most recent year available for the community college by $5,130,000.(ii) Divide the product in subclause (i) by the sum of the audited full-time equivalent enrollment as verified under subsection (k.1) for the most recent year available for all community colleges that receive funding under subparagraphs (A) and (B). (1.7) The payment for a community college shall include an economic development stipend which shall consist of the following:(i) For the 2005-2006 fiscal year, each community college shall receive an amount equal to the reimbursement for the 2004-2005 fiscal year as determined under clause (1.4)(iii) and under section 1501 of theact of December 18, 2001 (P.L. 949, No. 114), known as the "Workforce Development Act." This amount shall be determined based upon the midyear rebudget submitted by a community college in February 2005.(ii) For the 2006-2007 through 2008-2009 fiscal years, each community college shall receive, subject to the provisions of subclause (iii), an amount determined by: (A) Adding the following:(I) The number of full-time equivalent students enrolled in high-priority and high-instructional-cost occupation programs at the community college multiplied by 1.50;(II) The number of full-time equivalent students enrolled in high-priority occupation programs at the community college multiplied by 1.25; And(III) The number of full-time equivalent students enrolled in noncredit workforce development courses at the community college.(B) Dividing the total from paragraph (a) by the sum of the totals from paragraph (a) for all community colleges.(C) Multiplying the amount from paragraph (b) by the amount allocated for the economic development stipend pursuant to clause (1.6)(ii).(D) Applying the following:(I) For the 2006-2007 fiscal year, for the first, second and third quarter payments made in the 2007-2008 fiscal year, and for the first and second quarter payments made in the 2008-2009 fiscal year and each fiscal year thereafter, the number of fulltime equivalent students shall be determined based upon the final midyear rebudget submitted by a community college for the prior fiscal year. Such rebudget shall be submitted, as required by the department of education, no later than May 31, 2006, and May 31 of each year thereafter.(II) For the 2007-2008 fiscal year, the department of education shall provide the fourth quarter payment to each community college under this subclause based upon the number of full-time equivalent students enrolled in high-priority and high-instructional-cost occupation programs, high-priority occupation programs and noncredit workforce development courses for the 2006-2007 fiscal year, as verified in the audited financial statement required under subsection (k.1).(III) For the 2008-2009 fiscal year , the department of education shall provide the third and fourth quarter payments to each community college under this subclause based upon the number of full-time equivalent students enrolled in high-priority and high-instructional-cost occupation programs, high-priority occupation programs and noncredit workforce development courses for the immediately preceding fiscal year, as verified in the audited financial statement required under subsection (k.1). (iii) For the 2006-2007 and 2007-2008 fiscal years, the following shall apply:(A) Full-time equivalent students enrolled in stipend advanced technology programs shall be counted as full-time equivalent students enrolled in high-priority and high-instructional-cost occupation programs for the purpose of the calculation in subclause (ii).(B) Full-time equivalent students enrolled in stipend Statewide programs shall be counted as full-time equivalent students enrolled in high-priority occupation programs for the purpose of the calculation in subclause (ii).(C) Full-time equivalent students enrolled in other stipend occupational programs and workforce development courses shall be counted as full-time equivalent students enrolled in noncredit workforce development courses for the purpose of the calculation in subclause (ii).(D) For reimbursement for any semester that begins on or after January 1, 2006, this subclause shall only apply for students who were enrolled in such programs during the fall 2005 semester.(1.8) [Deleted by 2017 Amendment.](2) For the 1993-1994 fiscal year, each community college shall be reimbursed under clause (1) in an amount which is at least equal to a one percent (1%) increase over its 1992-1993 operating cost and stipend reimbursement. In no case shall a community college's 1993-1994 reimbursement under clause (1) per full-time equivalent student, insofar as said reimbursement does not include a proportionate share attributable to stipend reimbursement under clause (1.4)(iii), exceed its 1992-1993 operating cost reimbursement per full-time equivalent student by more than ten percent (10%).(2.1) For the 1994-1995 fiscal year, each community college shall be reimbursed under clause (1) in an amount which is at least equal to a one percent (1%) increase over its 1993-1994 reimbursement under clause (1). In no case shall a community college's 1994-1995 reimbursement under clause (1) per full-time equivalent student, insofar as said reimbursement does not include the proportionate share attributable to stipend reimbursement under clause (1.4)(iii), exceed its 1993-1994 reimbursement under clause (1) per full-time equivalent student, insofar as said reimbursement does not include the proportionate share attributable to stipend reimbursement under clause (1.4)(iii) by more than ten percent (10%).(2.2) For the 1995-1996 fiscal year, each community college shall be reimbursed under clause (1) in an amount which is at least equal to its 1994-1995 reimbursement under clause (1).(3) The Secretary of Education annually shall establish criteria to be used to determine eligibility of programs for each of the above stipend categories, shall approve programs for funding in the following fiscal year according to these criteria and shall submit to chairmen of the committees of education in the House of Representatives and Senate a report setting forth the established criteria, any programs approved for funding under these criteria and the recipient community colleges.(4) Each community college shall maintain such accounting and student attendance records on generally accepted principles and standards as will lend themselves to satisfactory audit. The Commonwealth shall pay to a community college on behalf of the sponsor on account of its capital expenses an amount equal to one-half of such college's annual capital expenses from funds appropriated for that purpose to the extent that said capital expenses have been approved as herein provided.(5) For purposes of determining Commonwealth reimbursement of operating costs, Federally funded expenditures for those programs in which the Commonwealth participates in the cost shall be deducted from total operating expenditures to determine net reimbursable operating costs.(c)(1) Capital expenses shall mean only such expenses as are incurred with the approval of the Department of Education for amortization of the purchase of lands; purchase, construction or improvement of buildings for administrative and instructional purposes, including libraries; the lease of lands or buildings, or for rentals to an authority for the same purpose; and, prior to July 1, 2005, for the purchase, lease or rental of capital equipment and furniture used for instructional or administrative purposes. Capital expenses shall include library books and complementary audio-visual equipment purchased during the first five years after establishment. On or after July 1, 2005, capital expenses may include such expenses as are incurred with the approval of the Department of Education for the purchase, lease or rental of capital equipment and furniture used for instructional or administrative purposes. For the purpose of calculating the Commonwealth's share of operating, and capital costs incurred prior to the actual admission of students to a community college, all such costs shall be interpreted as capital costs. No costs and expenses incurred in the establishment, construction, operation or maintenance of dormitories, or the equipment or furnishings for such purposes, shall be included in capital expenses or operating costs for purposes of Commonwealth reimbursement.(2) The provisions of this subsection shall not prevent the Commonwealth from reimbursing a community college for capital expenses incurred prior to the effective date of this act. Such reimbursement must have approval of the Secretary of Education.(3) Notwithstanding any other provision of this act, a community college may use a portion of its payment of approved operating expenses for capital expenses not otherwise reimbursed by the Department of Education.(c.1) Notwithstanding any provision of law to the contrary, two or more community colleges may jointly enter into a financing arrangement through the State Public School Building Authority for the purchase, lease or construction of capital projects deemed necessary by the community colleges. The terms and conditions of the financing arrangement shall be consistent with the terms and conditions set forth in the act of July 5, 1947 (P.L. 1217, No. 498), known as the "State Public School Building Authority Act."(d) The State Board of Education shall adopt policies, standards, rules and regulations for determining reimbursable capital expenses and operating costs, and the Department of Education shall approve such expenses and costs for the purpose of reimbursement by the Commonwealth.(e) The State Board of Education shall apply for, receive and administer, subject to any applicable regulations or laws of the Federal Government or any agency thereof, any Federal grants, appropriations, allocations and programs to fulfill the purpose of this act.(f) All administrative personnel, faculty, and other employes of the community colleges in the Commonwealth shall be eligible for inclusion in the Public School Employees' Retirement System of Pennsylvania, the Pennsylvania State Employees' Retirement System, or any independent retirement program approved by the Board of Trustees of a community college, and the Secretary of Education.(g) The community college in the Commonwealth shall be eligible for participation in the act of July 5, 1947 (P.L. 1217, No. 498), known as the "State Public School Building Authority Act," and the act of May 2, 1945 (P.L. 382, No. 164), known as the "Municipality Authorities Act of 1945." (h) In all cases where the board of trustees of any community college fails to pay or provide for the payment of any rental or rentals due the State Public School Building Authority or any municipality authority for any period in accordance with the terms of any lease entered into between the board of trustees of any community college and the State Public School Building Authority or any municipality authority, or fails to pay or to provide for the payment of any other indebtedness when due, upon written notice thereof from the State Public School Building Authority or any municipality authority, or in such cases where an audit reveals any unpaid indebtedness due, the Secretary of Education shall notify the board of trustees of its obligation and shall withhold out of any State appropriation that may be due to such community college an amount equal to the amount of rental or rentals owing by such board of trustees to the State Public School Building Authority or any municipality authority, or an amount equal to the amount of any other indebtedness owing by such board of trustees, and shall pay over the amount or amounts so withheld to the State Public School Building Authority or any municipality authority or to whomsoever any other indebtedness is due and owing.(i) The amount payable to each community college Board of Trustees on behalf of the sponsor shall be paid in the year in which the costs and expenses are incurred in quarterly installments and the Secretary of Education shall draw his requisition quarterly upon the State Treasurer in favor of each community college for the amount of reimbursement to which it is entitled. Reimbursement or payment by the Commonwealth for the operational expenses and capital equipment and the furnishings shall be made on or before the end of the fiscal quarters ended on September 30, December 31, March 31 and June 30 of each Commonwealth fiscal year. Reimbursements or payments shall be made semi-annually for the Commonwealth's share of the annual rentals to an authority or the sponsor or sinking fund or debt-service payments and other leases upon submission of a community college requisition in the form required by the Commonwealth, the reimbursement or payment to be made from funds appropriated for that purpose. Money that is appropriated under this subsection but not expended by a community college board of trustees shall not be distributed to a local sponsor.(j) In no event shall the payments or final reimbursement made by the department following audit exceed the appropriation available for community colleges.(k) For fiscal years up to and including the 2004-2005 fiscal year, audits of community colleges shall be conducted as follows:(1) Unless otherwise prescribed by the State Board of Education, the Commonwealth's fiscal audits of community colleges under this section shall be conducted in accordance with "Government Auditing Standards," latest revision, promulgated by the United States General Accounting Office. Written audit reports will be produced and will be sent to the community college by the Commissioner of Postsecondary/Higher Education. Any cost disallowed under findings contained in the audit report shall be considered an adjudication within the meaning of 2 Pa.C.S. (relating to administrative law and procedure) and regulations promulgated thereunder.(2) The Secretary of Education is hereby specifically authorized and shall be required to resolve audit findings involving disallowed costs that are contested by community colleges except for audit findings that involve mathematical errors, violation of regulations or alleged illegal activities. The proposed resolution of the Secretary of Education shall not be subject to the provisions of 2 Pa.C.S. The Secretary of Education's notice to resolve audit findings shall be sent to the community college in writing. The Secretary of Education may resolve the audit findings by reducing the disallowed costs related thereto in whole or in part.(3) The Secretary of Education's notice to resolve an audit finding by reducing or eliminating the disallowed costs must be made contingent upon the community college developing and implementing a corrective action plan to address the audit finding. The community college must submit a corrective action plan to the Secretary of Education within 60 days after receipt of the Secretary of Education's written notice to resolve the audit finding. The Secretary of Education shall approve, reject or alter the plan submitted by the community college within thirty (30) days of submission. After the community college receives written notice of approval or agrees in writing to the Secretary of Education's alterations of the corrective action plan, said plan shall be implemented and shall be binding on the community college. Implementation of the approved or agreed upon corrective action plan will be verified by an audit conducted by the department no later than the end of the fiscal year following the fiscal year during which the plan is implemented. If no agreed upon corrective action plan is in place within one year after the date of the Secretary of Education's written notice to resolve audit findings or if the agreed upon corrective action has not been implemented within one year after the date of the Secretary of Education's written notice to resolve the audit findings, then the Secretary of Education is authorized to adjust payments to the community college to collect any amounts due based upon the findings contained in the audit report that was issued to the college by the commissioner.(4) The department shall deduct any amounts due the Commonwealth as a result of audit findings that are resolved under this subsection from any future payment due to the community college from the Commonwealth. The Secretary of Education is authorized to approve a payment schedule in cases where immediate repayment of the full amount due the Commonwealth would jeopardize the ability of the community college to continue operations.(5) Resolution authority provided to the Secretary of Education in this subsection shall be limited to disallowed cost findings relating to policy and/or administrative practices. The resolution authority shall not be used for audit findings in which the audited community college data and documentation is in error, where a violation of applicable law or regulation is found or where criminal violations are suspected by the Commonwealth auditors and brought to the Secretary of Education's attention in writing. Notwithstanding the limitations of this subsection, until June 30, 1995, the Secretary of Education is authorized to resolve audit findings involving disallowed costs for fiscal years prior to and including 1992-1993 when such disallowed costs result from violation of regulations.(6) The department, through the Secretary of Education, is authorized to issue guidelines for the operation of the community college educational and financial programs. The department shall amend these guidelines on an annual basis to reflect the department's position on issues that require resolution under this subsection.(7) The provisions of subsection (d) are repealed insofar as they are inconsistent with the provisions of this subsection.(k.1)(1) By January 1, 2007, and January 1 of each year thereafter, a community college shall submit to the department an audited financial statement for the immediately preceding fiscal year. The audited financial statement shall be consistent with the generally accepted accounting principles prescribed by the National Association of College and University Business Officers or its successor, by the American Institute of Certified Public Accountants or its successor or by any other recognized authoritative body and consistent with the financial reporting policies and standards promulgated by Federal Government and State government which apply to community colleges, provided that an audited financial statement shall not be acceptable if the audit is conducted by an employe or member of the board of trustees of the community college or by an organization or firm associated with any employe or member of the board of trustees of the community college. The Department of Education may withhold funds appropriated to community colleges as necessary to ensure that audit reports are submitted in the prescribed fashion.(2) The audited financial statement required under clause (1) shall include:(i) results of the tests of the community college's accounting records and other procedures that are considered necessary to enable the independent certified public accountant to express an opinion as to whether the community college's financial statements are fairly presented, in all material respects, consistent with the accounting principles set forth in clause (1);(ii) a schedule of operating expenses that presents all operating expenses pertaining to the community college's educational program; and(iii) a verification of equivalent full-time students enrolled in the community college in each of the following categories: credit, noncredit and each economic development stipend category, during the fiscal year for which the audited financial statement is presented.(3) The department shall review the audited financial statement of a community college to determine whether the State funds allocated to the community college have been expended in accordance with the accounting principles set forth in clause (1). The department shall have ninety (90) days from the receipt of an audited financial statement to review the audited financial statement and notify the community college of any material failure to meet the requirements of this subsection.(4) A community college that receives notice from the department under clause (3) shall have ninety (90) days from the receipt of such notice to submit a corrective action plan to the department.(5) The department shall approve, reject or alter the corrective action plan within thirty (30) days of submission. After the community college receives written notice of approval of the corrective action plan or agrees in writing to the department's alterations of the corrective action plan, the plan shall be implemented and binding on the community college. Implementation of the approved or agreed-upon corrective action plan shall be verified by an audit conducted by the department no later than the end of the fiscal year following the fiscal year during which the plan is implemented. If no agreed-upon corrective action plan is in place within one year after the date of the department's written notice under clause (4) or if the agreed-upon corrective action plan has not been implemented within one year after the date of the department's written notice under clause (4), then the department shall adjust payments to the community college to collect any amounts due based upon the findings contained in the audit report.(6) The State Board of Education shall promulgate final-omitted regulations pursuant to the act of June 25, 1982 (P.L. 633, No. 181), known as the "Regulatory Review Act," as necessary to implement this subsection.(l) For the fiscal year 1992-1993, if insufficient funds are appropriated to make Commonwealth payments pursuant to this section, such payments shall be made on a pro rata basis.Amended by P.L. TBD 2023 No. 33,§ 25, eff. 12/13/2023.Amended by P.L. TBD 2022 No. 55, § 31, eff. 7/8/2022.Amended by P.L. TBD 2021 No. 26, § 4, eff. 6/30/2021.Amended by P.L. TBD 2020 No. 30, § 12, eff. 6/5/2020.Amended by P.L. TBD 2019 No. 76, § 49, eff. 12/30/2019.Amended by P.L. TBD 2019 No. 16, § 9, eff. 7/1/2019.Amended by P.L. TBD 2018 No. 39, § 12, eff. 7/1/2018.Amended by P.L. TBD 2017 No. 55, § 11, eff. 11/6/2017.Amended by P.L. 716 2016 No. 86, § 10, eff. 7/13/2016.Amended by P.L. 986 2014 No. 108, § 1, eff. 8/31/2014.Amended by P.L. 408 2013 No. 59, § 7, eff. 7/9/2013.Amended by P.L. 684 2012 No. 82, § 23, eff. 7/1/2012.1949, March 10, P.L. 30, No. 14, art. XIX-A, § 1913-A, added 1985 , July 1, P.L. 103, No. 31, § 1, imd. effective. Amended 1988 , Oct. 20, P.L. 827, No. 110, § 6, retroactive effective July 1, 1988; 1993, June 7, P.L. 49, No. 16, § 12; 1995, June 30, P.L. 220, No. 26, § 9, imd. effective; 1996, July 11, P.L. 633, No. 107, § 5, imd. effective; 1997, June 25, P.L. 297, No. 30, § 10, effective July 1, 1997; 1998 , April 27, P.L. 270, No. 46, § 11, effective July 1, 1998; 1999, June 26, P.L. 394, No. 36, § 8, effective July 1, 1999; 2000, May 10, P.L. 44, No. 16, § 11, effective July 1, 2000; 2001, June 22, P.L. 530, No. 35, § 22, effective July 1, 2001; 2005 , July 13, P.L. 226, No. 46, § 15, imd. effective; 2008, July 9, P.L. 846, No. 61, § 18, retroactive effective July 1, 2008; 2011, June 30, P.L. 112, No. 24, § 30, effective July 1, 2011.