ACCOUNTING ISSUES AND CODING EXAMPLES

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ACCOUNTING ISSUES AND CODING EXAMPLES

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Title: ACCOUNTING ISSUES AND CODING EXAMPLES

1
ACCOUNTING ISSUES AND CODING EXAMPLES

Kathy Guralski, Auditor, School Finance Team
Wisconsin Department of Public Instruction
2007

2
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This presentation is the second webcast that will
focus on reporting by public elementary and
secondary schools in the State of Wisconsin.
The first webcast focused on the Wisconsin
Uniform Financial Accounting Requirements WUFAR
This second webcast will provide you with
examples of revenue accounting transactions and
how to properly account for them
The third webcast will provide you with examples
of expenditure accounting transactions and how to
properly account for them

4
ACCOUNTING ISSUES AND CODING EXAMPLES

http//www.dpi.state.wi.us/sfs/wufar.html

5
REVENUE CODING

SOURCE CODES
TRANSFERS IN FROM ANOTHER FUND (SOURCE 100)
LOCAL (SOURCE 200)
A WI DISTRICT (SOURCE 300)
DISTRICT OUTSIDE WI (SOURCE 400)
INTERMEDIATE EDUCATIONAL AGENCY (SOURCE 500)
STATE AGENCY (SOURCE 600)
FEDERAL AGENCY (SOURCE 700)
OTHER FINANCING (SOURCE 800)
OTHER REVENUES (SOURCE 900)

6
SOURCE 100INTERFUND TRANSFERS

Only certain funds are allowed to make transfers
to other specific funds
Operating Transfers
An operating transfer is used to subsidize
activities in another fund
Must be used with function 411000
Indirect Cost Transfers
An indirect cost transfer is used for payment to
the districts general fund for administrative
and other indirect charges
Must be used with function 418000
Residual Balance Transfers
A residual balance transfer is used to close out
the fund balance in the fund sending the transfer
Must be used with function 419000

7
SOURCE 100INTERFUND TRANSFERS

Most common operating fund transfers
Transfer from fund 10 to fund 27 (27R 411000
110)
Transfer from fund 10 to fund 38 (38R 411000
110)
Transfer from fund 10 to fund 50 (50R 411000
110)
Transfer from fund 10 to fund 99 (99R 411000
110)
Most common indirect cost transfers
Transfer from fund 27 to fund 10 (10R 418000
127)
Transfer from fund 99 to fund 10 (10R 418000
199)
Most common residual balance transfers
Transfer from fund 49 to fund 39 (39R 419000
149)
Transfer from fund 39 to fund 10 (10R 419000
139)

8
SOURCE 200REVENUE FROM LOCAL SOURCES

210 Taxes
220 Payments in Lieu of Taxes (Milwaukee only)
240 Payments for Services
250 Food Service Sales
260 Non-Capital Sales
270 School Activity Income
280 Earnings on Investments
290 Other Revenues from Local Sources

9
PROPERTY TAX TRANSACTIONShttp//www.dpi.state.wi
.us/sfs/doc/prop_tax.doc
10
PROPERTY TAX LEVIES

On or before November 1, every public school
board must approve the levy amounts necessary to
operate and maintain district schools
(s.120.12(3) Wis. Stats.)
May levy in funds 10, 38, 39, 41, 80

11
PROPERTY TAX LEVIES

Entry to set up the current tax levy upon
certification (November)
General Fund
Funds other than the General Fund

12
PROPERTY TAX LEVIES

District receives taxes from municipalities
February and August
General Fund

13
PROPERTY TAX LEVIES

Transfer of cash from fund 10 to other funds
General Fund
Funds other than the General Fund

14
PAYMENTS FOR SERVICES

You are providing a service and receiving payment
for that service
Example
Non-resident student attending your district
Student is not open-enrolled
Resident district is not paying tuition
Parent is paying tuition
Source 241

15
GIFTS

Gifts specified by donor to be used for operating
purposes (i.e. playground equipment, school
nurse, beautification of grounds)
Source 291
Generally reported in Fund 21
http//www.dpi.wi.gov/sfs/doc/fund21.doc

16
OTHER REVEUE FROM LOCAL SOURCES

Source 290
Student Fees/Fines
Regular school year fees for consumables, locker,
towel, equipment usage, etc.
Rentals
Rental of district property from other than
charges to students
Example - Local organization use of a room
Textbooks Revenues
Rental or sale of textbooks to pupils
Summer School Revenue
Fees collected for summer school programs
This will be requested by your auditor if your
district has a membership audit

17
SOURCES 300, 400 AND 500

300 Source is a Wisconsin School District
400 Source is an Out of State School District
500 Source is a CESA or CCDEB

18
PAYMENTS FOR SERVICE

Transit of Aids (310, 510)
Examples -
Another entity provides special education
services for a resident student either on a
tuition basis or as the fiscal agent for a
cooperative program. Your district pays them for
the service. They file for the aid which is
received in the subsequent year. They transit to
you the portion of the aid associated with the
cost you reimbursed them for.
Your District is being reimbursed by another
entity for cost you incurred that are part of a
cooperative or packaged program with another
school district, CESA or CCDEB. The other entity
is claiming those costs on a state or federal
grant and using the funds received on the grant
to reimburse your district.

19
PAYMENTS FOR SERVICE

Payments for Services (340, 440, 540)
Examples
Open Enrollment Charges to other school
districts for instructional services your
district provided to pupils participating in the
open enrollment program (340)
Revenue from a CESA for instructional services
your district provided to pupils (540)

20
PAYMENTS FOR SERVICE

Payments for Services (340, 440, 540)
Examples
Cooperative Programs
Multi-District projects with COOP agreement
One District acts as fiscal agent
Fiscal agent maintains revenue and expenditure
records
Cost is prorated to participating districts
Revenues cover expenditures
Fiscal agent reports the payment by the
participating districts as a payment for services
(source 340)

21
COOP TRANSACTION REPORTING

Special Education COOP
Fiscal agent and participating districts account
for activity in fund 27
Other types of COOP agreements
Fiscal agent accounts for activity in fund 99
Operating transfer from fund 10 is made for the
fiscal agents portion of the cost
Participating districts account for their payment
to fiscal agent in the appropriate fund of the
activity which is most often the general fund

22
COOP TRANSACTION CODING

Coop transaction coding
http//www.dpi.state.wi.us/sfs/doc/coop_trans.doc
Fiscal Agent Agreement Account Coding
http//www.dpi.state.wi.us/sfs/xls/fisagagree.xls
Fiscal Agent Requirements
http//www.dpi.state.wi.us/sfs/doc/fisagnt.doc
Fiscal Agent Example of Level Three
Documentation
http//www.dpi.state.wi.us/sfs/doc/fisagnt_example
.doc
Link on School Financial Services website to COOP
information
http//www.dpi.state.wi.us/sfs/coop_agree.html

23
STATE AND FEDERAL AIDSOURCE CODES 600 AND 700
24
STATE AND FEDERAL AID

ENTITLEMENTS
MOST BIG PROGRAMS
GENERAL AID, SPECIAL EDUCATION,TRANSPORTATION,
SAGE
REVENUE WHEN APPROPRIATED
REIMBURSABLE GRANTS
GRANT PROGRAMS
CLAIMED ON PI 1086, SOURCE 630/730
REVENUE WHEN REIMBURSABLE EXPENDITURE OCCURS

25
SOURCE 600REVENUE FROM STATE SOURCES

610 State Aid Categorical
620 State Aid General
630 State special Project Grants
640 State Tuition Payments
650 State SAGE Aid
660 State Revenue Through Local Governments
690 Other Revenue from State Sources

26
STATE SPECIAL EDUCATION CATEGORICAL AID

Many different types of special education
programs
PROGRAM OPERATED BY THE DISTRICT (DISTRICT
EMPLOYS PERSONNEL)
PROGRAM OPERATED WITH A CONSORTIUM OF SCHOOLS
PROGRAM OPERATED BY CESA
PROGRAM OPERATED BY CCDEB
Costs funded by a combination of state, local and
federal dollars

27
Fund 27

Fund 27 is where all revenues related to special
ed are recorded.
Fund 27 acts like a sub fund to Fund 10
(general operations).
Fund 10 must always make a balancing entry in the
form of a transfer to Fund 27 at the end of the
year.
Fund 27 must have a 0 ending fund balance.

28
Fund 27 - Whats up with that??

Fund 27 identifies Special Education Costs.
A portion of these eligible costs are reimbursed
with a categorical aid.
A categorical aid is State aid that is intended
for a specific purpose.

29
How do I claim Special Ed Aid?

Fund 27 has its own annual claim
It is reported by a program installed on district
computer and sent via e-mail to DPI
Aid eligible and Non-aidable costs are
identified
http//www.dpi.state.wi.us/sfs/speced.html

30
EQUALIZATION AID

Verify that your equalization aid equals what is
reported in source 621
Aid payment schedule
http//www.dpi.state.wi.us/sfs/pay_aid_info.html
Final general aid worksheet
http//www.dpi.state.wi.us/sfs/aid_worksheets.htm
l

31
ACCOUNTING FOR DELAYED EQUALIZATION AID PAYMENT
32
State Revenue Through Local Governments

Revenue from local governments other than school
districts, CESAs and CCDEBs
Examples (Source 660)
Payments in Lieu of Taxes for DNR property
State financial assistance payments received from
Technical Colleges and Universities

33
SOURCE 700REENUE FROM FEDERAL SOURCES

710 Federal Aid Categorical
720 Impact and Disaster Aid
730 Federal Special Project Aid Transited
Through DPI
750 Elementary and Secondary Education Act
(ESEA)
760 Job Training Partnership Act (JTPA)
770 Federal Aid Received through Municipalities
and Counties
780 Federal Aid Received through State Agencies
other than DPI
790 Other Revenue from Federal Sources

34
Grant Receivables

Reimbursable grants are based on cost and will
require filing Cost-Reimbursement claim PI-1086
Revenue is reported in the fiscal year that the
cost is incurred
When a grant reimbursement claim is submitted
BEFORE the end of the fiscal year, but the actual
cash wont be received until AFTER the start of
the new fiscal year, a grant receivable needs to
be booked in the ledger.

35
Grant Receivables

Why do it this way?
In accrual accounting, revenue is recognized when
it is earned. By submitting the reimbursement
claims in June, the district earns the money in
the 06-07 school year, so the claims need to be
booked as revenue in 06-07 however, since the
actual cash will not come until the 07-08 school
year, a receivable is used to account for the
expected cash.

36
Grant Receivables

Example
Title I-A 06-07 reimbursement claim for 26,493
is completed and sent to DPI on June 29.

06-07 EOY Adjusting Entry (both increases) Debit
10B-715000-002 Due from Oth Govnts 26,493
Credit 10R-000000-751 IASA Title 1
26,493 8
07-08 Entry When the Cash Comes Debit
10B-711000-001 Cash 26,493 (increase)
Credit 10B-715000-001 Due from Oth Govnts
26,493 (decrease) (So, 07-08 revenue is not
effected at all by this transaction, which is
what we want because this amount was already
booked as revenue in 06-07!)
37
Grant Receivables

July 1, 2006 July 1, 2007

06-07
07-08
08-09
?Submit 06-07 grant claims. ?Book 06-07 revenue
in appropriate Source and end-of-year 06-07
receivable in 715000-002.
?Submit 07-08 grant claims. ?Book 07-08 revenue
in appropriate Source and end-of-year 07-08
receivable in 715000-002.
Receive 07-08 cash early in 08-09 fiscal year
(shows up on 08-09 aids register)
Receive 06-07 cash early in 07-08 fiscal year
(shows up on 07-08 aids register)
Revenue should equal the Aids Register amount
minus the beginning-of-the-year receivables
(06-07 revenue) plus the end-of-year receivables
(07-08 revenue).
38
Aids register is available at
http//www.dpi.state.wi.us/sfs/online_ar.html
39
SOURCE 800OTHER FINANCING SOURCES

850 Reorganization Settlement
860 Compensation for Sale of Loss of Fixed
Assets
870 Long-Term Debt Proceeds

40
SALE OF SCHOOL PROPERTY

Statute 120.10(12) states that the school board
has the power to authorize the sale of any
property belonging to and not needed by the
school district.
Generally recorded in Fund 10 under source 860
District may choose to place the revenue in
another fund but only if so designated at the
districts annual meeting

41
SOURCE 900OTHER REVENUES

950 Contribution to Employee Benefit Trust
960 Adjustments
970 Medical Service Reimbursements
990 Other Miscellaneous Revenues

42
SOURCE/OBJECT 971/972http//www.dpi.state.wi.us
/sfs/doc/rec_exp.doc
43
SOURCE/OBJECT 971/972

Source/Object 971 Refund of Prior Year Expense
E-Rate Refunds, Insurance Refund, CESA Refund,
Dividends on Workers Compensation
Source/Object 972 Property Tax and Equalization
Aid Refund
Property Tax Refund, Equalization Aid Refund,
Taxpayer Levy Refund, Special DPI Approved Amount

44
PROPERTY TAX REFUNDS