SACS Forum Meeting Minutes, May 2026

Meeting held via webinar

Meeting Agenda

Announcements and Information

• Staff Updates

• SACS 2026–27 Budget Release

• 2026 Bid Threshold Adjustment and Parent Liability

• Every Student Succeeds Act (ESSA) Per-Pupil Expenditure (PPE) Reporting & School Level Finance Survey (SLFS) Updates

• Local Educational Agency (LEA) Approved Indirect Cost Rates Posted

• 2024–25 Unaudited Actuals (UA) Submissions — Observations

Accounting Updates

• Newly Required Object Codes for Separate Accounting for Assembly Bill (AB) 218 & AB 452 Claims

• Fund 30 Updates: Implications of New Education Code (EC) 17037

• Review of Funds 21, 49, 51, and 52 Applicability to Charter Schools

• Form Certification Signature Requirements by Reporting Period

SACS Financial Reporting

• Forms Redesign

• Unaudited Actuals (UA) Expected Release Date

Next Meeting

Meeting Minutes

Announcements and Information

Staff Updates

The CDE announced that a new consultant, Cristina Bardasu, was recently hired in the Fiscal Oversight and Support Office.

SACS 2026–27 Budget Release

The SACS Web financial reporting system was updated for 2026–27 Budget reporting on April 23, 2026. This release included the latest validation table updates, also released April 23.

2026 Bid Threshold Adjustment and Parent Liability

The Bid Threshold for Contracts Awarded by School Districts was adjusted by 3.772 percent to $119,100.

The Liability Limit of Parent or Guardian for Willful Pupil Misconduct was adjusted by 3.772 percent to $26,000.

Both thresholds were updated on December 08, 2025. Letters are posted on California Department of Education (CDE) Correspondence web page.

Every Student Succeeds Act (ESSA) Per-Pupil Expenditure (PPE) Reporting & School Level Finance Survey (SLFS) Updates

The submission window for ESSA PPE and SLFS closed in March. CDE staff is currently reviewing the submitted data and reaching out to LEAs with questions and to correct submitted data. CDE appreciates prompt responses from the local educational agencies (LEAs).

ESSA PPE Data will be sent to the Local Agency Accountability Report Card (LARC) team for inclusion in each LEA’s LARC in June. SLFS data will be submitted to the US Census Bureau later this year.

Local Educational Agency (LEA) Approved Indirect Cost Rates Posted

The 2026–27 approved indirect cost rates have been published and can be found on the CDE’s Indirect Cost Rate (ICR) web page.

2024–25 Unaudited Actuals (UA) Submissions — Observations

The CDE provided a list of accounting and reporting observations (DOCX) after reviewing the unaudited actual data for the 2024–25 fiscal year.

The following are a few common errors the CDE continues to see that drive unusually high indirect cost rates and require adjustments to unaudited actuals submissions:

• Centralized data processing costs are often recorded under Function 7200, Other General Administration. They should be recorded to Function 7700, Centralized Data Processing.
• Postemployment benefits other than pensions (OPEB) expenditures are sometimes recorded entirely or disproportionately in Function 7200, rather than being properly allocated among all activities.
• Charter management organization fees are occasionally charged entirely to Function 7200. Instead, the fees should be charged to those function(s) that best reflect the activity, such as Function 2100, instructional administration, Function 2700, school administration, or Function 3xxx, pupil services.

The CDE highlighted the fact that all Technical Review Check (TRC) Explanations are now published with the dataset submissions in the SACS Data Viewer . All TRC exceptions must be adequately explained and should be informative, reasonable, accurate, and appropriate.

The CDE provided examples of inadequate/insufficient TRC explanations that the CDE received during the UA reporting period. The TRC explanations included: “Will clear at First Interim”, “Adjustment” or “Adj”, “n/a”, or simply a “.”.  Thorough, meaningful TRC explanations are being requested for all Warning severity TRCs.

Accounting Updates

Newly Required Object Codes for Separate Accounting for Assembly Bill (AB) 218 & AB 452 Claims

This is a recap on Education Code (EC) 41011.1:

EC 41011.1, established by Section 16 of Assembly Bill (AB) 121 (Chapter 8, Statutes of 2025), requires that the accounting systems used by LEAs to record financial data must include a separate accounting of expenditures for actual payments related to legal settlements, judgments, or special assessments made through a joint pooling arrangement, resulting from claims pursuant to AB 218 (Chapter 861, Statutes of 2019) and AB 452 (Chapter 655, Statutes of 2023), and civil claims that are not captured pursuant to AB 218 and AB 452.

Four new SACS object codes were developed:

• Object 5480 – special assessments by a joint pooling arrangement to address liabilities resulting from claims pursuant to AB 218/452.
• Object 5490 – special assessments by a joint pooling arrangement to address liabilities resulting from civil claims that are not captured pursuant to AB 218/452.
• Object 5880 – actual payments of legal settlements or judgments resulting from claims pursuant to AB 218/452.
• Object 5890 – actual payments of legal settlements or judgments resulting from civil claims that are not captured pursuant to AB 218/452.

The following are the key financial reporting requirements associated with these new object codes:

• These new codes were included in the April 23 validation table update, so they are now part of the standard SACS structure and can be reported in the SACS Web System. They are now available for use beginning with the 2025–26 unaudited actuals and will also apply to the 2026–27 budget reporting period.
• It’s important to note that LEAs should start using these new codes in the current year to ensure consistent tracking and statewide reporting.
• Another important point is that these codes must be reported independently as separate accounts. They should not be rolled up into any other SACS object codes, as doing so would reduce the transparency these codes are intended to provide and will result in non-compliance with the new statute.
• Finally, for the 2025–26 unaudited actuals submission, LEAs should review and reclassify expenditures if necessary, making sure that any applicable expenditures are reported using these new object codes.

The reclassification of expenditures may be required because during 2025–26 budget and interim reporting period, these four new codes were not included in the SACS Web System. At that time, CDE recommended LEAs continue to report settlement payments and/or special assessments using then existing codes (i.e., Object 5400, Insurance, and/or Object 5800, Professional Consulting Services and Operating Expenditures). Therefore, the CDE reminds LEAs to reclassify expenditures to these new codes for 2025–26 unaudited actuals data submission before closing the books for 2025–26.

Please note that there is significant interest in obtaining data related to AB 218/452 expenditures, particularly from the Legislature.

For presentation on SACS Web fund forms, the new object codes will not be displayed separately on the fund forms. Instead, objects 5480 and 5490 will be included in the “Insurance” line, and objects 5880 and 5890 will be included in the “Professional/Consulting Services and Operating Expenditures” line on the fund forms.

The following questions were raised at the meeting:

Question 1: Are these object codes available for Fund 67?

CDE Answer: The four new object codes are open to Fund 67.

Question 2: For the special assessment by JPAs, does that mean for example if we received a bill from an older liability group contract when we did business over 20 years ago, and they are asking for a funding not for a specific claim but for potential claims due to estimates on their end, that would be 5480, correct? We are self-insured except we do pay for extra insurance to cover over a specific dollar amount.

CDE Answer: If the joint powers authority (JPA) referenced is the School Excess Liability Fund (SELF), the CDE has determined that Object 5480 is the appropriate code to use when recording the special assessment. This determination is based on the fact that SELF’s special assessment invoices are explicitly designated to address funding needs related to ongoing liabilities associated with AB 218.

Question 3: Is there a recommended Function Code for the SELF payments?

CDE Answer: The CDE has determined that Function 7200 should be used when recording the SELF payments.

Fund 30 Updates: Implications of New Education Code (EC) 17037

EC 17037, added by Section 12 of AB 121 (Chapter 8, Statutes of 2025), provides that any funds remaining in a county school lease‑purchase fund for a school district on and after January 1, 2026—including any interest earned—are not required to be reported to or returned to the state and may be used by the school district for capital outlay expenditures for school construction.

This new statute has an impact on Fund 30, State School Building Lease-Purchase Fund, that was originally established to account for these lease-purchase activities and is held within the county treasury for each county.

Based on the 2024–25 unaudited actuals submissions, a total of 34 LEAs reported balances in Fund 30. Together, these LEAs reported a combined balance of $8,108,897. However, it’s important to note that the balances vary widely ranging from as little as one cent to $2,443,938.76.

Upon closer examination of how those funds are distributed, it can be observed that the balances are highly concentrated. In fact, just six LEAs account for more than 97% of the total balance. Breaking that down further:

• Five LEAs reported balances in Resource 7710, State School Facilities Projects, with a combined total of $6,998,478.
• And one LEA reported a balance in the unrestricted resource, totaling $899,284.

While small or minimal balances are held by many LEAs, the majority of funds are held by a very small number of LEAs. This concentration should be kept in mind when the impact under EC 17037 is considered, particularly for those LEAs with more significant balances.

Based on the 2024–25 unaudited actuals data, interest earnings were the primary—and in most cases, the only—revenue source reported by nearly all LEAs; however, two LEAs reported additional revenues besides interest earnings:

• One LEA reported revenue in Object 8545, School Facilities Apportionments, and recorded an interfund transfer using Resource 7710.
• Another LEA also reported revenue in Object 8545 under Resource 7710.

These situations are important to highlight because the use of Object 8545 in combination with Resource 7710 may warrant further review. Specifically, no LEA has received a new apportionment under the 1976 Lease-Purchase Law since November 4, 1998.

As a result, LEAs should review these specific revenue transactions and confirm whether the resource-object combination was appropriate.

Finally, from a broader policy perspective, the CDE is currently considering the closure of Fund 30, in alignment with the new provisions under EC 17037.

The CDE is actively requesting feedback, so this is an opportunity for LEAs to provide input, especially if they have balances or ongoing activity in this fund.

Review of Funds 21, 49, 51, and 52 Applicability to Charter Schools

As part of ongoing efforts to ensure consistency and relevance in financial reporting, fund usage across charter schools that report independently of their authorizing agencies, along with relevant laws and regulations, has been reviewed by the CDE.

Through this review, CDE has determined that several funds are not applicable for charter schools.

The funds identified as not applicable are:

• Fund 21 – Building Fund
• Fund 49 – Capital Projects Fund for Blended Component Units
• Fund 51 – Bond Interest and Redemption Fund
• Fund 52 – Debt Service Fund for Blended Component Units

To validate this determination, the CDE conducted a review of unaudited actuals submissions over three fiscal years: 2022–23, 2023–24, and 2024–25.

The review confirmed that no charter schools reporting independently to CDE recorded any activity in these funds during this period.

The CDE is proposing to close Fund 21, Fund 49, Fund 51, and Fund 52 for charter schools. This proposal aims to simplify the chart of accounts and ensure that only relevant funds remain available to charter schools.

The proposed implementation timeline is as follows:

• Begin with the 2027–28 budget period, and
• Continuing implementation in subsequent fiscal years

This timeline allows for adequate planning, communication, and system updates prior to the change taking effect.

The CDE is seeking feedback on the proposal to close these funds to charter schools.

Form Certification Signature Requirements by Reporting Period

The form certification signature requirements completed at all reporting periods, all have the same reporting signature requirement, which is an original signature.

It is currently left up to the LEA and the oversight entity to determine if they will accept a wet (pen to paper), scanned, or electronic signature as this is not defined in Education Code. The original document should be kept on file following LEA’s retention policies. It is important that the appropriate parties have signed the form and that the board meeting approving the budget, interim or unaudited actuals report has occurred after the SACS Web System printed date on the certification form.

Following the SACS Forum discussion, CDE offers the following clarifications:

• It should be recognized that many LEAs have adopted procedures to use electronic signatures in lieu of wet (pen to paper) signatures, as permitted by Government Code Section 16.5. Therefore, an electronic signature is considered equivalent to an original signature.
• The retention of original documents is subject to applicable regulations, such as Title 5, California Code of Regulations, Section 59023.

The following questions were raised at the meeting:

Question 1: Signature date must be on or after Board meeting date?

CDE Answer: The signature date must be on or after the board meeting date.

Question 2: Is it up to the COE if they require an original signature?

CDE Answer: The original signature is required.

Question 3: Is the electronic signature considered an original signature?

CDE Answer: For purposes of SACS Web forms, the electronic signature is considered an original signature, assuming that the LEA’s policies do not prohibit its use.

SACS Financial Reporting

Forms Redesign

The SACS Web System is undergoing redesign to ensure that all of the SACS forms and reports are brought into compliance with standards for accessible design. The work began in July 2025 by a dedicated team of developers, with work estimated to go through June 2027. SACS Web users will see existing forms and reports in a redesigned format during this time period.

The SACS Web System released the Workers’ Compensation Certification (Form CC) released with the 2026–27 Budget Release. The Charter School Alternative Form is currently planned for the 2025–26 Unaudited Actuals Release.

The Charter School Alternative Form planned updates include:

• A new Cover Page provided with Excel and PDF versions for an accessible document layout.
• Larger fonts and other accessibility improvements.
• Federal ESSA Maintenance of Effort (MOE) Requirement presented on a separate page on the Excel and PDF versions.
• Updated wording on the Internal Form Check (IFC) messages.
• No content changes to the existing form.

The rollout of additional SACS Forms is still to be determined.

The CDE answered questions about availability of Excel versions of SACS Forms. Once implemented, the following forms will not be available in the Excel format, based on evaluation of LEA needs through recent surveys and available resources for SACS Web maintenance:

• Form CB – Budget Certification
• Form CC – Workers’ Compensation Certification
• Form CI – Certification of Interim Report
• Form CA – Unaudited Actuals Certification
• Form SEAS – Special Education Revenue Allocations Setup (SELPA Selection)

Unaudited Actuals (UA) Expected Release Date

The 2025–26 Unaudited Actuals Reporting Period is expected to be released the first week of July.

Next Meeting

The next SACS Forum is tentatively scheduled for Tuesday, November 3, 2026. The CDE is planning on offering the forum via webinar only.

To receive email notification of future meetings, meeting handouts, and notice when meeting minutes and recordings are posted to the web, please send a blank message to join-sacs-forum@mlist.cde.ca.gov to subscribe to the sacs-forum mailing list.