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SACS Forum Meeting Minutes, October 2018

Standardized Account Code Structure (SACS) meeting minutes for October 9, 2018.

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

Meeting Agenda

Announcements and Information
  • 2017–18 Unaudited Actuals (UA) Data Submissions - CDE review

  • 2019 California School Accounting Manual (CSAM)
Accounting Updates
  • Every Student Succeeds Act (ESSA) Per-pupil Expenditure (PPE) Reporting Update

  • Regional Occupational Center/Program (ROCP) Goal 6000 - continued group discussion needed

  • 2018–19 SACS Resource Codes Update

  • Discuss Closing Object 8681, Mitigation/Developer Fees to Resource 0000

  • Discuss Special Education Goals 5750 and 5770 - possible elimination or consolidation

  • Governmental Accounting Standards Board (GASB) Statement 84: Fiduciary Activities
SACS Software
  • SACS2019 Software Updates

  • SACS System Replacement
Other Updates
  • Next Meeting

Meeting Minutes

The October 9 SACS Forum PowerPoint presentation outline (Attachment A) (DOCX) is available for download.

Announcements and Information
  • 2017–18 Unaudited Actuals (UA) Data Submissions - CDE review

The Financial Accountability and Information Services (FAIS) staff are in the process of reviewing the 2017–18 unaudited actuals data submissions. Again this year, a focus of the review is the indirect cost rate calculation to ensure the rates calculated are in accordance with the CDE’s delegation agreement with the U.S. Department of Education (ED). In addition, because the UA data is available to the public and is used for several state and federal reports, the CDE wants to ensure that reported financial data is reliable, accurate, and prepared in accordance with generally accepted accounting principles.

FAIS staff may be contacting local education agency (LEA) staff with questions regarding the indirect cost rate calculation or any other financial reporting questions.

The CDE appreciates LEA staff assistance with these questions. The deadline to finalize the review is mid-December, which facilitates prompt publishing of the financial data and completion of other time-sensitive tasks, e.g., SACS financial reporting software development and county office of education First Interim reviews.

  • 2019 California School Accounting Manual (CSAM)

The CDE plans on releasing the newest edition of the CSAM in the early part of 2019. Included with updates to the procedures will be a distinct new look to the CSAM, due to the federal Section 508 accessibility requirements.

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

    The CDE briefly went over the Every Student Succeeds Act Per-Pupil Expenditure Reporting Requirement letter dated August 1, 2018, located on the CDE's Correspondence web page, which provides information and guidance that assists LEAs with meeting the ESSA PPE.

    The CDE will ultimately collect the PPE data from LEAs for inclusion in the ESSA-required State Report Card. Additional information about the criteria, collection, and presentation is forthcoming. Additionally, the CDE recommends that LEAs:

    • Use prior year financial data, e.g., 2017–18, to prepare test PPE data in order to make preliminary assessments of the outcomes and whether those outcomes meet expectations.

    • Test and evaluate approaches to allocate central expenditures to the schools, analyzing how various approaches affect school-level per-pupil expenditure amounts.

    • Anticipate questions that may be asked by the governing board, parents, and other stakeholders, and be prepared to answer them.

The CDE is working on a frequently asked questions web page that would provide additional information regarding the ESSA PPE reporting requirement. To date, the most frequent question is whether the ESSA PPE information will be reported in the School Accountability Report Card (SARC). The ESSA report card requirements are separate from the SARC. The SARC is a state-required report, which was implemented with the passage of Proposition 98, and although some federally required data elements are reported via the SARC, at this time it there are no plans to collect or report the ESSA PPE data via the SARC.

  • Regional Occupational Center/Program (ROCP) Goal 6000 - continued group discussion needed

    During CDE’s review of proposed changes to be made to the CSAM, it was noted that the CDE received an email questioning the continued use of the Regional Occupational Center/Program Goal 6000, and the possibility of consolidating it into existing Career Technical Education (CTE) goals 3800, Career Technical Education, and 4630, Adult Career Technical Education. CDE is performing preliminary research regarding the feasibility of this proposal and is seeking LEA feedback.

    As background, prior to the implementation of the Local Control Funding Formula (LCFF), LEAs were provided state categorical funding to support ROCPs. With the implementation of LCFF, the majority of the funding was transitioned into the grade 9 through 12 grade span adjustment and became unrestricted dollars that LEAs may use for any educational purpose. Subsequent to the implementation of LCFF, new state career technical education programs were implemented, e.g., Career Pathways Trust and the CTE Incentive Grant program, although none specifically targeted for ROCPs.

    The definitions of the career technical education goals and ROCP goal are very similar. Following are the CSAM definitions, for reference:

    • Goal 3800, Career Technical Education - Refers to skill areas, such as distributive education, health, home economics, industrial arts, technology, and trades, designed to prepare students for gainful employment. The Career Technical Education goal is used to track the costs of career technical education students and is not used for adult education, ROCP, or special education costs.

    • Goal 4630, Adult Career Technical Education - Refers to skill areas, such as distributive education, health, home economics, industrial arts, technology, and trades, designed to prepare adult students for gainful employment.

    • Goal 6000, Regional Occupational Center/Program - Refers to skill areas, such as agriculture, distributive education, health, home economics, industrial arts, technology, and trades designed to prepare students for gainful employment.

Because, by definition, ROCPs are career technical education programs, and there is no longer categorical funding or maintenance of effort associated with ROCPs, there now is the question of whether it is necessary to track ROCP expenditures separately from other career technical education expenditures.

If Goal 6000 was discontinued, the definitions of goals 3800 and 4630 would be changed to include ROCPs. Additionally, the Goal 4630 definition would need to be updated to include special education students that are transitioning from a special education program to an adult career technical program, including ROCPs.

It is important to note that CDE understands ROCPs continue to run strong throughout the state and is in no way dismissing the importance of the program. At this point, CDE is only doing research regarding the use of Goal 6000 from an accounting perspective. All LEA feedback and statewide financial data implications will be considered before a final decision is made.

A few participants provided feedback, which was mixed. While some indicated they agree with discontinuing Goal 6000, others prefer maintaining it, with the rationale that they want to keep ROCP support activities separate. CDE would appreciate additional feedback on this proposal. In particular, if the preference is to maintain Goal 6000, what is the rationale for keeping ROCP separate from other career technical education expenditures? Additional questions and feedback can be emailed to

  • 2018–19 SACS Resource Codes Update

CDE provided a list of resource code changes (Attachment B) (DOCX) effective 2018–19. Additional, up-to-date information regarding SACS resource codes can be found via the SACS Query online reference tool.

The new resource codes will be in the next validation table release planned for November. The tables can be downloaded from the CDE's Validation Tables web page.

CDE also announced the Excel versions of the Spreadsheets of Valid Combinations will be updated with the November table release. Due to federal Section 508 accessibility requirements, the spreadsheets were not updated in the last few releases. The information in the spreadsheets remains the same; however, the look will change due to accessibility requirements. For example, formerly blank cells now contain dashes.

  • Discuss Closing Object 8681, Mitigation/Developer Fees to Resource 0000

The CDE has received inquiries regarding whether Object 8681, Mitigation/Developer Fees should still be allowed in combination with Resource 0000, Unrestricted. GASB Statement 54 requires that resources constrained for specific purposes will always be classified as restricted regardless of the fund in which they are reported. More information regarding GASB 54 requirements for reporting fund balance in governmental funds can be found in the CDE’s New Requirements for Reporting Fund Balance in Governmental Funds letter dated January 7, 2011, located on the CDE's Correspondence web page.

As a reminder, developer fees must be deposited in Fund 25, Capital Facilities Fund. Expenditures reported in Fund 25 are restricted to the purposes specified in Government Code (GOV) sections 65970–65981 or GOV Section 65995 et seq., or to the items specified in agreements with the developer (GOV Section 66006). Therefore, developer fees deposited in Fund 25 meet the definition of restricted fund balance.

Since developer fees are restricted in regards to what they can be spent on, LEAs should use Resource 9010, Other Restricted Local, or a locally-defined resource that rolls up to Resource 9010.

After reviewing the SACS unaudited actuals data, CDE found that the majority of LEAs are reporting developer fees in Resource 0000. This is a holdover from pre-GASB 54 accounting standards and the fees should now be accounted for as restricted using Resource 9010.

To be consistent with GASB 54 standards, CDE is proposing to close Resource 0000 to Object 8681, effective 2019–20. This should allow sufficient time for LEAs to make the adjustments in their local accounting system.

A participant asked whether depositing the developer fee revenues in Fund 25, a restricted fund, automatically identifies the funding as restricted. To clarify, prior to GASB 54, that would be a correct statement. However, GASB 54 requires revenues and expenditures to be reported in the applicable classification regardless of the fund(s) in which they are reported. Even though Fund 25 is restricted to specific purposes, the fund balance still needs to be classified accordingly. Only restricted resource codes generate a restricted fund balance.

Before the code combination is closed, CDE is seeking feedback regarding whether there are any reasons why developer fees should continue to be recorded in Resource 0000, rather than Resource 9010.

Please email your feedback to

  • Discuss Special Education Goals 5750 and 5770 - possible elimination or consolidation

As discussed during the May 2017 SACS Forum meeting, CDE is considering the possible elimination or consolidation of Special Education Goals 5750 and 5770.

As background, the Special Education Maintenance of Effort Workgroup informed our office that they were actively pursuing a change to Education Code (EC) Section 56205(b)(1) to eliminate the requirement that the Special Education Local Plan Area (SELPA) annual budget plans separately identify expected expenditures for special education services to pupils with severe disabilities and low incident disabilities versus pupils with non-severe disabilities.

There has now been an amendment to EC Section 56205(b)(1) in Assembly Bill 1808. The requirement that the SELPA annual budget plans shall delineate expenditures for severe and non-severe disabilities has been eliminated. The amended language now reads:

...A description of projected total special education expenditures by local educational agency, including supplemental aids and services to meet the individual needs of pupils placed in regular education classrooms and environments and special education services to pupils with low incidence disabilities...

As a result of the amendment to EC 56205(b)(1), the CDE is again seeking feedback from LEAs on possibly consolidating or eliminating Special Education Goals 5750 and 5770. Some possible options include eliminating Goals 5750 and 5770 and establishing a new 5xxx goal code for Special Education, Ages 5–22. This is the preference of the Workgroup. Also, a new 5xxx goal code would help change the mindset of no longer viewing the goal code as severe or nonsevere. Another option is to consolidate goals 5750 and 5770 into one of those two goal codes. However, if consolidated, it is possible that it may cause confusion due to continued association with the former definitions.

Regardless of which option is ultimately selected, LEAs will have the option to set up locally defined goal codes to separately track severe and nonsevere expenditures. The anticipated timeline for implementation is the 2020–21 fiscal year. This will coincide with the roll-out of the new SELPA budget plan template that the Workgroup and Special Education program office are currently developing.

For clarification, the proposed changes to the Special Education goal codes will not impact the Maintenance of Effort calculation. Also, there will be no changes to Special Education Goal 5710, Special Education, Infants; and Goal 5730, Special Education, Preschool Students.

Participants providing feedback did not indicate a strong preference between a new goal or using one of the existing goals. One participant asked whether it would be possible to continue to use locally defined goal codes, including goals 5750 and 5770 if they are eliminated, that roll up to a new code that may be established. CDE indicated that yes, LEAs can continue to locally define codes and roll them to the new code.

Please submit feedback to

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

    GASB 84, Fiduciary Activities, was issued in January 2017 and will be effective beginning 2019–20. The new standard establishes criteria for determining whether activities should be reported as fiduciary. If there is a fiduciary responsibility, then fiduciary fund financial statements are required. In addition, agency funds are renamed custodial funds, and will require additional financial statement reporting, e.g., a statement of changes in fiduciary net position and statement of fiduciary net position. This will require CDE to expand the associated SACS fund forms to accommodate any newly required account codes.

    There are three types of fiduciary activities:

    • Fiduciary component units, including pension and OPEB arrangements

    • Pension and OPEB arrangements that are not component units

    • Other fiduciary activities

    Once fiduciary activities are identified, they should be reported using one of the following types of fiduciary funds:

    • Pension and other employee benefit trust funds (e.g., SACS Fund 71, Retiree Benefit Fund)

    • Investment trust funds (not applicable for California LEAs)

    • Private-purpose trust funds (e.g., SACS Fund 73, Foundation Private-Purpose Trust Fund)

    • Custodial funds (e.g., SACS Fund 76, Warrant/Pass-Through Fund, and Fund 95, Student Body Fund)

LEAs will continue to report trust activities in either Fund 71 or Fund 73. Fiduciary activities not held in trust will be reported in one of the custodial (formerly agency) funds.

Please refer to the SACS Forum PowerPoint presentation outline (Attachment A) (DOCX) for details of the types of fiduciary activities, financial reporting changes, SACS software changes, and considerations for implementation of GASB 84.

Further information and guidance will be provided over the next several months, as GASB issues the implementation guide and CDE determines additional SACS coding needed to record custodial fund transactions. CDE encourages LEAs to begin evaluating fiduciary activities now based on the criteria provided in GASB 84.

SACS Software
  • SACS2019 Software Updates

    • Fund Form 76, Warrant/Pass-Through Fund, and Form 95, Student Body Fund:
      Expand effective 2019–20, due to the implementation of GASB 84. This includes opening the forms to interim periods.

    • Form 01CS, Criteria and Standards Review, District LCFF Revenue Criterion 4:
      Remove Section 4A1/Step 2/Line c, “Gap Funding (if district is not at target),” due to the full implementation of LCFF effective 2019–20.

    • Form 01CS, Criteria and Standards Review, Facilities Maintenance Criterion 5/7:
      Modify the minimum contribution requirement of the Ongoing and Major Maintenance/Restricted Maintenance Account (RRMA) to three percent of the total general fund expenditures and other financing uses for school districts, and three percent of total unrestricted general fund expenditures and other financing uses for COEs, for all school facility programs.

A participant asked CDE to clarify whether the actual contribution for RRMA is based on the adopted budget expenditures or the year-end actual expenditures.

The RRMA contribution requirements per current EC 17070.75 states “total general fund expenditures… for that fiscal year.” Statute is silent regarding whether it is based on budgeted or actuals expenditures. Note that in 2001 and prior years, EC 17070.75 did state “3 percent of the applicant school district’s general fund budget for that fiscal year.” Since then, the reference to “budget” has been removed.

Because statute no longer references a district’s budget as the basis for the contribution, an assumption may be made that the contribution is based on actual, not budgeted, expenditures. CDE recommends that LEAs contact the Office of Public School Construction that administers the School Facility Program and the associated RRMA requirements.

  • SACS System Replacement

CDE has entered the system development phase of the SACS System Replacement project. The replacement system will be web based, with an anticipated release date of Spring 2021.

Other Updates
  • Next Meeting

The next SACS Forum is tentatively scheduled for February 11, 2019. The CDE is planning to offer this forum as a webinar only.

Questions:   Financial Accountability & Information Services | | 916-322-1770
Last Reviewed: Tuesday, August 22, 2023