Skip to main content
California Department of Education Logo

SACS Forum Meeting Minutes, February, 2013

Standardized Account Code Structure (SACS) meeting minutes for February 5, 2013.

Meeting held at the East End Complex Auditorium, Sacramento

Meeting Agenda

Information and Announcements
  • Introductions

Accounting Issues
  • 2011–12 unaudited actuals data review – observations

  • Revised time accounting guidance

  • Deferred outflows and inflows of resources, Governmental Accounting Standards Board (GASB) Statement 63 (GASB 63) and Statement 65 (GASB 65) – update

  • Pension accounting and financial reporting standards, GASB 68 – update and request for local educational agency (LEA) feedback regarding potential questions for the GASB Implementation Guide

  • Economic Impact Aid (EIA) – use of Resource 7090 and/or 7091

  • Education Protection Account (EPA) accounting
SACS Software Issues
  • SACS2013 software – update on proposed change
Other Issues
  • Next Meeting

Meeting Minutes

[These minutes were revised on February 20, 2015 to clarify how OPEB costs are allocated to Objects 3701 and 3702.]

Information and Announcements
  • Consultants in the Financial Accountability and Information Services unit were introduced, including the most recently hired consultant, Derrick Moore.

    Also, it was announced that Peter Foggiato has been hired as the new Director of the School Fiscal Services Division.
Accounting Issues
  • 2011–12 unaudited actuals data review – observations

    The California Department of education (CDE) distributed and reviewed a list of common coding and reporting issues noted during the 2011-12 unaudited actuals data review (Attachment A to the SACS Forum meeting minutes for February 5, 2013). As mentioned at the November meeting, a focus of the review was the indirect cost rate calculation, so many of the issues noted were due to that review. Overall the data submissions were very good and the CDE appreciates LEAs’ efforts to provide accurate and reliable financial data.

    One of the primary issues noted was that postemployment benefits other than pensions (OPEB) allocated costs are not always being allocated per the guidance in the California School Accounting Manual (CSAM), Procedure 785, Postemployment Benefits Other Than Pensions (OPEB). The CDE initially issued this guidance in early 2007 and presumes that there has now been sufficient time for LEAs that offer OPEB to implement the correct accounting practices.

    The CDE distributed and reviewed a sample OPEB allocation (Attachment B to the SACS Forum meeting minutes for February 5, 2013) to clarify the principle that OPEB allocated costs must be allocated among as broad of an allocation basis as possible. This means that any OPEB costs charged in each of object codes 3701 and 3702 must be allocated proportionally to certificated and classified salaries in all activities. An activity to which any certificated salaries are charged in Object(s) 1XXX is charged a share of allocated OPEB costs in Object 3701. An activity to which any classified salaries are charged in Object(s) 2XXX is charged a share of allocated OPEB costs in Object 3702. An activity to which both certificated salaries and classified salaries are charged is charged allocated OPEB in both Object 3701 and Object 3702.

    Also it was clarified that allocation is allowable only for past unfunded OPEB costs. Normal costs paid on behalf of current employees for future benefits are charged directly to the programs from which the current employees’ salaries and benefits are paid, and may not be allocated.

  • Revised time accounting guidance

    As was announced at the November 6, 2012 SACS Forum meeting, the United States Department of Education (ED) issued time accounting guidance on September 7, 2012, that authorizes a new substitute time accounting system and reiterates the definition of a single cost objective. The CDE’s existing definition of a single cost objective is consistent with the ED’s definition.

    The CDE has determined the extent of its involvement and the necessary procedures for implementing the new substitute system. In summary:

    • Current time accounting requirements have not changed. Employees working on a single cost objective are required to provide semi-annual certifications. Employees working on multiple cost objectives are required to provide monthly personnel activity reports (PARS) or equivalent, or use an approved substitute system.
    • The CDE has had an approved optional substitute system in place since 1998, described in CSAM Procedure 905, Documenting Salaries and Wages.

    • The ED’s new substitute system is authorized retroactive to July 1, 2012.

    • Applies to employees that work on multiple cost objectives but whose schedules are predetermined and very fixed.

    • Allows for semi-annual certification in place of PARS, using a predetermined written schedule as supporting documentation, subject to certain requirements.

    • LEAs may use existing substitute system, or the new system, but not both.

    • The CDE has involvement in establishing the new substitute system.

    • Must obtain written management certification from LEAs that want to use the system.

    • Management certification will be part of the Consolidated Application Spring 2013 release, will include retroactive certification for 2012-13.

    • Must define the significant deviation from an employee’s schedule that would warrant reverting back to PARS.

    • Significant deviation has been defined as five percent or more on any single day.

    • Unplanned, unforeseen, infrequent deviation less than five percent is not considered “significant.”

      CSAM Procedure 905 will be updated to include guidance on this new substitute system. Also, the CDE will come up with a unique name for the new system so as not to confuse it with the existing system.

  • Deferred outflows and inflows of resources, Governmental Accounting Standards Board (GASB) Statement 63 (GASB 63) and Statement 65 (GASB 65) – update

    The CDE is still in the process of developing guidance for implementing GASB 63 and GASB 65.

    At the November 6, 2012 SACS Forum meeting the CDE proposed new object ranges and specific object codes for deferred inflows of resources and deferred outflows of resources and asked for participant feedback. Because no concern was raised regarding the proposed object codes the CDE will implement them as proposed.

    LEAs will implement these new standards beginning 2013-14. Although the CDE will open the appropriate valid code combinations effective 2013-14, the associated changes to the SACS software forms will not be made until the SACS2014 budget release for 2013-14 estimated actuals. This is because the new account codes only affect the balance sheet, and balance sheet accounts are not valid for budget and interim data types.

    Additional information regarding GASB 63 and GASB 65 can be found in the November 6, 2012 meeting minutes.

  • Pension accounting and financial reporting standards (GASB 68) – update and request for LEA feedback regarding potential questions for the GASB Implementation Guide

    GASB 68, issued in June 2012, creates new employer pension financial reporting requirements effective 2014-15. The new requirements include reporting a pension liability, expense, and/or deferred inflow of resources or deferred outflow of resources. In addition, more extensive note disclosures and required supplementary information will need to be provided in the annual financial statements.

    The CDE expects that the California Public Employees’ Retirement System (CalPERS) and California State Teachers’ Retirement System (CalSTRS) will be primarily responsible for implementing the requirements of GASB 68 and providing the necessary financial information to LEAs.

    CalSTRS staff has asked the CDE to solicit questions from LEAs regarding the implementation of GASB 68, which in turn may be forwarded to GASB for inclusion in the Implementation Guide. Please forward questions to by the end of March.

  • Economic Impact Aid (EIA) – use of Resource 7090 and Resource 7091

    Because of the passage of Senate Bill 754 (Chapter 573, Statutes of 2012), which implements new expenditure reporting requirements as a condition for the receipt of EIA funding, and the fact that there has been confusion in the past regarding the use of Resource 7090, Economic Impact Aid: State Compensatory Education and Resource 7091, Economic Impact Aid: Limited English Proficient, the CDE wanted to provide a reminder regarding the appropriate use of these resource codes.

    Each LEA’s entitlement is provided as one lump sum amount on the EIA apportionment schedule. LEAs may initially record this amount to Resource 7090; however, amounts used for Limited English Proficient services should be broken out and reported as revenue using Resource 7091 and revenue object 8311, Other State Apportionments – Current Year. The use of Resource 7091 is not optional.

  • Education Protection Account (EPA) accounting

    The CDE has finalized its EPA accounting guidance. Guidance is expected to be issued in the form of frequently asked questions that will be posted to the CDE Website in the near future. To recap:

    • New required Resource 1400 and revenue Object 8012 have been established.

    • Contributions may be made out of Resource 1400 using Object 8091, for example when a COE elects to use its EPA funds for a restricted program funded with revenue limit funds, such as community schools or Special Education.

    • Contributions may not be made into Resource 1400.

    • Object 8019 should be used to record prior year adjustments not previously accrued, for example, the final P2 to Annual entitlement adjustment.

    • Carryover is allowed; all EPA funds are not required to be used in the year they are received.

    • Expenditures recorded to Resource 1400 should be made using actual object of expenditure, not lump-sum transfer using Object 5710, Transfers of Direct Costs.

    • Proposition 30 does not allow EPA funds to be used for administrative costs. The CDE is defining administrative costs by the SACS function. Except as described below for services provided by county office to districts, the following functions will not be allowed for EPA expenditures:

      • Function 2100, Instructional Supervision and Administration
      • Function 2200, Administrative Unit of a Multidistrict SELPA
      • Function 2700, School Administration
      • Functions 7000 – 7999, General Administration

      The exception is that expenditures recorded to these functions by COEs in combination with Goal 8600, County Services to Districts, are allowable. The rationale is that county offices of education are unique in that their primary purpose is services to school districts, much of which is administrative in nature.

    • The CDE will not create a unique report in the SACS software for capturing EPA revenues and expenditures. Instead, the SACS financial reporting software’s Program by Resource report should be a sufficient resource for creating a report should they choose to use it. Ultimately, the reporting format is best left to the discretion of LEAs since the reporting requirement is at that level and not the state level.

    • LEAs are required to hold an open public meeting of the governing board to discuss the use of EPA funds. Proposition 30 is silent regarding as to when this meeting should be held, but the CDE expects that the LEA’s budget adoption meeting would meet the requirement.

      • For 2012-13 funding, the CDE expects that an LEA’s second interim meeting would be the most logical at which use of EPA funds would be discussed. However, as long as it is done prior to the end of June, when funds are received and expenditures are recorded, should be sufficient.

    • The valid combinations of SACS codes will be established after 2nd interim reporting is complete, most likely in a table update the first week of April. This is because there is no line in the SACS2012ALL interim fund forms into which the Object 8012 amount can extract. A workaround for including EPA funding in the second interim reports is to include it in Object 8011. LEAs can accomplish this by either locally defining Resource 1400, Object 8012 and rolling it temporarily to Resource 0000, Object 8011, or recording directly to Resource 0000, Object 8011. Either way, the amount will need to be reclassified so that it will be reported in the unaudited actuals data with Resource 1400, Object 8012 prior to year-end closing.

      UPDATE: Education Protection Account frequently asked questions are now available on the CDE Website.
SACS Software Issues
  • SACS2013 software – update on proposed changes

    The CDE distributed an updated list of proposed changes to be incorporated into the SACS2013 software budget release (Attachment C to the SACS Forum meeting minutes for February 5, 2013). Participants did not have any questions or concerns with any of the proposed changes. 

    NOTE: Subsequent to the meeting the proposed changes to Form RL related to EPA had to be revised. The attachment reflects the updated changes.

Other Issues
  • Next meeting

    The next meeting is tentatively scheduled for Tuesday, May 7 at the CDE in Sacramento. An e-mail will be sent to the participant distribution list once the date is finalized.

    UPDATE: The meeting date has been finalized and a notification was sent to the SACS Forum e-mail distribution list.
Questions:   Financial accountability & Information Services | | 916-322-1770
Last Reviewed: Monday, August 5, 2019