Meeting held at the California Department of Education (CDE), Sacramento
Meeting Agenda
Announcements
- 2012–13 indirect cost rates
- Statewide Adult Education rate discontinued
Accounting Issues
- Proposal to open Object 9650 to Resource 5310 for reporting prepaid lunches
- Resource 5640, Medi-Cal Billing Option – clarification on funding source as a result of the Department of Health Care Service (DHCS) March 30, 2012 letter
- Reminder to use Adult Education goals for Adult Education activities reported in the general fund
- New and proposed Governmental Accounting Standards Board (GASB) pronouncements: implications for local educational agency (LEA) financial reporting – update
- GASB 65 – Items Previously Reported as Assets and Liabilities (Attachment A)
- GASB 65 – Items Previously Reported as Assets and Liabilities (Attachment A)
- GASB 54 – reminders for closing 2011–12
- Classification of reserves for economic uncertainties and similar amounts
- Use of Fund 11 and Fund 14
- Accounting procedure for closing out Fund 09 for separately reported charter schools (Attachment B)
SACS Software Issues
- SACS2012 software
- Budget software release
- Proposed changes for SACS2012ALL release (Attachment C)
Other Issues
-
Due date of Special Education Maintenance of Effort (SEMOE) reports
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Next meeting
Meeting Minutes
Announcements
-
2012–13 indirect cost rates
The 2012–13 indirect cost rates [http://www.cde.ca.gov/fg/ac/ic/] have been posted.
- Statewide Adult Education rate discontinued
The CDE has discontinued the statewide average indirect cost rate for Adult Education programs. Since state Adult Education funding was subject to categorical program flexibility per Education Code Section 42605, it was determined that the statewide indirect cost rate prescribed for the Adult Education Fund pursuant to Education Code Section 52616.4(a)(3) no longer applies.
- Statewide Adult Education rate discontinued
Accounting Issues
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Proposal to open Object 9650 to Resource 5310 for reporting prepaid lunches
The CDE is proposing to open Object 9650, Deferred Revenue, to Resource 5310, Child Nutrition: School Programs. The CDE has received previous requests to open this code combination, but had not opened it because normally both deferred revenue and ending balance object codes are not opened for a resource code. This is because LEAs may not apply the appropriate revenue recognition principle to the carryover funding.
After recent internal discussions, the CDE recognizes that prepaid student lunches may comprise a material amount of funds accounted for in Resource 5310 and has determined that it would be beneficial to allow LEAs to report prepaid lunch receipts correctly. The CDE would make the code combination effective 2011–12.
Participants had no additional feedback regarding CDE opening this code combination.
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Resource 5640, Medi-Cal Billing Option – clarification on funding source as a result of the Department of Health Care Service (DHCS) March 30, 2012 letter
The DHCS issued a Policy and Procedure letter, dated March 30, 2012, to LEAs addressing changes to SACS Resource 5640, Medi-Cal Billing Option. The letter, in part, states that “SACS Resource Code 5640 revenues will no longer be considered federal income for purposes of the LEA Medi-Cal Billing Option Program.” The CDE wanted to clarify this language as it might be interpreted as meaning the funding source is no longer federal. The funding source in fact continues to be federal, so LEAs should continue to use Resource 5640, Medi-Cal Billing Option, to record associated revenues and expenditures, using Object 8290 to identify revenue received.
Based on previous conversations between Financial Accountability and Information Services (FAIS) staff and CDE and LEA program staff, there had been some uncertainty whether expenditures associated with this funding could be reported on the Cost and Reimbursement Comparison Schedule (CRCS) because the SACS coding was interpreted by program staff as meaning the funding was a federal grant tied to a restricted federal program, thus not allowed to be claimed. However, after FAIS staff explained the purpose of the SACS resource code and the need for LEAs to report the associated revenues and expenditures using this coding, the DHCS issued the letter to clarify that expenditures made with funding reported using Resource 5640 should not be considered a federal grant or federal funds that can be used to match another federal program, and thus can be included on the CRCS.
There was some discussion among participants as to whether an unrestricted resource code should be assigned to this program, similar to the federal Medi-Cal Administrative Activities (MAA) program. However, it was noted that unlike the MAA program, the Medi-Cal Billing Option funding must be used for specific purposes per California regulations and should be accounted for using a restricted resource to reflect restrictions on the use of funds.
The DHCS’s letter
[http://www.dhcs.ca.gov/formsandpubs/Pages/2012PolicyandProcedureLetters.aspx] can be accessed on the DHCS Website. -
Reminder to use Adult Education goals for Adult Education activities reported in the General Fund
Participants were reminded that although state Adult Education funding has been included in categorical flexibility and thus is no longer required to be used for Adult Education activities, if LEAs continue to provide Adult services then the Adult Education goals (4110, 4610, 4620, and 4630) should continue to be used, even if those activities are reported in the general fund.
If LEAs do not charge support costs associated with Adult Education services to a specific Adult Education goal, e.g., costs that are not required to be recorded with a specific goal such as expenditures coded to the 2000 and 3000 series of functions, then allocation factors should be provided for the Adult Education goals on the program cost allocation factors report (SACS software Form PCRAF) so that support costs can be allocated to the Adult Education goal(s) via the program cost report (SACS software Form PCR). Note that LEAs should either allocate all support costs via the program cost report or direct charge all support cost using specific goals in order for the calculation of allocated support costs in the program cost report to be as accurate as possible.
It was also discussed that it is important for the CDE to be able to capture Adult Education expenditures made with state and local funds because the CDE is required to calculate state-level maintenance of effort for Adult Education, as it receives federal Adult Education funding. In addition, the CDE Adult Education program office uses statewide Adult Education costs for analysis purposes.
- New and proposed Governmental Accounting Standards Board (GASB) pronouncements: implications for local educational agency (LEA) financial reporting – update
- GASB 65 – Items Previously Reported as Assets and Liabilities
The CDE provided an updated handout (Attachment A) [http://www.cde.ca.gov/fg/ac/ac/sacsminutes051512a.asp] regarding the newly issued GASB 65. The CDE is in the process of interpreting the provisions of GASB 65 and will issue guidance in the future. The CDE pointed out that the implementation date of this new standard was changed from 2012–13 to 2013–14.
- GASB 65 – Items Previously Reported as Assets and Liabilities
- GASB 54 – reminders for closing 2011–12
- Classification of reserves for economic uncertainties and similar amounts
The CDE noted during 2012–13 COE budget reviews that in some cases amounts that should be reported as reserves for economic uncertainties within unassigned fund balance, Object 9789, were reported as assigned fund balance, Object 9780.
The CDE wants to remind LEAs that, per the guidance in the January 7, 2011 letter, “New Requirements for Reporting Fund Balance in Governmental Funds,” reserve amounts above and beyond the reserve amount recommended by the Criteria and Standards, e.g., amounts set aside for cash flow purposes or additional reserve amounts pursuant to local policy, should be reported using Object 9789. GASB 54 is clear that amounts considered reserves for economic uncertainties are classified as either committed fund balance (if they meet the requirements relating to that classification) or unassigned fund balance, but never assigned fund balance.
- Use of Fund 11 and Fund 14
The CDE reiterated that in order for LEAs to continue to use Fund 11 and Fund 14, LEAs should commit an ongoing revenue source to the purposes of those funds. The committed amount is required to be reported as revenue of the fund, not an interfund transfer from, for example, the general fund. LEAs may also assign amounts to the purposes of those funds as long as a substantial portion of the inflows into the funds is committed. The assigned amounts may be recorded as an interfund transfer from the general fund.
- Classification of reserves for economic uncertainties and similar amounts
-
Accounting procedure for closing out Fund 09 for separately reported charter schools
Attachment B [http://www.cde.ca.gov/fg/ac/ac/sacsminutes051512b.asp] provides example accounting entries to assist separately reporting charter schools that will need to convert from Fund 09 to Fund 01 (or Fund 62) effective 2012–13.
The CDE noted that the accounting entries provided were only a sampling of the entries that charter schools may need to make. The CDE stressed that by the end of the 2012–13 reporting period, all Fund 09 accounts, with the exception of objects 9791, 9793, and 9795, must have a zero balance. A fatal SACS software technical review check has been established to ensure this.
SACS Software Issues
- SACS2012 software
- Budget software release
The CDE reminded participants that the SACS2012 budget software had been released.
- Proposed changes for SACS2012ALL release
Attachment C [http://www.cde.ca.gov/fg/ac/ac/sacsminutes051512c.asp] was distributed, providing an updated list of proposed changes for the SACS2012ALL software release. There were no participant comments regarding the proposed changes.
- Budget software release
Other Issues
- Due date of Special Education Maintenance of Effort (SEMOE) reports
The SEMOE workgroup recommends that the CDE synchronize the due dates of the two MOE reports (Budget to Actual and Actual to Actual, which are contained in the SACS software to take advantage of SACS) and the new “Table 8” (a separate report that contains additional Special Education information related to MOE), to match the SACS software reporting timelines (due to the CDE October 15). This is to resolve discrepancies between the reports and a related compliance finding.
Preliminary feedback from the group was that they generally agreed that the due dates for all these reports should be in sync. However, there was concern that an October 15 due date might not give county offices of education enough time to review and verify the accuracy of school district fiscal data before it would be provided to special education local plan area administrative units (SELPA AUs), who in turn would need sufficient time to receive data from member LEAs, compile and review it, and submit it to the CDE. There was a suggestion to make the due date November 15 instead.
Also, any changes to due dates for SEMOE should be communicated well in advance to allow sufficient planning time to adjust for the change.
Participants were asked to check with Special Education local plan areas (SELPAs) and districts on whether October 15, or some other, synchronized date would be workable, and provide feedback via e-mail to sacsinfo@cde.ca.gov. The CDE will give careful consideration to that feedback before committing to a change.
Note: Subsequent to the meeting, the CDE Special Education Division provided additional information that the report date chosen will influence when the CDE can pay Individuals with Disabilities Education Act (IDEA) grant awards.
- Next meeting
The next SACS Forum meeting will be held in mid to late October or early November. Once the date is known SACS Forum participants will be notified via e-mail.
