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SACS Forum Meeting Minutes, March 2016

Standardized Account Code Structure (SACS) meeting minutes for March 14, 2016.

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

Meeting Agenda

Announcements and Information
  • November 2, 2015 SACS Forum Minutes

  • California School Accounting Manual (CSAM) 2016

  • CASBO SACS Basic and Advanced Concept Workshops

  • 2014–15 Unaudited Actuals Data Review – Common Coding/Reporting Issues
Accounting Issues
  • Adult Education Block Grant – Consortium Accounting Questions

  • STRS On-Behalf 2015–16 Contribution Rate Update

  • Accounting for Technology Purchases

  • Tracking Mental Health Services in SACS
SACS Software Issues
  • SACS2016 Software – Proposed Changes

  • Criteria and Standards – District average daily attendance (ADA) and Enrollment

  • Special Education Maintenance of Effort (MOE)

  • Criteria and Standards – County Offices of Education (COE) Local Control Funding Formula (LCFF) Revenue Workgroup
Other Issues/Next Meeting
  • Next Meeting

  • Other Items

Meeting Minutes

Announcements and Information

SACS:Basic Concepts Workshops

  • April 21: Fresno
  • April 25: Sacramento
  • May 3: Marin
  • May 9: Ontario (Rancho Cucamonga)
  • May 23: San Luis Obispo
  • June 1: Redding

SACS: Advanced Concepts Workshops

  • April 22: Fresno
  • April 26: Sacramento
  • May 4: Marin
  • May 10: Ontario (Rancho Cucamonga)
  • May 24: San Luis Obispo
  • June 2: Redding
  • 2014–15 Unaudited Actuals Data Review – Common Coding/Reporting Issues

    The CDE distributed and reviewed a list of common coding and reporting issues noted during the 2014–15 unaudited actuals data review (Attachment A to the SACS Forum meeting minutes for March 14, 2016). The handout describes common errors, the correct procedure, and references to the formal guidance. A focus of the review was the indirect cost rate calculation, so many of the issues noted were due to that review.

    The CDE mentioned that Charter Management Organization (CMO) fees paid for charter school oversight services should be charged to those functions that best describe the activities performed, such as Instructional Supervision and Administration (Function 2100), School Administration (Function 2700), or Pupil Services (functions 3000–3999) and not just charged entirely to Function 7200 (Other General Administration).   

    Also, fees paid by charter schools for “back office” accounting services are partially attributable to the school administration function and should be allocated appropriately. The CDE recommends charter schools should follow the standardized distribution in lieu of documentation of 70% to Function 2700 (School Administration) and 30% to Function 7200 (Other General Administration).

    There was a question regarding charter schools that report annual financial data using the Alternative Form and what indirect cost rate they can use. CDE advised that these charter schools can use the approved statewide average indirect cost rate, available on CDE’s Indirect Cost Rates Web page.

    There was another question from a participant regarding whether charter schools that report financial data using the Alternative Form will be able to charge indirect costs using the statewide indirect cost rate. They heard that the CDE’s next delegation agreement with the federal government for establishing LEA indirect cost rates will no longer allow this. The CDE responded that there are no changes that they know of at this time.

Accounting Issues
  • Adult Education Block Grant (AEBG) – Consortium Accounting Questions

    A few questions have been raised since the release of this guidance for which the CDE would like to provide the following clarification:  

    • 5% Cap for Consortium Costs

      For local educational agencies (LEAs) who are the fund administrator, or fiscal agent, for an adult education consortium, there is a 5% cost cap for “the costs of the consortium.” The CDE clarified this cost cap is separate and distinct from the indirect cost rate. The cost cap is calculated on the total AEBG received for the consortium lead and its members.

      LEAs who are the fund administrator for an adult education consortium may also have received funding for their own adult education program. For this portion of the AEBG, the consortia fund administrators may use their state-approved indirect cost rate.

    • Assembly Bill (AB) 104 (Chapter 13, Statutes of 2015) (MOE and non-MOE) vs. AB 86 (Chapter 48, Statutes of 2013) (planning grants)

      • CDE advises LEAs use Resource 6391, Adult Education Block Grant Program, for MOE and non-MOE funding received from the California Department of Education in 2015–16.
      • CDE advises LEAs use Resource 7810, Other Restricted State, for AB 86 planning grants* received from the California Community College Chancellors Office (CCCCO).

        *The 2013–14 State Budget appropriated $25 million to the CCCCO to allocate funding for two-year planning and implementation grants. The funds were provided to eligible consortia for the purpose of developing regional plans for adult education.

    • Pass-through accounting model versus subagreement for services accounting model (Attachment B to the SACS Forum meeting minutes for March 14, 2016)

      • LEAs should refer to CSAM Procedure 750 to determine which model to use.
      • The definition for Object 5100, Subagreement for Services, in CSAM Procedure 330, is also helpful in making this determination.
      • The determination should be made by the LEA, not by CDE.
      • Reminder: LEAs are required to use Fund 11, Adult Education Fund, for all AEBG revenues and expenditures. CDE advises LEAs to use Fund 11 to record all adult education activities and expenditures.

A participant asked, and CDE can confirm, that Fund 11, Adult Education Fund, is valid in combination with Object 8677, Interagency Services Between LEAs.

A participant stated that her LEA still has an adult education program in Fund 01, and the AEBG program in Fund 11. CDE advise LEAs to record all adult education activities in Fund 11.

  • STRS On-Behalf 2015–16 Contribution Rate Update

    The CDE announced the final 2015–16 on-behalf contribution rate as follows:

    Description Rates
    Benefits Funding
    Supplemental Benefit Maintenance Account (SMBA)
    TOTAL 2015–16 STRS State Contribution Rate

    CDE reiterated that all LEAs should be booking the revenues and expenditures associated with the state’s on-behalf contribution to CalSTRS for 2015–16.

    NOTE: Subsequent to the meeting, CDE announced the preliminary 2016–17 on-behalf contribution rate of 8.578248%. The final rate will be available in February 2017. In addition, the CDE has updated the instruction page of the on-behalf calculation spreadsheet application by removing reference to a specific fiscal year’s on-behalf rate and calculation, thus eliminating the need to update the instructions each year. The updated spreadsheet application can be accessed on the CDE Accounting Correspondence Web page.
  • Accounting for Technology Purchases

    The CDE continued their discussion on the coding of technology purchases. To recap, the National Center for Education Statistics (NCES), to whom CDE reports LEA expenditures, may require LEAs to report their technology purchases separately at some point. The CDE asked how LEAs are currently reporting technology purchases. A participant responded they are using locally defined codes to distinguish technology purchases from other purchases. One participant responded that if CDE makes coding technology purchases separately a requirement, a new object code would be best to help LEAs know it is not optional.

  • Tracking Mental Health Services in SACS

    Last year, the California State Auditor performed a review of the effect of AB 114 (Chapter 43, Statutes of 2011), which transferred to LEAs the responsibility for providing mental health services to students through individualized education programs (IEPs). The results of that review were released in January 2016, in the report “Student Mental Health Services - Some Students’ Services Were Affected by a New State Law, and the State Needs to Analyze Student Outcomes and Track Service Costs”. The report can be found on the California State Auditors’ Most Recent Reports Web page External link opens in new window or tab..

    The auditors reported that LEAs were unable to tell them how much money was spent on mental health services. As a result, one of the recommendations to the CDE in this report is for the CDE to develop and require all LEAs to follow an accounting methodology to track and report special education mental health services. Currently, there is legislation being proposed, Senate Bill 884 that would implement this recommendation by requiring a school district or SELPA to document and report to CDE all mental health and special education services funding allocations and expenditures. Should this legislation pass, there is a possibility that a new SACS code or codes would be necessary.

    Additionally, the auditors reported that the LEAs had accumulated carryover balances in Resource 6512, Special Ed: Mental Health Services, which led the auditors to question whether the carryover balances equated to a decrease in mental health services. Meeting participants explained the guidance came out late in 2011–12 and it has taken a few years for them to gear up and plan on how to spend funds, a normal progression with any new program.

    There was discussion regarding the advantages and disadvantages of setting up a new function code to track mental health services. The CDE currently has Function 3120, Psychological Services, which is used for recording mental health services. Participants expressed that an additional function code may cause the loss of the identity of the expenditures in other appropriate categories and make it difficult to distinguish between psychological and mental health services. It was asked if a new goal code could be established, but CDE clarified the goal code is more population driven than program driven.

    The CDE expressed their belief that using a SACS code to track all mental health expenditures may not be the best approach. Participants communicated their desire to not complicate matters and expressed they do not want another required report. The CDE encouraged LEAs to communicate their thoughts and misgivings about a new reporting requirement to the Legislature. The CDE closed by saying they have no plans at this time to make any changes and will keep LEAs posted on any developments.
SACS Software Issues
  • SACS2016 Software – Proposed Changes

    The CDE distributed an updated list of proposed changes to be incorporated into the SACS2016 software budget release (Attachment C to the SACS Forum meeting minutes for March 14, 2016). Participants did not have any questions or concerns with any of the proposed changes.

    The updated software is expected to be released in early May, along with a validation table update that provides new code combinations needed with the associated SACS software fund form changes.

    • Criteria and Standards – ADA Enrollment

      Last year, a workgroup was formed to discuss the mismatch of ADA and enrollment data for the District Funded County Programs and the inclusion of Charter School ADA reported in the district’s funds 01, 09, and 62.

      The workgroup decided to no longer include District Funded County Program ADA/enrollment, or Charter School ADA corresponding to financial data reported in funds 09 and 62, in criteria 1, 2, and 3. These criteria will now only include District Regular ADA, and Charter School ADA/enrollment corresponding to financial data reported in only Fund 01. Detailed changes can be found in Attachment C to the SACS Forum meeting minutes for March 14, 2016.

    • Special Education Maintenance of Effort (MOE)

      The CDE discussed the following revisions to the special education MOE reports:

      • Two method selections were added for LEAs to choose from to meet the MOE requirement: Combined state and local expenditures on a per capita basis, and local expenditures only on a per capita basis.

        UPDATE:  Subsequent to the March SACS Forum meeting, the Special Education Division requested changes to the special education MOE reports by eliminating the requirement for LEAs to select one particular method to use to meet the MOE requirement.

      • The Web page reference for accessing the IDEA MOE Exemption Worksheet was added in the Section 1. The IDEA MOE Exemption Worksheet must be completed and included with the MOE reports if LEAs used any exempt reductions.

      • An explanation box was added at the end of the Section 2, Reduction to MOE Requirement Under IDEA, to allow LEAs to list the activities (which are authorized under the Elementary and Secondary Education Act) paid with the freed up funds.

        In compliance with the federal Subsequent Years rule, two new subparts were added to the MOE reports in Section 3 – Section 3.A.2 and Section 3.B.2 – to allow LEAs to enter fiscal information of the comparison year when LEAs fail to maintain MOE in the preceding fiscal year.

      NOTE: The following questions were asked at the March SACS Forum meeting. Answers have been revised and may be different from those given at the meeting due to the Special Education Division clarifying the MOE requirement in compliance with the federal Subsequent Years rule following the March meeting.

      • May LEAs use these four methods to meet the MOE requirement?

        We confirmed that there are four methods LEAs may use to meet the MOE requirement.

      • Will the SACS software automatically calculate and complete the information for all four methods in the Section 3?

        If the LEA met the MOE requirement using all four methods in the preceding fiscal year, then the LEA would be able to use the information from Section 3.A.1 and Section 3.B.1 to meet the MOE requirement. Section 3.A.1 and 3.B.1 are automatically completed by the SACS software. Otherwise, the LEA would need to complete either Section 3.A.2 and/or 3.B.2., depending on which method(s) the LEA did not meet the MOE requirement in the preceding fiscal year.

      • How should LEAs choose which method to use to meet the MOE requirement?

        Due to the federal Subsequent Years rule, there is no advantage to one method over another in meeting the MOE. Therefore, LEAs are not required to choose one particular method for meeting MOE requirement.

      • What if the LEA has never used the local funds only method to meet the MOE requirement?

        Based on the federal regulations, which became effective July 1, 2015, it is the U.S. Department of Education’s expectation that LEAs have been complying with the federal Subsequent Years rule since fiscal year 2012–13. For fiscal year 2012–13, an LEA must have maintained at least the same level of expenditures as it did in the preceding fiscal year, 2011–12, unless it did not meet the MOE requirement in that year. If it did not, the LEA must determine what it should have spent in fiscal year 2011–12, which is the amount that it actually spent in the preceding fiscal year, 2010–11. CDE advised that LEAs must be able to provide auditable data regarding their expenditures from the relevant sources in all relevant years.

  • Criteria and Standards – COE LCFF Revenue Workgroup

    Criteria and Standards, Criterion 2. LCFF Revenue: This criterion had been disabled for COE’s during the transition to full LCFF implementation. The CDE announced they are planning to activate this criterion for COE’s in the SACS2017 software, and is looking for individuals to volunteer to take part in a workgroup.

    The purpose of the workgroup is to get input from the field. The CDE would create the proposed changes to Criterion 2, LCFF Revenue, and send them to the workgroup members for their review and input. Most of the communication will most likely be through e-mails and conference calls.

    The CDE plans to start the workgroup hopefully in late summer. If anyone is interested or knows of anyone that may want to be part of this workgroup, send an e-mail to
Other Issues/Next Meeting
  • Next meeting

    The next SACS Forum is tentatively scheduled for October 18, 2016. It will take place at the CDE, 1430 N Street, Sacramento, in Room 1101.

  • Other Items

    There was a question regarding the new E-Rate guidance given at the November 2, 2015 SACS Forum, and whether it was to be booked in 2015–16. CDE's guidance has been that LEAs should apply the new guidance in 2015–16 and onward. The new guidance in available in the 2016 edition of CSAM, Procedure 560, Abatement of Expenditures.
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Last Reviewed: Tuesday, August 25, 2020