School Business Services


Limitation of Administrative Costs

School District's budgeted administrative expenditures can not increase more than 5% over their prior year actual administrative expenditures, per Section 17-1.5 (Limitation of Administration Costs) of the School Code. The following functions are included under administrative expenditures:

2320   Executive Administration Services
2330   Special Area Administration Services
2490   Other Support Services - School Administration
2510   Direction of Business Support Services
2570   Internal Services
2610   Direction of Central Support Services

"Administrative expenditures" do not include early retirement or other pension system obligations required by law.

The Limitation of Administrative Costs Worksheet must be filed with the State Board of Education by November 15 of each fiscal year and report the Actual Administrative Expenditures for the previous fiscal year and the budgeted or proposed Administrative Expenditures for the current fiscal year.

School districts with administrative expenditures per pupil in the 25th percentile and below (the fourth quartile) for all districts of the same type (elementary, secondary [high school], or unit) may waive the limitation imposed under Section 17-1.5 for any year following a public hearing. Waiver of this limitation requires the affirmative vote of at least two-thirds of the members of the school board for each applicable year. Any district waiving the limitation shall notify the State Board within 45 days of such action. Adoption of the waiver limitation does not relieve a district of the requirement to file the one-page report discussed above by November 15 of the fiscal year.

If a school district that is ineligible to waive the limitation on administrative expenditures by board action exceeds the limitation imposed by Section 17-1.5 solely because of circumstances beyond the control of the district and the district has exhausted all available and reasonable remedies to comply with the limitation, the district may request a waiver pursuant to Section 2-3.25g of the School Code. If approved, this waiver shall only apply to the specific school year for which the request is made. For more information on the waiver process, districts may contact the Rules and Waivers Division at ISBE at 217.782.5270 or view the detailed information at the above link.

If the report and information required by Section 17-1.5 are not submitted on time or are determined to be incomplete or inaccurate, the district shall be notified in writing of the reporting deficiencies. The school district shall, within 60 calendar days of the notice, address the deficiencies identified. If the district fails to provide adequate assurance or to undertake the necessary corrective actions, the State Superintendent may impose progressive sanctions against the district, which may culminate in withholding all subsequent payments of General State Aid until the assurance is provided or the corrective actions are taken.

House Bill 452, Public Act 90-548, added Section 17-1.5 to the School Code effective January 1, 1998.  Section 17-1.5 was amended by House Bill 1640, Public Act 90-0653, effective July 1998.  This legislation establishes limitations on the growth of administrative expenditures in all school districts having a population of less than 500,000. The City of Chicago School District 299 is the only district exempted from the provisions of this Section.  School District 299, however, has been subject to a limitation on its administrative expenditures since the 1989-90 school year under the provisions of Section 34-43.1 of the School Code.

If you have any questions, please contact Michelle Heninger, 217-785-8779.

In accordance with Section 17-1.5 of the School Code (Limitation of Administrative Costs) the State Board of Education must publish each year a list of the school districts that violate the limitation and a list of the school districts that waive the limitation by board action.

FY06 Actual Expenditures/FY07 Budgeted Expenditures
FY05 Actual Expenditures/FY06 Budgeted Expenditures
FY04 Actual Expenditures/FY05 Budgeted Expenditures
FY03 Actual Expenditures/FY04 Budgeted Expenditures
FY02 Actual Expenditures/FY03 Budgeted Expenditures
FY01 Actual Expenditures/FY02 Budgeted Expenditures
FY00 Actual Expenditures/FY01 Budgeted Expenditures
FY99 Actual Expenditures/FY00 Budgeted Expenditures
FY98 Actual Expenditures/FY99 Budgeted Expenditures