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School District Accounting

Colorado Association of School Business Officials. School District Accounting. Presented by Karin Slater, SFO. School District Accounting. Introductions Name School District/Employer Position How long have you been involved with school finance. School District Accounting.

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School District Accounting

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  1. Colorado Association of School Business Officials School District Accounting Presented by Karin Slater, SFO

  2. School District Accounting • Introductions • Name • School District/Employer • Position • How long have you been involved with school finance

  3. School District Accounting • The School District Accounting  Class is developed for School Accounting Personnel of public and charter schools by ColoradoASBO in cooperation with the Colorado Department  of Education, the Colorado League of Charter Schools, and offers updates on issues affecting the accounting/financial operations and reporting requirements of public schools in Colorado. This class will help you develop a “Tool Kit” to be used in your present or future school district employment.

  4. School District Accounting • Class Overview:This class provides attendees with a detail look at accounting, budgeting, and financial monitoring practices in school districts. Through a combination of lecture and classroom exercises, participants will learn the concepts of closing out the fiscal year, property tax calculations, Data Pipeline, School Finance Formula, budgets and budget monitoring as it pertains to school districts. • This course is appropriate for anyone interested in • advancing their knowledge of school district • accounting.

  5. Agenda • Fund Types • Financial Transparency • Closing out the year • Data Pipeline • Gallagher and TABOR • Mill-levy Certifications • School Finance Formula • Budget Goals • Budgeting Process and Calendar • Budgeting and Monitoring • Long-term financial planning • Ratio analysis

  6. Fund within CDE Chart of Accounts xx-xxx-xx-xxxx-xxxx-xxx-xxxx-xx-xx-xx • 1. Fund - an independent fiscal and accounting entity with a self-balancing set of accounts for recording cash and other financial resources. It contains all related assets, liabilities and residual equities or balances, or changes therein. Funds are established to carry on specific activities or attain certain objectives of the school district according to special legislation, regulations, or other restrictions.

  7. FUND TYPES • Types of Funds • Governmental • General • Special revenue • Debt Service • Capital Projects • Permanent • Proprietary • Enterprise • Internal Service

  8. FUND TYPES • Types of Funds (Cont’d) • Fiduciary • Pension • Investment • Private purpose • Agency • How many funds is a government required to have?

  9. Financial Transparency • Required Financial Transparency Colorado Revised Statutes, 22-44-304 (Commencing July 1, 2015) • (All documents must be posted or updated within 60 days after completion or receipt of the applicable report, statement or document)

  10. Financial Transparency (2) • No later than March 1, 2017 FY2015-16 data will be posted on the standard website template. • Software vendor will collect and publish a public website view no later than July 1, 2017 • 4-digit unique school code will be used to report expenditures http://www.cde.state.co.us/datapipeline/org_orgcodes • Will not need to report school codes to CDE

  11. Financial Transparency (3) • District Adopted Budget - Including Uniform Budget Summary (current and prior two years) • District Financial Audit (current and prior two years) • Salary Schedules or Policies (current and prior two years) • List of Waivers Received by the School District/Charter Schools (new as of July 1, 2017)

  12. Financial Transparency (4) • Financial Data File* (current and prior year: EG: FY16-17 and FY15-16) (districts identified as small/rural with less than 1,000 K-12 students, and having no charter schools, required to post financial data file with district level financial information only) *FY16-17 Financial Data File is required to be posted no later than March 1st, 2018

  13. Financial Transparency (5) • Other District-Specific Financial Information • Quarterly Financial Statements • Accounts Payable Check Registers • Credit, Debit and Purchase Card Statements • Investment Performance Reports or Statements

  14. Compliance Timeline • Update information within 60 days • Completion of report, statements, applicable information • For example: • Budget Posted by August 30 if adopted June 30 • Not required to post • Personal information relating to payroll • Other information that is confidential or protected from public disclosure pursuant to state or federal law • Examples: HIPPA; IDEA; Homeless

  15. Closing the Year • Management Assurances • Fund 90 entries • Fund Balances adjusted in books

  16. Management Assertions • Assertions by management about the accuracy of the financial statement components. • An auditor typically uses management assertions to help guide the type of audit evidence gathered. These assertions are: http://www.accountingconcern.com

  17. Assertions:Transactions • Occurrence • whether all recorded transactions have occurred and pertain to the entity Authorization • whether all transactions have been property authorized Accuracy • whether amounts and other data relating to recorded transactions and events have been recorded appropriately. GAAP establishes the appropriate method for recording a transaction or event.

  18. Assertions: Transactions(2) Completeness • whether all transactions that occurred during the period have been recorded. Cutoff • whether transactions and events have been recorded in the correct accounting period. Classification • whether transactions and events have been recorded in the proper accounts.

  19. Assertions:Account Balances Rights and Obligations • whether the entity holds or controls the rights to assets included on the financial statements, and that liabilities are obligations of the entity. Existence • whether ending balances of assets, liabilities, and equity interests included in the financial statements actually exist at the date of the financial statements

  20. Assertions: Account Balances(2) Completeness • whether all transactions that occurred during the period have been recorded. Valuation and Allocation • whether assets, liabilities, and equity interests included in the financial statements are at appropriate amounts and any resulting valuation or allocation adjustments are appropriately recorded.

  21. Assertions: Disclosures Occurrence and Rights and Obligations • whether disclosed events, transactions, and other matters have occurred and pertain to the entity Completeness • whether all transactions that occurred during the period have been recorded

  22. Assertions: Disclosures(2) Classification and Understandability • whether the financial information is appropriately presented and described and that disclosures are clearly expressed Accuracy and valuation • whether financial and other information is disclosed fairly and at appropriate amounts.

  23. Closing the Year- Fund Code 90 Fund Code 90 District Debt Used with Balance Sheet Codes • 7511General obligation bonds payable • 7512 Net effective interest (contact your bond underwriter if you do not know how to calculate) • 7513 Amount authorized from most recent bond • 7514 Year of last successful bond election • 7515 Total issued from last successful bond • 7519Contra Account for 7511-7515 (for district use only, will not be uploaded data by CDE) • Not a true fund, used for data pipeline collection purposes only.

  24. Fund Code 90 DISTRICT DEBT:APPENDIX R

  25. Closing the Year- Fund Code 90 Fund Code 90 Voter Approved Override Revenues Used with Source Codes: • 1170 Amount Authorized – Voter Approved Overrides • 1171 Amount Collected – Voter Approved Overrides • 1172 Amount Distributed to Charter Schools – Voter Approved Overrides • 1173 Amount Distributed to Non-Charter Schools – Voter Approved Overrides • 1174 Amount Retained by District – Voter Approved Overrides • 1179 Contra Account – Voter Approved Overrides • (for district use only, will not be uploaded data by CDE) • Not a true fund, used for data pipeline collection purposes only.

  26. Closing the Year-Fund Balances • 6710 Non-spendable Fund Balance • 6720 Restricted Fund Balance • 6750 Committed Fund Balance • 6760 Assigned Fund Balance • 6770 Unassigned Fund Balance xx-xxx-xx-xxxx-xxxx-xxx-xxxx-xx-xx-xx Note: last xx-xx-xx codes above are optional.

  27. Data Pipeline: Periodic Collections • Overview: A periodic collection completed once a year and has a specific time window in which the work must be done. These dates indicate the start and end date of the collection. All work within the collection must be done within this specified time period. At the end of the collection the collection is closed and no modifications can be made until the following year.

  28. Periodic Collections – Finance December • Overview:The Financial December collection is how annual financial data which matches independent financial audits is transmitted. • Purpose: To collect electronic (Pipeline) data which mirrors annual independent financial audits. • Dependencies: There are no dependencies for the Financial December Collection. However, must be tied to the completion of the financial audit. • Record Expectation: Revenue, expenditure, asset, liability and fund equity accounts are collected for all funds.

  29. Pipeline: Finance December • Examples of the negative numbers • CDE PowerPoint on their website • Finance December Contacts • Adam Williams: 303-866-6843: williams_a@cde.state.co.us • Yolanda Lucero: 303-866-6847: lucero_y@cde.state.co.us Support at: datapipeline.support@cde.state.co.us

  30. Pipeline: File Format • Financial Files for Data Pipeline are a standard 48 byte length • District Code: 4 bytes • Administrative Unit Code: 5 bytes* (optional, or zero filled) • Unique School Code: 4 bytes* (optional, or zero filled) • Fund Code: 2 bytes • Location Code: 3 bytes • SRE Code: 2 bytes • Program Code: 4 bytes • Object/Source/Balance Sheet Code: 4 bytes • Job Class Code: 3 bytes • Grant Code: 4 bytes • Amount: 13 bytes*

  31. Amount • The Amount Field in your data string can accommodate up to 13 bytes • It is a numeric field • Negative dollar amounts cannot be preceded by zeroes • Formerly, ADE would have accepted the following: • 000000-587941 • -000000587941 • Pipeline Negative Dollar Amounts must be formatted as: • -587941 • It is still a 13 byte field • Whole/positive number can still be preceded by zeros, but preceding zeros for positive dollar amounts are not necessary

  32. Pipeline- Negative Numbers • 218000000000010000000000320000031600000001483096 • 21800000000001000000000032100000000-7020659 If your system is not formatting the negatives to the start of the Amount Field, count from the right 13 spaces, this is where your negative sign should be located.

  33. File Types Accepted in Pipeline • Unlike ADE which only accepted ASCII files, Pipeline will accept the following: • txt • csv • Excel • If an Excel file is submitted, the first row of data in the file must be formatted as a header: label each column • ALL adjusting journal entries that you need to make to pass Pipeline edit errors are made in your software system prior to submitting a file. • Do not make one-sided entries.

  34. File Names • In Pipeline, it is up to the District to name the file being submitted • You are advised to create a file naming system that allows you the ability to track and locate the files you have submitted with ease • File_1_Finance • File_2_Finance • Etc…

  35. Passwords • Before you are able to submit a file in Pipeline you need passwords • CDE no longer assigns passwords • Passwords are assigned by Local Access Managers (LAMS) • Password process information has been sent to all LAMs

  36. Process • Submitting a financial file in Pipeline • Your software system creates a file • You log into Pipeline with passwords • You submit the file • The file is subject to two levels of edits • First tier edits: address account code issues • Second tier edits: address dollar amounts • You need to correct your Errors • You produce reports (EG – the Auditor’s Integrity Report) • You can submit data as many times as needed • Your end goal is to transmit and finalize data which matches your annual independent audit

  37. Process: Data Roll-Up • Districts Roll-Up the data at the District level • Data file is submitted • 1st tier edit errors are fixed • Once 1st tier edits are corrected and a revised file is submitted, the District must initiate the roll-up process • Finance December • Status Dashboard: click green “Submit” button • Click green “Roll Up Data” button • Message: Data for LEA marked complete successfully • Correct 2nd tier errors, initiate roll-up process again • When “Rollup Validation Errors” are zero, you click “Submit to CDE” and this finalizes your data

  38. Roll Up Process • This is now done at the District level because you now have the ability to Append data • You can submit data in smaller batches • EG – you could submit one fund at a time • EG – a District with a Charter School or Schools can submit the District’s data first. Clean up any errors, and append additional Charter data onto the District’s already “clean” data as that Charter School information becomes available

  39. Review and Validate Reports • Reports to review and validate (compare to the financial statements) • Auditors Integrity Report • Bolded Balance Sheet Report • Charter School Auditors Integrity Report, • Charter School Bolded Balance Sheet Report • Grant Revenue Reconciliation, etc. Referred to as the COGNOS reports.

  40. Finalizing the Pipeline & Audit • Finalize Uploaded Data Audit Complete – Send to CDE What to send • Accreditation Report • 2016-2017 Audits • Single Audit, if issued separately (OMB Circular A-133) – Districts that expend $500,000 or more in Federal Awards. • Limit was increased for fiscal years beginning after 1/1/15 to $750,000 • Reconciliation Reports and Other Supporting Documentation Audit Complete – Send to State Auditor • 2016-2017 Audits

  41. Gallagher and TABOR • Gallagher Amendment • Passed in 1982 • constant ratio between the property tax revenue from residential property and from business property. • TABOR is the Taxpayer Bill of Rights • Passed in 1992. • prohibits any tax increase without a vote of the people • Taxes can only increase by growth + inflation • Established the 3% Emergency Reserve Requirement.

  42. Gallagher and TABOR • Beginning in FY 2007-08, legislation was passed to stabilize school district mill levies • Capped mill levies at 27 mills and froze mill levies for districts with mill levies of 27 mills or less • Applies to the Total Program mill levy only • Does not affect override, bond, special building and technology, full-day kindergarten excess cost, or transportation mill levies. • Does not apply to districts that have not held successful TABOR election.

  43. Gallagher and TABOR • The four school districts which have not held a successful TABOR election must levy the least/smallest mill resulting from the following three options: • (1) the mill that it levied in the prior year; • (2) the mill necessary to entirely pay for its Total Program and categorical programs, less any specific ownership tax revenues and minimum State Share funding received or • (3) the maximum mill allowed by the TABOR constitutional amendment.

  44. Gallagher and TABOR

  45. Mill Levy Certification • County Assessor sends the Assessed Valuation • To all taxing districts within the county • CDE receives for school districts • You may have more than one County – mills based on total assessed value across all counties • CDE sends out all District’s Direct Certification of Mill Levies for Property Tax Year 2018. • Includes: • Category of mill levy • CDE’s calculated mill levy • Assessed valuations

  46. Mill Levy Certification • COMPLETE AND RETURN TO TIM KAHLE BY DECEMBER 20, 2017: Public School Finance Unit Colorado Department of Education 201 E. Colfax Avenue; Room 206 Denver, CO 80203 Fax: (303)866-6663

  47. Mill Levy Certification • Time Lines • Assessor sends out preliminary assessed valuations by August 25 • Assessor sends final assessed valuation by December 10 • Mill levy assessment must be Board approved and to the Counties by December 15 • Be sure your Board meeting is prior to the County Board meeting • County Board of Commissioners will forward a copy of the Certification of Levies and Revenue form to CDE

  48. Mill Levy Certification • While CDE will calculate most of your mills for you, the district will be responsible for calculating the Bond Mills • Calculate Mill Levy on Sample District’s certification form

  49. Mill Levy • Legislation passed beginning in FY 2007-08 to stabilize school district mill levies. • Legislation caps mill levies at 27 mills and freezes mill levies for districts with mill levies of 27 mills or less. This legislation applies to the Total Program mill levy only. • It does not affect • override, • bond, • special building and technology, • full-day kindergarten excess cost, • or transportation mill levies. • Freeze does not apply to districts that have not held a successful TABOR election.

  50. Why was Legislation Passed?

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