Meeting Agenda
Announcements
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California Association of School Business Officials (CASBO) SACS Basic and Advanced Concept Workshops
Accounting Issues
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Special Education mental health funding – new Resource 6512
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Use of Object 9290, Due from Grantor Governments
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Commodities – proposal for new object code
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Adult Education Fund and Deferred Maintenance Fund – letter and follow-up questions
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New and proposed Governmental Accounting Standards Board (GASB) pronouncements – implications for local educational agency (LEA) financial reporting
- New pronouncements – GASB 61 and GASB 63
- Pending pronouncements
- Accounting and financial reporting for pensions
- Reporting items previously recognized as assets and liabilities
SACS Software Issues
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Windows 7 workaround available
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SACS2012 software – discussion of proposed changes
Other Issues
- California School Accounting Manual (CSAM) 2011
- Next Meeting
Meeting Minutes
Announcements
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CASBO SACS Basic and Advanced Concept Workshops
CASBO SACS workshops have been scheduled for the following dates and locations:
- SACS:Basic Concepts
November 2 - San Bernardino County Superintendent of Schools, Rancho Cucamonga (Ontario area) Rescheduled to March 21, 2012
November 16 - Twin Rivers Unified School District, McClellan (Sacramento area)
November 30 - Kern County Superintendent of Schools, Bakersfield -
SACS:Advanced Concepts
November 3 - San Bernardino County Superintendent of Schools, Rancho Cucamonga (Ontario area) Rescheduled to March 22, 2012
November 17-Twin Rivers Unified School District, McClellan (Sacramento area)
December 1 -Kern County Superintendent of Schools, Bakersfield
- SACS:Basic Concepts
Accounting Issues
- Special Education mental health funding – new Resource 6512
The California Department of Education (CDE) established Resource 6512 to allow LEAs to record state Special Education funding that has been specifically identified for educationally-related mental health services pursuant to Assembly Bill 114 (Chapter 43, Statutes of 2011) and the 2011 Budget Act. Funding that should be reported in Resource 6512 includes:
- $31 million – funding allocated in previous years and formerly reported under Resource 6500
- $218 million – new funding resulting from the shift in responsibility for educationally-related mental health services from mental health agencies to LEAs
- $3 million – funding allocated to administer an extraordinary cost pool associated with educationally-related mental health services
Resource 6512 has been opened to funds 01, 09, 10, and 62.
There was a question regarding the appropriate accounting for educationally-related mental health services payments the special education local plan area (SELPA) administrative unit (AU) makes on behalf of the member LEAs, and for which the SELPA AU is subsequently reimbursed from the member LEAs. Following is an example of the recommended accounting:
- The county office of education (COE pays for contracted mental health services on behalf of member LEAs.
Fund 01, Resource 9010, Goal 7110, Function 1xxx or 3xxx (depending on services provided), Object 5800/5100*
- Member LEAs reimburse the COE for contracted mental health expenditures using 2011–12 state mental health funding.
- Member LEA entry:
Fund 01, Resource 6512, Goal 5XXX (depending on the population of special education students served), Function1XXX or 3XXX (depending on services provided), Object 5800/5100*
- COE entry:
Fund 01, Resource 9010, Goal 0000, Function 0000, Object 8677
*The first $25,000 may be charged to Object 5800 and the remainder must be charged to Object 5100. Alternatively, the entire amount is charged to Object 5100.
The rational for this coding is that school districts are responsible for providing services, but "contracting" with the COE to provide the services and the COE is "contracting" with service provider for ultimate provision of eductionally-related mental health services.
- Member LEA entry:
- Use of Object 9290, Due from Grantor Governments
The CDE noted that the majority of LEA receivables are being reported in Object 9200, Accounts Receivable, rather than Object 9290, Due from Grantor Governments. The CDE expects that the bulk of LEA receivables are amounts due from state, federal, or other local governmental entities and not private entities, and therefore should be recorded to Object 9290.
Several participants indicated that their financial systems automatically generate an accounts receivable entry that does not differentiate between amounts due from governmental entities versus amounts due from private entities, and the automatically generated entry is reported as Object 9200.
Also, it appeared there was some confusion regarding what types of receivables should be reported using Object 9290. Any amounts due from federal or state entities should be reported using this object, not just amounts due from categorical or “grant” programs.
There was discussion regarding workarounds to reclassify or otherwise determine amounts due from grantor governments, as well as discussion regarding the necessity of this data. Some participants indicated that they do use the data to monitor and balance amounts due from other governments.
The CDE advised that LEAs should record transactions in accordance with the coding established in the California School Accounting Manual (CSAM). The CDE will continue to evaluate LEA fiscal data and provide additional feedback at future meetings.
- Commodities – proposal for new object code
The CDE is proposing to establish a new revenue object code, effective 2012–13, for LEAs to report the value of federal donated food commodities. The CDE has contemplated this guidance for some time, and was finally able to conclude the necessary research and determined that commodities should be reported as revenue at fair market value, with an offsetting amount reported as expenditures or as inventory.
COE participants indicated that they would need to check with their districts for feedback regarding this proposal, since the districts are the ones operating the child nutrition programs.
A participant commented that many LEAs may now receive cash in lieu of commodities, so the receipt of donated food commodities may not be as prevalent as years past.
There was a question regarding to what funds and resources the new object code would be opened. It was noted that food services may be provided in conjunction with a child development program, in which case commodities may need to be accounted for in the Child Development Fund.
The CDE will provide additional information at future meetings.
- Adult Education Fund and Deferred Maintenance Fund – letter and follow-up questions
The CDE noted the release of the July 19 letter, “Adult Education Fund and Deferred Maintenance Fund,” which provides updated guidance regarding the appropriate use of Fund 11, Adult Education Fund, and Fund 14, Deferred Maintenance Fund.
Implementation issues were discussed, and it was noted that LEAs may not have implemented the CDE’s guidance by 2010–11 year-end and have been working with their auditors to properly classify these funds in the audited financial statements.
COEs expect to monitor districts’ use of these funds in 2011–12 to ensure they are using the funds in accordance with the CDE’s guidance.
There was a question regarding the treatment of balances left in Fund 14 from prior to categorical flexibility. LEAs should continue to use Fund 14 only if a substantial portion of the fund’s inflows are committed and only if those inflows are expected to continue. It is not sufficient to merely commit a fund balance. Therefore, if a continuing source of revenue is not intended to be committed to the purposes of Fund 14, the remaining balance should be transferred to the general fund.
The CDE clarified that the continuing source of revenue to be committed to Fund 11 or Fund 14 does not have to be only the amounts formerly restricted to the Adult Education or Deferred Maintenance program, respectively. It can be any available unrestricted amount, categorical flexibility funding or any other general purpose funding.
The CDE also reiterated, per guidance in the letter, that the committed amount should be recorded as revenue, not an interfund transfer. An assigned amount may be recorded as an interfund transfer.
- New and proposed GASB pronouncements – implications for LEA financial reporting
- New pronouncements – GASB 61 and GASB 63
Attachment A [http://www.cde.ca.gov/fg/ac/ac/sacsminutes100411a.asp] and Attachment B [http://www.cde.ca.gov/fg/ac/ac/sacsminutes100411b.asp] provide a summary of GASB 61 and GASB 63, respectively.
Some participants expressed that they would appreciate guidance from the CDE regarding component unit reporting, especially as it relates to charter schools.
The CDE continues to evaluate the new pronoucements and will provide more details guidance as necessary.
- Pending pronouncements
- Accounting and financial reporting for pensions
Attachment C [http://www.cde.ca.gov/fg/ac/ac/sacsminutes100411c.asp] provides a summary of the GASB’s proposed Statement on financial reporting for pensions. The CDE has been in communication with staff from the California State Teachers Retirement System to ensure adequate dissemination of information regarding this proposed Statement and its effects on LEA employers. The CDE noted that the GASB’s comment period for the Exposure Draft has been extended to October 14, 2011.
- Reporting items previously recognized as assets and liabilities
Attachment D [http://www.cde.ca.gov/fg/ac/ac/sacsminutes100411d.asp] provides a summary of the GASB’s proposed Statement on reporting items previously recognized as assets and liabilities. This proposed Statement is related to GASB 63. It identifies the specific transactions for which deferred outflows or deferred inflows of resources would be reported.
The CDE clarified that deferred revenue, currently classified as a liability, will not go away. However, the proposed Statement does prescribe the elimination of any reference to “deferred” except in the context of deferred outflows and deferred inflows of resources. Therefore, “deferred revenues” may need to be renamed. There was a suggestion for “unearned revenue” and several participants agreed that title would be more meaningful.
- Accounting and financial reporting for pensions
SACS Software Issues
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Windows 7 workaround available
The workaround [http://www.cde.ca.gov/fg/sf/fr/sacs2011allprobfix.asp.] for users experiencing problems running the SACS software on computers using the Windows 7 64-bit operating system is available on the SACS2011ALL problems and fixes Web page.
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SACS2012 software – discussion of proposed changes
Attachment E [http://www.cde.ca.gov/fg/ac/ac/sacsminutes100411e.asp] provides a summary of the proposed SACS2012 software changes discussed during the meeting. Not all potential changes were discussed at the meeting. The CDE is in the process of discussing other potential changes and those will be presented at future meetings as necessary. One significant update to be made in the SACS2012 software is the follow-up implementation of GASB 54 changes for the actuals side of the fund forms, mirroring the changes implemented last year for the budget side. Details of these changes were not discussed.Form 09
Regarding the proposal to inactivate Fund 09 for charter schools, the CDE clarified that this is only for charter schools reporting separately, using SACS, under their own county-district-school code. Separately reported charter schools should use either Fund 01 or Fund 62 as their chief operating fund, not Fund 09. Fund 09 will still be available to school districts and COEs that include charter school data with their own data.
The CDE noted that because SACS software reporting forms are not maintained separately for charter schools versus other LEA types, the CDE will not be able to shade the Form 09 budget column to indicate its inactivation beginning 2012–13 for separately-reporting charter schools. Therefore, it is possible that a new technical review check would be established for charter schools only that will check for the existence of Form 09 budget data.
There was a question regarding how the 2011–12 Fund 09 ending balances should be treated in the 2012–13 beginning balances for separately-reporting charter schools since Fund 09 would not be valid for them in 2012–13, and there is a fatal technical review check that compares the two. The CDE will consider the appropriate way to handle this and provide additional guidance at a later date.
Form GANN
There was a suggestion for an additional internal form check to ensure amounts are entered in the adjustments column, even if zeroes, for certain rows relating to categorical flexibility. Apparently some districts may need manual adjustments, for example for Community Day funding that was not flexed, but are not entering them.
Other Issues
- CSAM 2011
CSAM 2011 was approved at the September State Board of Education meeting. The target publication date is mid-October.
The majority of the edits to this edition were topics that had already been disseminated through letters, such as changes related to GASB 54. A couple of key changes that had not previously been disseminated include:
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Procedure 905, Time Accounting: Clarified that where a school puts every single program into a school wide plan, no time accounting is needed. This clarification was added as a result of the U.S. Department of Education’s non-regulatory guidance to that effect. Note that it would be rare for a school to be able to put every program into its school wide plan.
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Procedure 655, Employment Separation Costs – Coding Examples: Clarified that federal programs subject to cost principles must have approval in advance to charge retirement incentives. This clarification was added to be consistent with federal guidelines regarding charging retirement incentives to certain federal funding not subject to the cost principles, such as State Fiscal Stabilization Fund.
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A new procedure was added addressing temporary borrowing. This procedure recaps information that has been provided in previous CDE correspondence regarding budget flexibility and fiscal management issues.
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- Next meeting
The next SACS Forum meeting will be held on Tuesday, January 10, 2012, in the East End Complex Auditorium in Sacramento.
