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NDE seeks contracts analyst, financial software and larger reserves as indirect rates rise
Summary
The Department of Education requested a senior contracts analyst, continued financial software funding and an increase in operating reserves while explaining that federal cognizant agency rules and pandemic-era shifts raised the department's indirect cost rate from about 13% to 24.5%.
At the subcommittee hearing the department asked for a Management Analyst 3 to give program directors technical contracting support, continued funding for a financial management platform (procured with ARP ESSER funds) and to restore various IT and safety operating costs now that ESSER funding is expiring.
Deputy Superintendent Megan Peterson described the proposed contracts analyst as a higher‑level technical resource to help program staff decide on the appropriate procurement vehicle (for example, an interlocal agreement, memorandum of understanding or RFP) and to guide scope‑of‑work development. Peterson said many program staff come from school districts and lack familiarity with state procurement procedures.
The department also sought ongoing funding for a financial management platform used to manage People Centered Funding Plan payments and avoid error‑prone Excel processes. Peterson said the department procured the system with ARP ESSER dollars and requested $15,000 in each year of the biennium to continue it.
Lawmakers questioned how indirect cost allocation is calculated and how increases affect other accounts. Peterson said the U.S. Department of Education is the federal cognizant agency that sets the rate: "The US Department of Education is the federal cognizant agency in that case." Fiscal director Celeste Donald said the department increased operating reserve targets from 180 days to 365 days because salary increases and growing operating costs make having a year's worth of available cash necessary to continue operations if revenue timing changes: "it was determined that having a year's worth of available cash to balance forward in the next year to continue to operate because as our education landscape is changing, there is no guarantee that we could continue to collect what was needed in that 180 days to for us to continue to operate as an office."
The department also described replacements for servers, licenses for remote access tools, cybersecurity training and first aid and life‑safety supplies that lapsed during the pandemic. The subcommittee asked for more detail on how increased indirect rates and reserve targets would be reflected across fee‑funded and general‑fund accounts; the department said it is balancing those adjustments on an account‑by‑account basis and will provide additional information to fiscal staff.
