SACS Forum Meeting Minutes, May 2013

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

Meeting Agenda

Information and Announcements

• SACS2013 budget financial reporting software release

• 2013-14 indirect cost rates published

• New School Fiscal Services Division Director and Principal Apportionment Administrator

Accounting Issues

• Time accounting – CDE letter and frequently asked questions

• Accounting for the consolidation of the English Language Acquisition Program (ELAP) into the Economic Impact Aid (EIA) program

• Using the appropriate goal to account for vocational and adult education program expenditures

• Education Protection Account (EPA) accounting – update

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

• GASB 68, pension accounting and financial reporting standards – update

SACS Software Issues

• SACS2013ALL software – proposed changes

• EPA – reminder that codes not available in SACS2012ALL software forms

• Survey regarding use of Windows 8

Other Issues

• Web conference information
  
  
• Next meeting

Meeting Minutes

Information and Announcements

• SACS2013 budget software release

  The SACS2013 budget financial reporting software[http://www.cde.ca.gov/fg/sf/fr/] is available for download.
  
  
• 2013-14 indirect cost rates published
  
  The 2013-14 indirect cost rates have been published to the Indirect Cost Rate Web page [http://www.cde.ca.gov/fg/ac/ic/].
  
  
• New School Fiscal Services Division Director and Principal Apportionment Administrator

  Peter Foggiato, former Administrator of the Principal Apportionment and Special Education (PASE) office, is the new Director of the School Fiscal Services Division.

  Last week it was announced that Elizabeth Dearstyne is the new Administrator of the PASE office.

Accounting Issues

• Time accounting – CDE letter and frequently asked questions
  

  The CDE has published a guidance letter for the new substitute time accounting system that was issued by the United States Department of Education in September 2012 [http://staging.cde.ca.gov/fg/ac/co/timeaccounting2013.asp].

  A few questions have been raised since the release of this guidance for which the CDE would like to provide the following clarification:
  
  
  • The new substitute system does not apply to employees working on a single cost objective.
  • Only one substitute system may be used. A local educational agency (LEA) may not choose to use the new system for employees working a set schedule and the existing system for all other employees eligible to use the existing system but not the new system.
  • The new substitute system may only be used by employees with a set schedule.
  • Approval for use of the new substitute system will be made by the CDE via the Consolidated Application and Reporting System, including approval for retroactive implementation for 2012-13.

• Accounting for the consolidation of the English Language Acquisition Program (ELAP)  into the Economic Impact Aid (EIA) program
  

  The CDE clarified the appropriate accounting for the former ELAP funding that is accounted for in Resource 6286. The CDE noted in a review of the 2011-12 unaudited actuals data that some LEAs continue to report revenue and transfers in to this resource code even though funding is no longer dedicated to the ELAP program. 

  In 2010-11 ELAP funding was consolidated into the EIA program. For 2010-11 only, LEAs that wanted to use the former ELAP funding for ELAP expenditures were allowed to transfer funds from EIA to the ELAP Resource 6286. This transfer was to have been made using Object 8990, Contributions from Restricted Revenues. In subsequent fiscal years there should be no revenue or contributions reported in Resource 6286, unless the contribution relates to a correction.

  Resource 6286 SACS code combinations are valid through 2013-14. This should give LEAs sufficient time to spend down balances carried over from 2009-10 and prior fiscal years, as well as any amounts that were transferred from EIA in 2010-11.
  
  
• Using the appropriate goal to account for vocational and adult education program expenditures
  

  Participants were reminded that although state adult education, regional occupational centers/programs (ROCP), and certain vocational education apportionments were included in categorical flexibility and thus are no longer restricted to the purposes of those programs, if LEAs expend unrestricted funds for purposes of those programs,  then the appropriate SACS goal code for those student populations should be used (e.g., goals 4110 through 4630 for adult education populations, Goal 6000 for ROCP populations, and Goal 3800 for vocational education populations). Expenditures should not be lump-sum recorded to Goal 1110, Regular Education - K-12.

  Recording expenditures to the correct goal has become more important than ever for these programs because CDE program staff are now using SACS unaudited actuals general ledger and Program Cost Report expenditure data to assist with demonstrating state matching and state-level maintenance of effort requirements. Because LEA expenditures associated with flexed categorical funds cannot be captured via a resource code, as all flexed funding is recorded to Resource 0000, Unrestricted, the goal code is being used to capture the necessary expenditure data. Note that it is only necessary to record direct instructional costs, not necessarily support costs, to the benefitting goal within the general ledger. Support costs not recorded to the benefitting goal within the general ledger will be allocated to the benefitting goals via the Program Cost Report.
  
  
• Education Protection Account (EPA) accounting – update
  
  The CDE has posted frequently asked questions for accounting for EPA [http://www.cde.ca.gov/fg/ac/ac/sacsfaq.asp] as well as frequently asked questions for apportionment issues [http://www.cde.ca.gov/fg/aa/pa/pafaq.asp].
  
  

  The EPA resource code, 1400, has been opened to some additional funds:

  Fund 11, Adult Education
  Fund 12, Child Development
  Fund 13, Cafeteria Special Revenue
  Fund 14, Deferred Maintenance
  Fund 61, Cafeteria Enterprise
  
  Also, a question was asked regarding whether the revenue used to calculate the charter school oversight fee includes EPA revenue. Since revenue, per Education Code Section 47613(f), includes the charter school general purpose entitlement, and the general purpose entitlement is defined as including state and local funds, then EPA should be included in the total revenue used to calculate the oversight fee.
  

• Governmental Accounting Standards Board (GASB) Statements 63 and 65 (GASB 63 and 65), deferred outflows and inflows of resources – update
  
  The CDE is still in the process of developing guidance for LEAs to implement the provisions of GASB 63 and GASB 65.
  
  
• GASB 68, pension accounting and financial reporting standards – update
  

  The CDE did not receive any LEA feedback requested at the last meeting regarding potential questions to be addressed in the GASB Implementation Guide.

  The CDE continues to monitor GASB 68 developments and will provide information as available at future meetings. The CDE still expects that when the time comes, PERS and STRS will provide the pension expense, net pension liability, and deferred outflows or deferred inflows of resources that LEAs will need to recognize in their government-wide financial statements.

SACS Software Issues

• SACS2013ALL software – proposed changes
  
  Discussed changing the internal form check (IFC) for Form GANN from Warning to Fatal. The IFC requires input of State Aid Received for flexed programs into the Adjustments column. If the LEA did not receive State Aid, a zero must be entered. If the IFC is made fatal, the user would still be able to close the form without fixing the condition, but the condition would be required to be fixed in order to complete an official export. The affected lines on Form GANN are:
  

  COE: Section C, lines 27-32 and 34
  District: Section C, lines 26-31, 33, and 35

  There were no objections to this change.
  
  
• EPA – reminder that codes are not available in SACS2012ALL software forms
  
  The SACS code combinations for the EPA resource were added in the April SACS validation table update. However, as discussed at the February meeting, the SACS2012ALL fund forms do not contain a line to which the EPA revenue, Object 8012, can extract. Therefore, LEAs that are using the SACS2012ALL software to prepare end of year projections should continue to use the workaround for reporting EPA revenues and expenditures by including them in Resource 0000 and Object 8011 for revenues, as they may have already done for first or second interim reporting. LEAs can accomplish this by locally defining Resource 1400, Object 8012 and rolling it temporarily to Resource 0000, Object 8011, or recording it directly to Resource 0000, Object 8011. Either way, LEAs that used the workaround to report EPA revenues and expenditures in their budgets at first or second interims, or end of year projections, will need to reclassify them to Resource 1400, and Object 8012 for revenues, so that it will be reported correctly in the 2012-13 estimated and unaudited actuals.
  
  
• Survey regarding use of Windows 8
  

  Participants were surveyed as to whether they have computers running the Windows 8 operating system and if so whether they have downloaded the SACS software on these computers. No one indicated they have yet to download the SACS software on a computer with this operating system.

  Once LEA staff does have experience with this the CDE would like to know the outcome, whether or not any problems are encountered.

Other Issues

• Web conference information
  

  After the February meeting participants were surveyed via e-mail to determine interest in having the SACS Forum meetings held via Web conference. There was very positive response to this proposal, as most indicated it would save travel time and costs. Some participants also expressed interest in continuing to attend in person.

  The survey originally indicated that the presentation platform would be Microsoft Live Meeting. However, the CDE also has another presentation option, WebEx, which is compatible with Mac operating systems. It was discussed that a Web conference would most likely be held via this platform since it is more compatible with various operating systems.
  
  
• Next meeting
  

  The next SACS Forum will most likely be scheduled in October. Typically a meeting isn’t scheduled during the summer months due to year end closing and auditor visits.