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SACS Forum Meeting Minutes, May 2018

Standardized Account Code Structure (SACS) meeting minutes for May 16, 2018.

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

Meeting Agenda

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

  • SACS2018 Budget Software Release

  • Validation Table Update

  • California School Accounting Manual (CSAM) Update

  • New Unaudited Actuals Reporting Center
Accounting Issues
  • Every Student Succeeds Act (ESSA) Per-pupil Expenditure (PPE) Reporting Update

  • California State Teachers’ Retirement System (CalSTRS) On-Behalf Contribution

  • Governmental Accounting Standards Board (GASB) Statement 84 (GASB 84) – Fiduciary Activities

  • GASB 75 Update

  • Routine Restricted Maintenance Account (RRMA) (Resource 8150) Update
SACS2018ALL Software Update
  • Other Issues

  • CDE’s Fiscal Listservs

  • Future SACS Forum Topics/Suggestions

  • Next Meeting

Meeting Minutes

The May 16

The May 16 SACS Forum PowerPoint presentation outline (Attachment A) (DOCX) is available for download.

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

The 2018–19 approved indirect cost rates have been posted and can be found on the CDE’s Indirect Cost Rates (ICR) web page.

  • SACS2018 Budget Software Release

The SACS2018 budget financial reporting software has been released and is available for download from the CDE’s Financial Reporting web page.

  • Validation Table Update

A validation table update was released April 27, 2018. The tables are available for download and can be found on the CDE’s SACS Valid Codes and Combinations web page.

The CDE is working on providing current versions of the spreadsheets of valid combinations that will meet the accessibility requirements of the federal Section 508 Rehabilitation Act of 1973 and anticipates posting them to the SACS Valid Codes and Combinations web page in the near future.

  • California School Accounting Manual (CSAM) Update

The CDE is working on the next edition of the CSAM. The updated CSAM is scheduled to be completed by late 2018 or early 2019. This update will include formatting changes that meet the accessibility requirements of the federal Section 508 Rehabilitation Act of 1973.

  • New Unaudited Actuals Reporting Center

Annually, each COE is required to complete the "Charter School Unaudited Actuals Reporting Status" and “Request for SACS eTransfer Access” forms and return them by mail to CDE.

In prior years, these forms were sent as an attachment to the email announcement for the ALL release of the SACS software. This year, Financial Accountability and Information Services has created the Unaudited Actuals Reporting Center web application. This application provides a convenient single point of access for each COE to complete and submit both the Charter Schools Unaudited Actuals Reporting Status and the Request for SACS eTransfer Access forms to the CDE electronically. The Request for SACS eTransfer Access form will still need to be printed, signed and sent to the CDE.

The instructions for accessing this new application will be attached to the software release email sent to all County Chief Business Officials in July.

Accounting Issues
  • Every Student Succeeds Act (ESSA) Per-pupil Expenditure (PPE) Reporting  Update

CDE provided background information and shared progress on the development of guidance on the ESSA per-pupil expenditure reporting requirement. Please refer to the SACS Forum PowerPoint presentation outline (Attachment A) (DOCX) for details of the information provided.

  • California State Teachers’ Retirement System (CalSTRS) On-Behalf Contribution

CalSTRS on-behalf contribution information was updated in April 2018 and can be found on the CalSTRS 67–68 Frequently Asked Questions web page External link opens in new window or tab. in the On-Behalf Contributions section.

Due to the implementation of GASB 85, Omnibus 2017, guidance regarding the recognition of on-behalf contributions in modified accrual basis governmental fund financial statements, LEAs are now required to calculate two on-behalf contribution amounts:

  1. The LEA’s proportionate share of the State’s on-behalf contribution, reported in the LEA’s governmental fund financial statements pursuant to GASB 85.

  2. The LEA’s proportionate share of the State’s total proportionate share of State Teachers’ Retirement Plan (STRP) collective pension expense, reported in the LEA’s government-wide financial statements pursuant to GASB 68.

CalSTRS provides one example calculation for each of the required on-behalf contribution amounts. CalSTRS will annually update the STRP collective pension expense and the total state contributions to CalSTRS provided in the calculation examples.

(Note that subsequent to the May 16 SACS Forum meeting, CalSTRS updated the GASB 85 on-behalf contribution example by using 2017–18 as the reporting year instead of 2016–17.)

Once LEAs calculate their proportionate share of the State’s on-behalf contribution amount in accordance with GASB 85, LEAs can use the CDE’s STRS On-Behalf Analysis Spreadsheet Application to create the journal entry to record the on-behalf amount by fund, goal, and function. Use of this spreadsheet application by LEAs is optional. The spreadsheet application can be downloaded from CDE’s Correspondence web page.

Since the LEA’s proportionate share of the State’s on-behalf contribution reported in governmental funds (pursuant to GASB 85) is not equal to its accrual-basis proportionate share of the State’s proportionate share of the STRP collective pension expense reported in the government-wide financial statements (pursuant to GASB 68), a conversion entry is necessary. The following example illustrates the relationship between the two on-behalf contribution amounts and the conversion entry CE025, State’s Share of Pension Expense – Special Funding Situation, in the government-wide reporting functionality of the SACS software.

Assume for the 2017–18 reporting year, the LEA calculates the following on-behalf contribution amounts in accordance with the methods provided by CalSTRS:

  • $800,000, pursuant to GASB 68
  • $3,000,000, pursuant to GASB 85

The LEA records $3,000,000 in the LEA’s applicable governmental funds by debiting OPEB expenditures and crediting revenue. To reflect the appropriate on-behalf contribution amount in the government-wide financial statements pursuant to GASB 68, conversion entry CE025 is used to adjust for the $2,200,000 difference between the on-behalf contribution amounts ($3,000,000 - $800,000) by debiting revenue and crediting expenses by function.

  • Governmental Accounting Standards Board (GASB) 84 – Fiduciary Activities

    GASB 84, Fiduciary Activities, was issued in January 2017 and will be effective beginning 2019–20.

The new standard addresses:

  • How to categorize fiduciary activities for financial reporting.
  • How to report fiduciary activities.
  • When to disclose liabilities to beneficiaries.

There are four types of fiduciary funds:

  • Pension (and other employee benefit) trust funds
  • Investment trust funds
  • Private-purpose trust funds
  • Custodial funds

Currently, the following fiduciary funds have been established and defined in SACS:

  • Fund 71, Retiree Benefit Fund
  • Fund 73, Foundation Private-Purpose Trust Fund
  • Agency Funds – Fund 76, Warranty/Pass-Through Fund and Fund 95, Student Body Fund

Proposed SACS changes:

  • Rename agency funds as custodial funds
  • Establish a new fund – investment trust funds

Investment trust funds are used to report fiduciary activities from the external portion of investment pools and individual investment accounts that are held in a trust. The CDE is seeking feedback regarding whether LEAs maintain investment trust funds in order to determine if there is a need to develop a new fund for this purpose. Please email feedback to SACSINFO@cde.ca.gov.

  • GASB 75 Update

    CDE discussed the upcoming guidance to be issued, in the form of frequently asked questions, regarding accounting for GASB 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The provisions of this statement are effective beginning 2017–18.

GASB 75 supersedes the provisions of GASB 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions. The new accounting and reporting requirements for postemployment benefits other than pensions (OPEB) provided in GASB 75 parallel the changes for pension plan financial reporting included in GASB 67 and 68. A key provision of GASB 75 is that it separates funding and financial reporting, and requires separate actuarial valuations for accounting and funding purposes. In addition, the annual required contribution that was the basis for charging OPEB expenditures to programs no longer exists under GASB 75.

Please refer to slides 19 through 28 of the SACS Forum PowerPoint presentation outline (Attachment A) (DOCX) for details of the guidance discussed, which includes determining OPEB expenditures and charging those expenditures to programs on the basis of whether the OPEB plan is administered through a qualifying trust.

The full GASB 75 statement can be downloaded from the GASB web site External link opens in new window or tab..

  • Routine Restricted Maintenance Account (RRMA) (Resource 8150)

During the February 2017 SACS Forum, the CDE provided guidance regarding Prop 51 funds and the Routine Restricted Maintenance Account (RRMA). Confirming with the Office of Public School Construction (OPSC), CDE’s guidance was that the 3 percent contribution would be made the fiscal year after the LEA received the funds.

There have been subsequent interpretations regarding the applicable year in which the 3 percent contribution should be made, with the most recent being that the full contribution should be made in the year funds are received.

UPDATE: Subsequent to the May 16 SACS Forum meeting, clarification was received that the 3 percent contribution must be made in the same fiscal year that the LEA receives Proposition 51 funds, but that requirement does not take effect until 2018-19. Therefore, LEAs that receive funding in 2017-18 will make the 3 percent contribution no later than 2018-19.

As a reminder, all LEAs will be required to make the required 3 percent contribution with the full implementation of the Local Control Funding Formula (LCFF) in 2019–20.

SACS2018ALL Software Update

The CDE anticipates releasing the SACS2018ALL Software during the first week of July. Please see the SACS2018ALL proposed software modifications (Attachment B) (DOCX).

Other Issues
  • CDE’s Fiscal Listservs

    Below is a helpful list of fiscal-related email distribution lists maintained by the CDE. To be added to a listserv, send a blank email to the applicable email address provided in each item.

    • SACS Forum – Subscribers will receive an email notification of future meetings and notification of meeting minutes as they are posted to the web.
      join-sacs-forum@mlist.cde.ca.gov

    • SACS Updates – Subscribers will receive an email notification regarding SACS Software releases, and updates made to SACS validation tables.
      join-sacs-update@mlist.cde.ca.gov

    • Principal Apportionment Section – Subscribers will receive an email notification regarding Principal Apportionment Data Collection Software releases, key deadlines, reminders of due dates for submission of data, and any other pertinent topics related to the Principal Apportionment.
      join-pase-contacts@mlist.cde.ca.gov

    • LCFF – Subscribers will receive programmatic and implementation updates regarding Local Control Funding Formula and the Local Control and Accountability Plan.
      join-lcff-list@mlist.cde.ca.gov

    • Federal Cash Management (FCM) – Subscribers will receive an email notification with updates regarding the Federal Cash Management.
      join-federalcashmanagement@mlist.cde.ca.gov

  • Future SACS Forum Topics/Suggestions

The CDE reminded participants that they may submit future SACS Forum topics and suggestions by sending an email to sacsinfo@cde.ca.gov.

  • Next Meeting

The next SACS Forum is tentatively scheduled for October 2, 2018. The CDE is planning to offer this forum as a webinar only.

Questions:   Financial Accountability & Information Services | sacsinfo@cde.ca.gov | 916-322-1770
Last Reviewed: Monday, August 5, 2019