Common coding and reporting issues observed in 2010–2011 unaudited actuals data submissions
| Issue | Correct Procedure | Reference |
|---|---|---|
Balances remaining in resource codes subject to categorical and ending balance flexibility |
Transfer remaining balances by 2011–12 year-end. Since Object 8997 is closed beginning 2010–11, transfers may be done using Object 8990. |
California Department of Education (CDE) letter dated April 17, 2009, “Fiscal Issues Relating to Budget Reductions and Flexibility Provisions” |
Object 5100, Subagreements for Services, not used |
Object 5100 should be used to record payments to a third party service provider that conducts all or part of an instructional or support activity for which the local educational agency (LEA) is responsible. The first $25,000 may be recorded using Object 5800. Federal cost principles require that subagreements be excluded from the indirect cost rate calculation and from eligible program costs on which indirect costs are charged. |
CDE letter dated December 15, 2006, “Indirect Cost and Accounting Changes Effective Beginning 2007–08.” California School Accounting Manual (CSAM) Procedure 330, Object Classification CSAM Procedure 915, Indirect Cost Rate |
Interfund transfers not recorded correctly |
1) Interfund transfers are recorded using two different object codes, one for the interfund transfer out (761X) and one for the interfund transfer in (891X). Example: $5,000 permanent transfer from the general fund to the Cafeteria Fund to subsidize food service operations (cash entries assumed) Incorrect Correct 2) Temporary borrowing between funds is recorded as due to/from other funds, not an interfund transfer. Note that these entries do not have an effect on fund balance, but only affect cash flow. Example: $10,000 is borrowed from the Cafeteria Fund to cover a temporary deficit in the general fund Debit Fund 01 Object 9110 $10,000 Debit Fund 13 Object 9310 $10,000 When the Cafeteria Fund is repaid from the general fund: Debit Fund 01 Object 9610 $10,000 Debit Fund 13 Object 9110 $10,000 |
CSAM Procedure 330, Object Classification |
Incorrect use of abatements |
Receipts should be recorded as abatements of expenditures only if the receipt cancels a part or the whole of an identifiable expenditure in the current fiscal year. Otherwise, the receipt should be recorded as revenue. A good example is e-rate subsidies. Also, amounts received from organizations such as the PTA or parent booster club should not be abated against the expenditure to which that receipt applies, but rather reported as local revenue. |
CSAM Procedure 560, Abatement of Expenditures |
Abatements “plugged” or “buried” in one goal, function, or object when costs were incurred among multiple goals, functions, or objects. Example: Object 3702 positive overall, but a huge negative within one goal and function. |
Receipts that represent cancellations of expenditures are accounted for by crediting the original expenditure accounts (or the related contra accounts). The accounts credited must be the entire original accounts including the goal, function and object. Once again, a good example is e-rate subsidies. |
CSAM |
Postemployment benefits other than pensions (OPEB) expenditures not distributed per guidance in CSAM (see also under Indirect Costs, below) |
OPEB expenditures charged to objects 3701 and 3702 are allocated among all activities in proportion to total salaries or full-time equivalents (FTEs) in all activities. |
CSAM |
Special Education Local Plan Area (SELPA) Administrative Unit (AU) activities not reported correctly, e.g., pass-through accounting entries are incorrect, or not reported at all. |
The receipt and distribution of Special Education funding by the SELPA AU are recorded in the appropriate Special Education Resource in the General Fund using the appropriate pass-through accounting transactions. NOTE: Beginning 2011–12, SELPA AU pass-through activities are recorded in Fund 10, |
CSAM |
Audit adjustments/ restatements using objects 9793/9795 recorded in resource codes that are subject to deferred revenue, for which no beginning balances exist. |
Adjustments should be made to the appropriate asset, liability, revenue and/or expenditure accounts in the appropriate resource code. Example: LEA under-accrues a liability for Title I (Rs 3010), resulting in an audit adjustment, as follows: Dr Expenditure This entry necessitates an offsetting increase to revenue, with either a decrease to deferred revenue or increase to accounts receivable: Dr Deferred Revenue/Accounts Receivable |
N/A |
PCRAF - Unrealistic or incorrect allocation factors for undistributed support costs Example: FTE entered for only one instructional program, resulting in allocation of all undistributed costs to that program; or an implausibly low number of FTE per program, e.g. one FTE for regular education; or dollar amounts entered instead of factors |
To assure that costs are allocated on a consistent and standard basis, allocation factors should reflect real counts of the teacher FTEs, classroom units (square footage utilized), or pupils transported in all instructional programs operated by the LEA. |
CSAM Procedure 910, Program Cost Accounting |
PCRAF - Allocation factors entered for programs for which there are no direct costs |
Undistributed support costs should normally only be allocated to programs in which direct charged costs are incurred. The PCR/PCRAF should not be used to allocate costs incurred on behalf of other entities, such as charter schools, in lieu of recording them correctly to Goal 7110 in the GL. |
CSAM |
TRC explanations that are meaningless or otherwise unhelpful, or repetitive use of the same explanation for exceptions (e.g., “will be corrected at 1st Interim”) to which the explanation clearly does not apply. |
If the data is wrong, the LEA should correct the data before submitting it. If the LEA believes the data is right, the LEA should provide a meaningful explanation of why. Revenue and expenditure accounts cannot be corrected in the coming year because revenue and expenditure accounts are closed out to fund balance at the end of each year. If the data is wrong, correct the data before submitting it. |
SACS User Guide and TRC instructions |
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Indirect cost calculation Indirect cost pool expenditures recorded incorrectly, resulting in an inappropriate indirect cost rate: 1) Administrative costs charged entirely to a general administration function when other functions benefit from those expenditures. 2) Audit costs not charged to the appropriate function. 3) Abnormal or mass separation costs not excluded from the indirect cost pool. 4) OPEB costs charged entirely to a general administration function. 5) Insurance, legal and communications costs charged entirely to a general administrative function. 6) Incorrect use of Function 7700, Centralized Data Processing, for costs other than those of a general administrative nature |
1) Especially for small school districts and charter schools, administrative costs should be allocated between general administration, board and superintendent (functions 71XX), school administration (Function 2700), and/or other instructional support functions (functions 2XXX), as necessary. For salaries, standard distributions may be used in lieu of time documentation. 2) Audit costs should be charged to either Function 7190 or 7191, depending on whether LEA is subject to federal Single Audit provisions. 3) Abnormal or mass separation costs charged to a general administration function should be excluded by entering the appropriate amount in Part II, Line of the Indirect Cost Rate Worksheet, Form ICR. 4) OPEB expenditures are allocated among all activities in proportion to total salaries or FTEs in all activities. 5) Bus and food service vehicle insurance should be charged to functions 3600 and 3700, respectively. Pupil insurance should be charged to Function 1000. Legal costs should be recorded primarily to Function 7100, unless the costs are associated specifically with the business office, purchasing or personnel matters. Settlements should be charged to Function 7100. Communications costs such as telephone, cell phone, 2-way radio, and internet service should be charged to the functions in which those services are used. 6) Costs on behalf of instructional programs should be reported in Function 1000, Instruction or Function 2420, Instructional Library, Media and Technology. Costs should be allocated between agency-wide and instructional functions as necessary. If all data processing costs are initially accumulated in Function 7700, instructional costs should be reclassified to the appropriate function(s) using Object 5710. |
CSAM CSAM CSAM CSAM CSAM CDE letter dated 12/15/2006, “Indirect Cost and Accounting Changes Effective Beginning 2007–08.” |
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Charter school reporting/coding: 1) Salaries reported without corresponding benefits. 2) Salaries and corresponding benefits not recorded to the same resource, goal, and/or function. 3) Management company fees lump-sum charged to one function, such as 7200. 4) Depreciation expense lump-sum charged to Function 7200 (Fund 62) 5) Indirect cost pool expenditures coded incorrectly; misconception that indirect cost rate does not apply. |
1) Employee benefits should be recorded separately from the associated salary and in one or more appropriate benefit object codes. 2) Salary and benefits for the same employee should normally be recorded to the same resource, goal, and function. 3) Fees paid for activities other than school or general administration should be charged to the appropriate function(s), such as instructional administration (Function 2100) or pupil services (functions 3000 – 3999). 4) Depreciation expense should be charged to the functions that benefit from the asset for which depreciation is charged. For example, depreciation on a school building that consists of regular education classrooms should be charged to Goal 1110, Function 1000. 5) See pages 4 and 5 for common indirect cost pool coding errors. Indirect cost rates are calculated for charter schools that report separately using SACS, even if an indirect cost rate is not used. |
CSAM Procedure 325, Function Classification CSAM Procedure 330, Object Classification CSAM Procedure 910, Program Cost Accounting CSAM Procedure 915, Indirect Cost Rate |
