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SACS Forum Meeting Minutes, February 2020

Standardized Account Code Structure (SACS) February 24, 2020 meeting minutes.

Meeting held via webinar at the California Department of Education (CDE), Sacramento

Meeting Agenda

Announcements and Information
Accounting Update
SACS Software Update
Other Updates

Meeting Minutes

Announcements and Information
  • 2020 Bid Threshold Adjustment

The Annual Adjustment to Bid Threshold for Contracts Awarded by School Districts and the Annual Adjustment to Liability Limit of Parent or Guardian for Willful Pupil Misconduct letters have been posted to the CDE Accounting Correspondence web page. For 2020, both amounts received an increase of 2.76% from the prior year. The bid threshold amount is $95,200, and the willful pupil misconduct amount is $20,900.

  • Staff Updates

Elizabeth Dearstyne has been appointed as the new Director of the School Fiscal Services Division. She replaces Lisa Constancio, who was recently appointed as Deputy Superintendent of the Oversight and Administration Branch.

  • Financial Accountability and Information Services (FAIS) Reorganization

Beginning in March, a new office, Fiscal Oversight and Support, will be established within the School Fiscal Services Division. Jonathan Feagle is the new Administrator for this office. This office will assume fiscal oversight responsibilities. Some Financial Accountability and Information Services staff will report directly to the new administrator, although overall assigned duties will primarily remain the same.

Accounting Updates
  • Revised Form Indirect Cost Rate (ICR) – Exclusion of Food Costs

Food costs, Object 4700, will now be excluded from the indirect cost rate calculation of the Indirect Cost Rate Worksheet (Form ICR) for rates calculated based on 2019–20 financial data, to be used in the 2021–22 fiscal year. Revising Form ICR for the 2019–20 Second Interim reporting period allows local educational agencies (LEAs) the option to review and analyze the potential effect of the change on their indirect cost rates prior to submission of the 2019–20 unaudited actuals financial data. The revised SACS Form ICR is available for download from the CDE’s SACS2019ALL Software: Known Problems/Fixes web page. Note that the SACS2020 and SACS2020ALL software releases will include Form ICR with the Object 4700 expenditures excluded from the indirect cost rate calculation.

The Form ICR’s Exhibit A, Highest Rate Used, which shows the indirect cost rates charged to programs will not reflect this change, i.e., notation of the exclusion of Object 4700 in the Eligible Expenditures column, until the 2021–22 fiscal year. This is because that is the first year the indirect cost rate reflecting the exclusion of Object 4700 expenditures will be used to charge indirect costs to programs.

Beginning in 2021-22, when calculating indirect costs charged to programs, Object 4700 expenditures should be excluded from the pool of program expenditures to which the indirect cost rate is applied. Prior to 2021-22, Object 4700 expenditures may continue to be included in the calculation of indirect costs charged to programs because the approved rates for those years include food costs in the rate calculation.

  • 2018–19 Unaudited Actuals (UA) Data Review – Observations

The CDE provided a list of accounting and reporting observations (DOCX) made during review of the 2018-19 unaudited actuals data reviews. Once again, indirect cost rate calculations were the focus of these reviews and associated observations are also noted on this list.

  • Update: Governmental Accounting Standards Board (GASB) Statement 84, Fiduciary Activities

A summary of previous SACS Forum discussions on GASB 84 can be found in the October 2019 SACS Forum Meeting Minutes and attachment A of those minutes.

Updates were provided on latest developments and decisions made regarding GASB 84 accounting and financial reporting, primarily surrounding associated student body (ASB) activities.

  • Identifying Fiduciary Activities

    CDE recommends that LEAs review policies and procedures for each ASB activity or club to determine whether each activity or club meets the definition of a fiduciary activity in accordance with GASB 84. ASB activities that meet the definition of fiduciary activities in accordance with GASB 84 can be reported in Fund 95, Student Body Fund. ASB activities that do not meet the definition of fiduciary activities in accordance with GASB 84 are considered governmental activities and should be reported in a governmental fund, either general fund or special revenue fund.

  • New Fund 08, Student Activity Special Revenue Fund

    After further considering feedback, CDE finalized establishing Fund 08, Student Activity Special Revenue Fund, for reporting ASB activities that are determined to be governmental rather than fiduciary.

    • The fund is open to county offices of education, school districts, and charter schools.
    • The use of Fund 08 is optional that LEAs may report governmental ASB activities in either general fund or Fund 08.
    • Fund 08 will be available starting with the SACS2020 Budget software for 2019–20­ estimated actuals and 2020–21 budget reporting.

  • New Resource 8210, Student Activity Funds

    CDE also established a unique resource, Resource 8210, Student Activity Funds, for reporting governmental ASB activities. This will allow for identification of governmental ASB activities regardless of the fund in which they are reported.

    • LEAs are required to use this resource for reporting all governmental ASB activities.
    • Resource 8210 is open to Fund 01, Fund 08, Fund 09, and Fund 62.
    • The range of resources 8201 through 8299 is reserved by CDE for local definition to allow LEAs the option to track different ASB activities. When reporting data to CDE, LEAs must roll up these locally defined resources to Resource 8210.

    CDE determined that ASB activities should be considered restricted because Education Code (EC) Section 48930 specifies that the purpose of ASBs is to conduct activities on behalf of the students for whom those funds are collected. It can be inferred that the funds are held for current students at the same school at which the funds were raised. In addition, EC 48933 indicates that the ASB funds should be expended subject to procedures established by the ASBs.

  • Validation Table Updates to Establish New Codes

    Validation table updates establishing the new Fund 08, new Resource 8210, and associated goal, function, and object code combinations were discussed. Subsequent to the meeting, after additional discussions with a few LEA staff, additional object codes were identified for opening to Fund 08. Please refer to the spreadsheets of valid code combinations available for download from the SACS Valid Codes and Combinations web page to see the code combinations established for the new student activity fund and resource code.

  • Impacts on SACS Software Functionality

    • Resource 8210 will be excluded from minimum classroom compensation calculation (Form CEA/CEB) because the governmental ASB activities are not related to classroom instruction.
    • The Components of Ending Fund Balance (CEFB) screen will be available for Fund 08, Fund 76, and Fund 95.
    • The indirect cost rate calculation (Form ICR) will be revised to include Fund 08 expenditures in the base of the calculation since indirect costs are allowed to be charged.

  • Revised Funds 76, Warrant/Pass-Through Fund, and 95, Student Body Fund

    Fund 76, Warrant/Pass-Through Fund, and Fund 95, Student Body Fund have been revised to incorporate financial reporting changes pursuant to GASB 84. In addition, Forms 76 and 95 will be available for budget and interim reporting. Changes will first appear in the SACS2020 budget software release for 2019−20 estimated actuals and 2020−21 budget data.

  • Other GASB 84 Accounting and Reporting Issues

    Some questions were addressed during the meeting.
    • Should LEAs keep ASB cash in stand-alone bank accounts or maintain it with county treasury?

      This is a local policy decision. GASB 84 does not address this topic.

    • Is a board resolution required to establish the new Fund 08?

      This is a local decision and should be determined in accordance with the LEA’s local governance policies.

    • How often should ASB financial activities maintained outside of the LEA’s financial system be recorded in LEA’s system?

      LEAs are not required to record ASB activities in LEAs’ local financial systems on a daily basis. LEAs may record monthly, quarterly, or annual journal entries in the appropriate fund as deemed necessary for preparing interim and year-end financial statements.

    • Will the required contribution to the Routine Restricted Maintenance Account (RRMA), Resource 8150, be affected if ASB activities are reported in the general fund?

      Since the RRMA contribution calculation is based on general fund expenditures, increased expenditures, including those associated with ASB activities, may cause an increase in the RRMA contribution. However, if an LEA elects to establish Fund 08 to report governmental ASB activities, the RRMA contribution will not be affected.

    • Will Fund 08 expenditures be included in an LEA’s reserve for economic uncertainties calculation?

      Fund 08 expenditures will not be included in the LEA’s reserve for economic uncertainties calculation. However, if ASB activities are reported in the general fund, those expenditures will be included in the LEA’s reserve calculation.

  • Update: GASB Statement 87, Leases

CDE provided additional GASB 87 accounting and financial reporting information and guidance. Refer to the October 2019 SACS Forum minutes for previous discussion on this standard.

  • Lease Definition

    GASB 87 defines a lease as a contract that conveys control of the right to use another entity’s nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction.

  • Calculating the Lease Term

    To correctly calculate the lease term, it is important to determine when the lease term begins. The term of a lease cannot begin before the lessee has the right to use the service capacity of the underlying asset; lease term begins when the lessee takes physical possession of, or gains access to, the underlying asset (Implementation Guide 2019−3, question 4.12).

    Example: Lease payments during the construction period of the underlying asset (building) should be treated by lessee and lessor as prepayments (assets), not as a lease asset. When the lease term commences, the lessee should reclassify prepayments by including them in the initial measurement of the intangible lease asset (Implement Guide 2019−3, question 4.32).

  • Types of Leases

    GASB 87 identifies three types of leases.

    • Short-term leases

      A short-term lease is a lease that, at the commencement of the lease term, has a “maximum possible term” under the lease contract of 12 months (or less), including any options to extend, regardless of their probability of being exercised (GASB 87, paragraph 16).

      Example: Two leases are covering the same asset(s) between the same parties, negotiated at the same time and entered into with the same objective. In addition, the two leases cover consecutive periods such that the maximum combined term is greater than one year. Then these two leases should be combined and not treated as two short-term leases (Implementation Guide 2019−3, question 4.20).

      Accounting for short-term leases:
Lessee Lessor

Lease payments are recognized as outflows of resources (i.e., expenses/expenditures) based on the payment provisions of the lease contract.

  • For example, Object 5600, Rentals, Leases, Repairs, and Noncapitalized Improvements

Lease payments are recognized as inflows of resources (i.e., revenue) based on the payment provisions of the lease contract.

  • For example, Object 8650, Leases and Rentals
No recognition of assets or liabilities associated with the right to use the underlying asset for short-term leases. No recognition of receivables or deferred inflows associated with the short-term lease.
Payments made in advance are recognized as an asset, i.e., Object 9330, Prepaid Expenditures. Payments made in advance are recognized as a liability, i.e., Object 9650, Unearned Revenue
Payment due but not paid in the reporting period is recognized as a liability (i.e., payables). Payment due but not received in the reporting period is recognized as an asset (i.e., receivables).
Not recognize an outflow of resources during any rent holiday period, i.e., one or more months free. Not recognize an inflow of resources during any rent holiday period, i.e., one or more months free.
No additional disclosures are required to financial statements. No additional disclosures are required to financial statements.
  • Contracts that Transfer Ownership

    A contract that transfers ownership is defined as a contract that transfers ownership of the underlying asset to the lessee by the end of the contract and does not contain termination options (GASB 87, paragraph 19).

    Implementation Guide 2019−3, questions 4.21 and 4.22 provides examples of contracts that transfer ownership.

    The lessee should account for and report the transaction as a financed purchase of the underlying asset (that is, reporting the underlying asset and a liability, rather than a lease asset and a lease payable). The lessor should account for and report the transaction as a sale of the asset.

  • All Other Leases (leases other than short-term leases and contracts that transfer ownership)

    The lease accounting discussed during the meeting is for financial statements prepared using the current financial measurement focus. If a lease is expected to be paid from general government resources, the lease should be accounted for and reported on a basis consistent with governmental fund accounting principles.

    Initial recognition and measurement (at the commencement of a lease):
Lessee Lessor
  • Report an expenditure and other financing source in the period the lease is initially recognized.
  • Measure the expenditure and the other financing source using the guidance for measuring the lease liability as provided in GASB 87, paragraphs 21−23.
    • Capital outlay expenditure objects, for example, Object 6400, Equipment; or need a new object code for lease right-of-use asset?
    • Other financing source object, that is, Object 8972, Proceeds from Capital Leases (which will be updated by eliminating the word "Capital")
  • Recognize a lease receivable and a deferred inflow of resources for a lease.
  • Measure the lease receivable using the guidance as provided in GASB 87, paragraph 44.
  • Measure the deferred inflow of resources at the initial value of the lease receivable plus payments received at or before the commencement of the lease term that relate to future periods (for example, the final month's rent).
    • Lease Receivable – need a new object code?
    • Object 9690, Deferred Inflows of Resources

Subsequent recognition and measurement:

Lessee Lessor
  • Subsequent lease payments are accounted for consistent with the principles for debt services payments on long-term debt.
    • Object 7439, Other Debt Service-Principal
    • Object 7438, Debt Service-Interest
  • Reduce the lease receivable by lease payments and recognize interest income (a non-operating revenue).
    • Object 8660, Interest
  • Recognize the deferred inflow of resources as revenue over the lease term in a systematic and rational manner.
    • Object 8650, Leases and Rentals
  • Transactions with Lease Component


    A sublease involves three parties: the original lessor, the original lessee (who also is the lessor in the sublease), and the new lessee. The original lessee who becomes the lessor in the sublease should account for the original lease and the sublease as two separate transactions. The original lessee should not offset the original lease liability and the sublease receivable.


    Sale-leaseback transactions involve the sale of an underlying asset by the owner and a lease of the property back to the seller (original owner). A sale-leaseback should include a transaction that qualifies as a sale (pursuant to GASB 62); without a qualifying sale, the transaction should be accounted for as a borrowing activity by the seller-lessee and a lending activity by the buyer-lessor. The sale and lease portions of a sale-leaseback transaction should be accounted for as two separate transactions (a sale transaction and a lease transaction respectively), except that any gain or loss on the sale portion should be recorded as a deferred inflow of resources or a deferred outflow of resources, respectively, and recognized over term of leaseback (but immediately recognize if the leaseback is short-term lease).

    In a lease-leaseback transaction, an asset is leased by one party (first party) to another party and then leased back to the first party. A lease-leaseback transaction should be accounted for as a net transaction (Implementation Guide 2019−3, questions 4.73 and 4.74).

CDE will continue the discussion of GASB 87 at the May SACS Forum meeting. Please send your questions and comments to

  • Update: Special Education Goals 5750 and 5770 Change Effective 2020–21

As previously discussed at the October 2018 and February 2019 SACS Forum meetings, effective 2020−21 SACS Special Education goals 5750, Special Education, Ages 5−22, Severely Disabled, and 5770, Special Education, Ages 5−22, Nonseverely Disabled, will be eliminated and replaced with new Goal 5760, Special Education, Ages 5−22.

LEAs may establish locally defined goals to separately track severe, nonsevere, or other categories of ages 5−22 Special Education expenditures. When reporting SACS data to CDE, locally defined goals must be rolled up to Goal 5760.

The Special Education Maintenance of Effort reports will be updated to reflect this change and will be available in the SACS2020ALL software.

  • Every Student Succeeds Act (ESSA) Per-Pupil Expenditure Reporting Update

The ESSA per-pupil expenditure (PPE) data was due to the CDE on February 28, 2020. The CDE will contact LEAs that either haven’t submitted their ESSA PPE data, or those that had data submission issues.

In December of 2019, the CDE emailed each Superintendent of each school district and county office, and to the Administrator of each charter school, as listed within the California School Directory, providing access codes for the data collection system. Also, in January 2020, the CDE emailed the same information to each Chief Business Officer listed within the California School Directory.

The CDE previously hosted monthly webinars beginning in November 2019. Each of the webinars provided information regarding the ESSA PPE calculation (PDF) and the use of the ESSA PPE Reporting Application.

If an LEA has any additional questions or if further assistance is needed, please send an email to, or call 916-322-1770.

  • Validation Table Update

A validation table update was released on January 29, 2020. The tables are available for download and can be found on the CDE’s SACS Valid Codes and Combinations web page.

Three new resource codes were added in this update:

  • Resource 4037 – ESSA: Title II, Part A, 21st Century California School Leadership Academy
  • Resource 7700 – Full-Day Kindergarten Facilities Grant Program
  • Resource 8210 – Student Activity Funds.

Note that previously, the CDE provided guidance for the Full-Day Kindergarten Facilities Grant Program to use Resource Code 7710. However, the Office of Public School Construction reached out to the CDE and requested that the Full-Day Kindergarten Facilities Grant Program be assigned a separate resource code due to specific reporting requirements for this grant. When recording revenue with this resource, please use object code 8590, All Other State Revenue.

SACS Software Update
  • SACS2020 Software Criteria and Standards Updates

The CDE proposed changes for the SACS2020 software budget release, Criteria and Standards, as noted below.

Criterion 2–LCFF Revenue–for County Office/District

  • Remove Economic Recovery Target funding line

    Due to the full implementation of Local Control Funding Formula (LCFF), beginning in FY 2020–21 and forward, the district will be receiving the same Economic Recovery Target (ERT) amount year after year, and no longer in increments. Therefore, a separate line would not be needed. The ERT amount can be included as part of the LCFF funding amount. This is applicable for District and only for the COE’s Charter Funded County Program.

Criterion 7/8/10–Fund Balance and Reserves–for COE/District/Joint Power Authority (JPA)

  • Adjust the standard percentage level dollar amounts by the prior year COLA

    The standard percentage level dollar amounts are to be adjusted annually by the prior year statutory cost of living adjustment, which was 3.26%. This is applicable for the Fund Balance criterion (COEs only) and the Reserve criterion (all LEAs).

Supplemental Information–S5–Contributions–for COE/District

  • Extract 1st and 2nd subsequent years Contributions from Form Multiyear Projections (MYP)

    To eliminate errors and duplicate manual entries, LEAs will no longer manually enter contributions for the 1st and 2nd subsequent years if Form MYP exists. Those amounts will be extracted from Form MYP, Unrestricted, Object 8980. If Form MYP does not exist, LEAs will still need to manually enter these amounts. This section will now be consistent for all fields in that all amounts (contributions, transfers in, and transfers out) are extracted if Form MYP exists.

Supplemental Information–S7–Unfunded Liabilities–for COE/District

  • Add “measurement” date of the Other Postemployment Benefits (OPEB) valuation

    In section line 4e, if the OPEB liabilities were based on an actuarial valuation, LEAs need to indicate the date of the OPEB valuation. Based on feedback from LEAs, there has been some confusion on whether if they should enter the date of the report, the valuation date, or the measurement date. To provide more clarity in which date to use, we are adding that if based on an actuarial valuation, indicate the “measurement” date of the OPEB valuation. This is also consistent in the guidance from CSAM, Procedure 785, OPEB section for Valuations.
Other Updates
  • Next Meeting

The next SACS Forum is tentatively scheduled for Tuesday, May 12, 2020. CDE is again planning on offering the forum via webinar only.

Questions:   Financial Accountability & Information Services | | 916-322-1770
Last Reviewed: Wednesday, December 27, 2023