Submitted by admin on January 26, 2010 - 9:58pm
in
Minnesota
Holdback have increased to 40% for FY 2012.
Meet uncertainty with a plan.
We can help your school.

Minnesota has completely shifted it's funding strategy, increasing the holdback to 40% for FY12 and paying schools the 60% balance over 16 payments, July through February. March, April, May and June ... there will be no payments made. The 40% holdback will be paid at 75% on July 30 and the remaining 25% the end of October. With the state still facing large shortfalls in the next biennium, there is no sign of reprieve for education. Click through the tabs below to see how holdbacks will impact your school.

FY12 Minnesota Holdback

• In months July through February, a school will receive 60% of it's Annual Revenue across 16 payments
• Schools will receive NO payments in the months of March, April, May or June
• The sequential 40% Holdback will be paid in two payments: 75% on July 30th and 25% on October 30th in the following Fiscal Year

Our Sample School will have cash flow issues:
Situation:

• The school will face a $960,000 cash flow shortfall March through June due to holdbacks
• Annualized Revenue = $2.4 million ($10,000/ADM) with 200 ADM
• 40% Holdback = $960,000

Challenge:

• The school will receive 60% of its annual revenue in 16 payments, July through February ($1,440,000.)
• The Schools needs to continue to operate and pay it's bills March through June while receiving NO payments from MDE.
• The School needs a plan.

The Situation:
The school will face a $960,000 cash flow shortfall due to holdbacks