SACS Minutes, May 2014, Attachment B

Local Control Funding Formula (LCFF) – Accounting Frequently Asked Questions (FAQs)
Discussion Draft

• In the standardized account code structure (SACS), will all the LCFF funding be accounted for as an unrestricted resource?
  
  Yes. All LCFF funding will be accounted for using Resource 0000, Unrestricted.
  
  
• What revenue object code should be used to record the state aid portion of the LCFF?
  
  Local educational agencies (LEAs), including charter schools, should use Object 8011, LCFF State Aid – Current Year. Prior year adjustments should be recorded to Object 8019, LCFF/Revenue Limit State Aid – Prior Year.
  
  
• How can expenditures be coded in 2013–14 to address LCFF state priorities?
  
  Funding is provided in an unrestricted resource code. LEAs may define local codes to track expenditures if they wish.
  
  
• Does the LCFF result in any modification or elimination of the “Minimum Classroom Compensation” requirements of EC Section 41372?
  
  No.      
  
  
• Will the recommended level for the reserve for economic uncertainties be increased?
  
  The regulations regarding the recommended reserve for economic uncertainties remain in place under the LCFF (California Code of Regulations Title 5, Section 15449 )
  
  
• Which SACS resource codes and object codes are obsolete as a result of the LCFF?
  
  The following resource codes are obsolete beginning 2013–14 (last funded fiscal year 2012–13):
  
  

  Resource Code	Resource Description
  1300	Class Size Reduction K–3 (optional Resource)
  2200	Continuation Education
  2400	Juvenile Court/County Community Schools
  2410	Juvenile Court
  2420	County Community Schools
  2430	Community Day Schools
  7090	Economic Impact Aid (EIA) – State Compensatory Education (SCE)
  7091	Economic Impact Aid – Limited English Proficient (LEP)
  7250	School Based Coordinated Program (SBCP)
  7230	Transportation: Home to School
  7235	Transportation: School Bus Replacement
  7240	Transportation: Special Education (Severely Disabled/Orthopedically Impaired)

  
  The last fiscal year these resource codes will be available in the validation tables is 2015–16, to allow LEAs time to spend 2012–13 balances. LEAs should plan to spend carried over balances before spending unrestricted funding on the same programs or services.
  
  The following object codes are obsolete for 2013–14 actuals:
  
  

  Object Code	Object Description
  3801	PERS Reduction, certificated positions
  3802	PERS Reduction, classified positions
  7615	From General, Special Reserve, and Building Funds to Deferred Maintenance Fund
  8015	Charter General Purpose Entitlement – State Aid
  8092	PERS Reduction Transfers
  8425	Year-Round School Incentive
  8915	To Deferred Maintenance Fund from General, Special Reserve, and Building Funds

  
  The following object code is obsolete beginning 2014–15:
  
  

  Object Code	Object Description
  8434	Class Size Reduction, Grades K – 3

  
  Although Class Size Reduction (CSR) funding was consolidated into the LCFF, deferral funding was dispersed in 2013–14. Therefore, the revenue object code was left open to allow LEAs to record the CSR revenue.

• Can LEAs report activity in obsolete resource codes and associated obsolete code combinations for 2013–14 year-end reporting?
  
  Activity associated with 2013–14 funding received that has, through 2013–14 second interim, been reported using resource codes and other code combinations that are now obsolete due to the consolidation of categorical funding into the LCFF should be reported in the correct resource code, e.g., Resource 0000, and revenue object codes, e.g., Object 8011, beginning with estimated actuals data in the SACS2014 software budget release. LEAs should not wait to make these adjustments in the unaudited actuals data.
  
  The exception is that expenditures associated with 2012–13 carried over balances of now-obsolete resource codes should continue to be reported in those resource codes. Those resource codes will be available through 2015–16 for this purpose.
  
  Note that the use of obsolete object codes starting with the 2013–14 estimated actuals will result in a fatal technical review check exception (fund x object).
  
  
• Can LEAs make a contribution to obsolete resource codes to cover expenditures made in excess of the 2012–13 carryover amounts?
  
  No. Expenditures made in excess of the available carryover should be reclassified to another appropriate resource code.
  
  
• How are LCFF revenues that have been committed to the purposes of Fund 11, Adult Education Fund, or Fund 14, Deferred Maintenance Fund, recorded now that categorical flexibility funding is consolidated into the LCFF?
  
  Amounts of LCFF revenue that LEAs have formally committed to the purposes of Fund 11 or Fund 14 will now be recorded as an LCFF transfer using Object 8091, LCFF Transfers – Current Year. Object 8099, LCFF/Revenue Limit Transfers – Prior Years, is used to record transfers associated with prior year adjustments.
  
  
• Can Object 8091 continue to be used to transfer funds to Resource 6500, Special Education?
  
  No. Transfers of unrestricted LCFF funding to Resource 6500 should be reported as a contribution using Object 8980, Contributions from Unrestricted Revenues. LEAs should no longer record this transfer using Object 8091, LCFF Transfers.
  
  The rationale is that the former “revenue limit” transfer has not been required since Assembly Bill 602 changed the funding model for Special Education. There is no justification for keeping it under the LCFF funding model.