Common errors observed in 2009-10 unaudited actuals data submissions
| Error | Correct procedure | Reference |
|---|---|---|
Balances remaining in resource codes subject to categorical and ending balance flexibility |
Transfer remaining balances by 2010–11 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 |
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. |
California School Accounting Manual (CSAM) |
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 |
| Using adjusting journal entries to reclassify or correct prior year transactions between programs and/or funds | 1) For program expenditures incurred in a prior fiscal year that are reimbursed by another program in the current fiscal year, record a contribution from the reimbursing program to the program being reimbursed. Example: in Year 1, Resource 8150 funds are used to pay for emergency repair costs, and in Year 2 the local educational agency (LEA) is reimbursed for those costs in the Emergency Repair program, Resource 6225. In Resource 8150: In Resource 6225: |
CSAM |
Postemployment benefits other than pensions (OPEB) expenditures lump-sum charged to general administration or any other single activity (function) |
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 reported in other than the General Fund and/or appropriate Special Education Resource, 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. |
CSAM |
Compensated absences payable reported in governmental funds |
LEAs should recognize compensated absences in governmental funds only to the extent that amounts have actually become due and payable as of the end of the fiscal year because of relevant events such as employee resignations and retirements. Note that the long-term liability for compensated absences is reported on the government-wide Statement of Net Assets. The current portion may be estimated for presentation on that statement, but it is not recognized in the governmental funds. |
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. 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 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 |
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 |
PCRAF - Allocation factors entered for programs in which there are no direct costs charged. |
Undistributed support costs should 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 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. |
SACS User Guide and TRC instructions |
TRC explanations that exceptions involving revenues or expenditures “will be corrected in the coming year.” |
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 |
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.
4) OPEB costs charged entirely to a general administration function. 5) Insurance, legal and communications costs charged entirely to a general administrative function.
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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 CDE letter dated 12/15/2006, “Indirect Cost and Accounting Changes Effective Beginning 2007–08.” |
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 2700 or 7200. 4) Indirect cost pool expenditures coded incorrectly; misconception that indirect cost rate does not apply. |
2) Salary and benefits for the same employee should normally be recorded to the same resource, goal, and function.
4) See preceding section 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 CSAM CSAM CSAM |
