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SACS Forum Meeting Minutes, November 2022

Standardized Account Code Structure (SACS) November 08, 2022 meeting minutes.

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

Meeting Agenda

Announcements and Information

Accounting Update

SACS Financial Reporting

Other Updates

Meeting Minutes

Announcements and Information

2021–22 Unaudited Actuals (UA) Data Submissions – CDE Review.

In November CDE will begin the process of reviewing the 2021–22 unaudited actuals data submissions.

A focus of the review will be LEA indirect cost rate calculations, which will provide the rates to be used in 2023–24. The review is to ensure the rates calculated are in accordance with the CDE’s delegation agreement with the U.S. Department of Education (ED). In addition, the CDE wants to ensure the financial data is accurate, consistent and reliable.

CDE staff may contact LEA staff with questions regarding the indirect cost rate calculation or any other financial reporting questions. CDE appreciates LEA staff timely assistance with these questions in order to ensure the statewide financial data will be published in a timely manner.

Staff Updates

CDE announced that a new consultant, Julie Hoang, was recently hired in the Financial Accountability and Information Services Office.

Accounting Updates

Home to School Transportation Expenditure Reporting

The Home to School Reimbursement program was established pursuant to Education Code Section 41850.1, added by AB 181 (Chapter 52, Statutes of 2022), and amended by Assembly Bill (AB) 185 (Chapter 571, Statutes of 2022). This program allows for school districts and County Offices of Education that provide transportation services to be eligible for funding. Charter schools are not eligible to receive these funds and neither is a school district that converted all of its schools to charter schools. Funding is based on 60% of eligible transportation expenses, determined by function 3600, reported in the Unaudited Actuals data of the prior fiscal year less any LCFF Add-On Amount. For example, the distribution of funds for FY 2022–23 is scheduled for June 2023 and will use Unaudited Actuals expenditures from FY 2021–22. A website with additional program information including Frequently Asked Questions is being developed. For program questions please contact the CDE Transportation Office their email address is

Once these funds are received it is recommended for LEA’s to record the receipt of these funds with Resource 0000 and object revenue code 8590.

Expenditures that are excluded for reimbursement are capital outlay and nonagency expenditures. CDE will remove from the calculation expenses coded with Object Codes 6000–6999 and Goal Codes 7100–7199. It is highly recommended for LEA’s to record expenditures with the proper coding to prevent audit findings. For additional information of what constitutes these expenditures please review Procedures 320 and 330 within the California School Accounting Manual (CSAM).

For information about allowable expenditures associated with this program please review CSAM Procedure 325 – Function 3600 (pg. 325–21).

Every Student Succeeds Act (ESSA) Per-Pupil Expenditure (PPE) Reporting Update

The Federal ESSA PPE reporting requirement remains in effect for all public schools in California. LEAs will be receiving access codes to enter data for ESSA PPE Reporting by the beginning of December. LEAS will have until March 1, 2023 to enter their 2021–22 data into the portal. The CDE will be holding webinars in January to review ESSA PPE requirements.

For further information, please see the ESSA PPE web page at ESSA Per-Pupil Expenditure (PPE) Reporting.

School-Level Finance Survey (SLFS)

The National Center for Education Statistics (NCES), with support from the US Census Bureau, is proposing a new financial reporting requirement, the School Level Finance Survey (SLFS), mandatory for all 50 states to aid with public concerns regarding equitable distribution of school-level funding within and across school districts.

The proposed data collection will be required beginning this year, using 2021–22 school year data.

For the current year collection, using school year data 2021–22, the CDE will utilize the ESSA per-pupil expenditure data we receive from LEAs to fulfill the requirement. In the past, the CDE has recommended that LEAs use enrollment when calculating their ESSA PPE amounts. However, since some LEAs use average daily attendance (ADA) to calculate the amount, we will instruct LEAs to use the Fall 1 Enrollment figure as the divisor in calculating the ESSA PPE. Therefore, for those LEAs that currently use ADA, this should be the only impact for this year’s collection.

CHANGE: Instead of using the Fall 1 enrollment figure, the CDE will instruct LEAs to use the cumulative enrollment figure.

The impact on LEAs comes in next year’s reporting period, which will utilize the school year 2022–23 data. The proposed requirement has a few different elements that are needed.

To satisfy the current year requirement, the CDE will collect the total current expenditure amount by school level. Currently, LEAs have this amount when calculating the ESSA PPE amount.

A few additional elements will be needed at a school level for the future year requirements.

Those include total expenditures broken down into four functions: Instruction, Student Support Services, Instructional Staff Support, and School Administration.

Plus, the NCES is proposing to include three exhibits

  • Teacher salaries (within the Instruction function broken down by Salaries and Benefits)
  • Instructional aide salaries (within the Instruction function)
  • Books and periodicals (within the Instruction and Instructional Staff Support Services functions)

The CDE is looking at different options to collect the data, which would begin in Fiscal Year (FY) 2023, using the current 2022–23 school year. The CDE may modify the ESSA PPE reporting application to collect this information.

The CDE had a brief period to comment on the proposed regulations and had a few questions that CDE asked during the SACS Forum:

  1. The expanded SLFS reporting requirements are effective for FY 2023 reporting (School Year 2022–23). This information would be collected by CDE between Winter 2023 to Spring 2024. Do you foresee any impediments to LEAs being able to furnish this data?

  2. Will LEAs need to make any significant changes to their local financial systems?

  3. Will charter schools be able to report this information that does not utilize SACS reporting?
Governmental Accounting Standards Board (GASB) Statement 96 – Subscription-Based Information Technology Arrangements (SBITA) Update

GASB Statement 96 is effective 2022–23. Refer to the last several SACS Forum meeting minutes for previous discussions, including SACS account code changes and accounting guidance regarding GASB 96.

Exclusion from GASB 96

The following are not considered SBITAs for purposes of GASB 96:

  • Perpetual software licenses – be aware that these arrangements may sometimes be labeled as “subscriptions” because of installment plan; but they do not meet the definition.
  • Contracts that solely provide IT support services – similar to maintenance services in a lease.
  • Governments that act as vendors in SBITAs.

Accounting for Short-term SBITAs

  • Short-term SBITAs have a maximum possible term of 12 months.
  • Subscription payments are recognized as outflows of resources, i.e., expense/expenditure.
  • There are no specific disclosure requirements for a short-term SBITA.

Accounting for SBITAs other than short-term SBITAs (for financial statements prepared using the current financial resources measurement focus)

  • Initial recognition and measurement
    • Report an expenditure and other financing source in the period the subscription asset is initially recognized.
    • The expenditure and other financing source should be measured according to GASB 96 paragraphs 16–18.
    • Recognize a subscription liability (GASB 96 paragraphs 16–18) and a subscription asset (GASB 96 paragraph 25).

  • Subsequent recognition and measurement
    • Subscription payments should be allocated first to the calculated interest liability and then to the subscription liability.
    • Subscription asset be amortized in a systematic and rational manner over the shorter of the subscription term or the useful life of the underlying IT assets.

Measurement of the Subscription Asset

SBITAs are very similar to lease assets, except that certain capitalizable implementation costs also included with a SBITA.

Following are types of implementation costs and their treatment:

  • Preliminary project stage – expense as incurred
  • Initial implementation stage – capitalize these costs
  • Operational and additional implementation stage – expense as incurred

New SACS object codes

Due to the new SBITA asset and liability reporting requirements, the following object codes will be added to allow LEAs to report SBITAs separately from other capital assets:

Expenditures – Capital Outlay (Objects 6000–6999)

  • Object 6700, Subscription Assets
  • Object 6920, Amortization Expense—Subscription Assets (for proprietary and fiduciary funds only)

All Other Financing Sources (Objects 8930–8979)

  • Object 8974, Proceeds from SBITAs

Capital Assets (Objects 9400–9489)

  • Object 9470, Subscription Assets*
  • Object 9475, Accumulated Amortization—Subscription Assets*

Long-Term Liabilities (Objects 9660–9669)

  • Object 9660, Subscription Liability*

    *For proprietary and fiduciary funds only

The new SBITA object codes and associated code combinations will be available in the SACS Web System starting with the 2023–24 budget reporting period for 2022–23 estimated actuals and 2023–24 adopted budget data types.

Implementation considerations

The GASB has not issued an implementation guide for SBITAs. GASB Implementation Guide 2019-3, Leases, may be used as a reference since SBITAs are similar to leases.

GASB 99, Omnibus 2022 External link opens in new window or tab. (PDF), has three paragraphs regarding SBITAs:

  • Paragraph 23 – subscription term
  • Paragraph 24 – reclassification of short-term SBITAs
  • Paragraph 25 – subscription liability
California Schools Healthy Air, Plumbing, and Efficiency Program – (CalShape) Grant Coding

The CDE recommends LEAs record the CalShape Grant funds using Resource 9010, Other Restricted Local, with Revenue Object 8699, All Other Local Revenue.

The rationale is typically, when funding is administered by another state agency, CDE assigns Resource 7810. However, since the CalShape Grant is funded by gas and electrical companies, although administered by the California Energy Commission, Resource Code 9010 (Other Restricted Local) seems most appropriate.

SACS Financial Reporting

SACS Web-based Financial Reporting System (SACS Web System)
  • The 2022–23 first interim financial reporting functionality was released on November 1.
  • Known issues and workarounds, if available, are posted on the SACS Web System Dashboard as they become known.
  • SACS Web System training resources, including the presentation materials and a recording from the October 2022 tips and answers to frequently asked questions webinars, are available on the SACS Web Training Materials and Recorded Sessions Links External link opens in new window or tab. web page.
  • 2022–23 second interim financial reporting functionality is expected to be available in mid-January 2023.
Update to Program by Resource Report (Report PGM)

CDE updated the Indirect Costs as a Percentage of Eligible Expenditures section to include the exclusion of Object 4700 (Food Costs) to reflect similar change made to the Form ICR Indirect Cost Worksheet and Exhibit A, Indirect Cost Rates Charged to Programs, effective fiscal year 2021–22. In the Expenditures and Other Financing Uses section, expenditures for Object 4700 (Food Costs) will be shown on a separate line instead of being included with the Books and Supplies 4000–4999 object code range.

Criteria and Standard: Criterion 7 – Facilities Maintenance – Routine Restricted Maintenance Account (RRMA) Exclusions Update
  • 2022–23 1st and 2nd Interims – applicable to District’s Form 01CSI only

The following resource codes will automatically be excluded from the RRMA calculation: 3210, 3212, 3213, 3214, 3215, 3216, 3218, 3219, 5316, 7027, and 7690.

Pursuant to Assembly Bill 130, Section 119 (Statutes of 2021), there were added resource codes that were not included in the RRMA exclusion calculations when developing the SACS Web 2022–23 application. Districts will need to manually exclude resources 3225, 3226, 3227, 3228, 5632, 5633, and 5634 from the RRMA calculation for 1st and 2nd interims. If districts already completed their 1st interim and is in the workflow review/approval process, they do not have to revise it as the corrections can be made at 2nd interim. Please note the compliance of the RRMA is measured against the total general fund expenditures as of Unaudited Actuals.

Districts can override the “Required Minimum Contribution” field (Line 1) to manually exclude the additional resource codes at 1st and 2nd interims.

  • Proposed SACS Web 2023–24 Budget Period – applicable to District’s Form 01CS only

The following resource codes will be automatically excluded from the RRMA calculation: 3212, 3213, 3214, 3216, 3218, 3219, 3225, 3226, 3227, 3228, 5316, 5632, 5633, 5634, 7027, and 7690. Districts won’t need to do any workarounds or manual exclusions. Please note resource codes 3210 and 3215 will be removed from the RRMA exclusion beginning in SACS Web 2023–24. The expenditures and liquidation period ends in fiscal year 2022–23.

Other Updates

Next Meeting

The next SACS Forum meeting is tentatively scheduled for February 14, 2023. CDE is again planning on offering the forum via webinar only. Meeting information can be found on the SACS Forum Upcoming Meetings web page.

Questions:   Financial Accountability & Information Services | | 916-322-1770
Last Reviewed: Friday, June 14, 2024