With as many as 29 Missouri school districts and their affiliated career centers facing the threat of higher costs due to confusing, unnecessary federal accounting requirements, U.S. Rep. Blaine Luetkemeyer (MO-9) met face-to-face this week with U.S. Education Secretary Arne Duncan and called for a “complete fix” to the requirement that would compel entire school districts to convert their entire accounting systems because of an affiliated career center.

Joining Luetkemeyer at the meeting were U.S. Reps. Jo Ann Emerson, Billy Long, Vicky Hartzler and Emanuel Cleaver.

Since 1997, a federal regulation has stipulated that postsecondary education institutions applying for Title IV funds must submit annual financial statements to the Department of Education prepared on an accrual basis, a method of accounting. For nearly 15 years, the Department of Education has granted an extension to Missouri career centers to operate under their current reporting system -- cash accounting -- because Missouri allows school districts to adopt any comprehensive basis of accounting. Missouri is unique from many states in that many of its career centers are part of local school districts. 

“This federal accounting requirement conflicts with existing state standards.  The Department has been granting an extension for Missouri schools for almost 15 years.  By granting these extensions over the years, the Department admits that this is not a necessary financial reporting requirement,” Luetkemeyer said. “I appreciate Secretary Duncan’s taking the time to meet with us on this issue, which we believe saddles Missouri schools with more uncertainty at a time when they are already strapped for cash.  We conveyed to the Secretary that we believe many school districts, particularly in rural areas, will choose to close their adult career center programs rather than changing the entire district’s accounting system to comply with this one federal regulation.”

During the meeting with Duncan, it was noted that the cash basis of accounting has traditionally been used in federal budgeting, so it should be “comprehensive enough” to be used for Missouri school districts. In fact, a Government Accounting Office report stated that the cash basis of accounting is a “widely used and accepted measure of the government’s effect on current financial markets.” 

Since Luetkemeyer and his colleagues have been in discussions with the Department on this issue, two schools have decided to no longer offer adult programs and one school district has decided not to apply for Title IV funds, which means students wouldn’t have the opportunity to receive federal financial aid. Luetkemeyer is concerned that this trend will continue and could, in particular, immensely affect adult practical nursing programs.  Each year, career centers in Missouri turn out an average of 500 LPNs.