1. The Other Funds Funds 21, 41, 46, 60, 72, 73, 80 & 90 WASBO Accounting Conference New Business Office Staff Track Brian Kahl DPI School Finance Auditor Bruce Anderson DPI School Finance Consultant March 2015

2. Agenda The Main Funds The Other Funds –21: Special Revenue Trust Fund –41: Capital Expansion Fund –46: Long Term Capital Improvement Trust Fund –60: Agency Fund –72: Private Purpose Trust Fund –73: Employee Benefit Trust Fund –80: Community Service Fund –90: Package & Cooperative Program Fund 2 "The Other Funds" - WASBO Acct Seminar March 2015

3. The Main Funds General Fund Special Education Debt Service –Non-Referendum –Referendum Capital Projects Food Service F-10 F-27 F-38 F-39 F-49 F-50 3 "The Other Funds" - WASBO Acct Seminar March 2015

4. The Other Funds Special Revenue Trust Fund Capital Expansion Fund Long Term Capital Improvement Trust Fund Agency Fund Private Purpose Trust Fund Employee Benefit Trust Community Service Fund Package & Cooperative Program Fund –Packaged Services (CESA) –Other Package & Coop Pgm F-21 F-60 F-80 F-90 F-73 F-41 F-91 F-99 4 "The Other Funds" - WASBO Acct Seminar March 2015 F-72 F-46

5. Fund 21 Account for trust funds that can be used for district operations Sources –Gifts –Donations from Private Parties Expended pursuant to donor specifications, if any May carry a fund balance 5 "The Other Funds" - WASBO Acct Seminar March 2015

6. Fund 21 How to use this fund? District or staff controlled “activity” accounts Fund raisers Targeted donations Tournaments or Competitions 6 "The Other Funds" - WASBO Acct Seminar March 2015

7. Fund 21 Permanent Fund –Should be used to report resources that are legally restricted to the extent that only earnings and not principal, may be used for purposes that support the district’s programs –Resources should benefit the government –Need to keep the corpus intact 7 "The Other Funds" - WASBO Acct Seminar March 2015

8. Fund 21 District/Staff “activity” funds Activity groups where staff decides how to raise funds and how to appropriate them –Athletic Fundraisers –School Fundraiser (Example – Field Trips) –Band Uniforms –School Musical 8 "The Other Funds" - WASBO Acct Seminar March 2015

9. Fund 21 Why would you use Fund 21 instead of Fund 10? Shared Cost (Deductible Receipt if in Fund 10) Carry balances from year to year Comply with donor wishes if any restrictions placed on use of funds 9 "The Other Funds" - WASBO Acct Seminar March 2015

10. Fund 21 Accounting Transactions Ledger Accounts –Revenues –Expenditures Balance Sheet Accounts –Assets –Liabilities –Equity (Fund Balance) 10 "The Other Funds" - WASBO Acct Seminar March 2015

11. Fund 21 More information: When to Use Fund 21 http://sfs.dpi.wi.gov/files/sfs/doc/fund21.doc WIAA and Other Tournaments and Competitions http://sfs.dpi.wi.gov/files/sfs/doc/tournaments_hosted. doc 11 "The Other Funds" - WASBO Acct Seminar March 2015

12. Fund 60 Agency Fund Used primarily to account for assets held by the district on behalf of pupil organizations Parent organization funds may be accounted for here –May not be a separate 501(c)(3) 12 "The Other Funds" - WASBO Acct Seminar March 2015

13. Fund 60 Agency Fund Only balance sheet accounts (assets & liabilities) are reported in Budget and Annual reports But… Records of receipts and disbursements must be maintained locally and will be examined during audit 13 "The Other Funds" - WASBO Acct Seminar March 2015

14. Fund 60 Pupil Organizations Funds are held by the district for the benefit of the student organizations –District has a fiduciary responsibility Students are the decision makers on how to raise money and how to spend it –Staff advisers only advise, do not decide 14 "The Other Funds" - WASBO Acct Seminar March 2015

15. Fund 60 Pupil Organizations Student Council Class of 20XX National Honor Society Yearbook Drama Club Foreign Language Club Other Clubs 15 "The Other Funds" - WASBO Acct Seminar March 2015

16. Not Fund 60 Activities where staff make the decisions are District Activities and accounted for elsewhere Examples: –Athletics –Musical –Band Uniforms –Field Trips –Shop Class –Sunshine Club / Coffee Fund* Should NOT appear anywhere on the district’s books. These are not district funds. 16 "The Other Funds" - WASBO Acct Seminar March 2015

17. Fund 60 Accounting Transactions Assets –711000: Cash –712000: Investments Liabilities –814000: Due to Student Organizations Equity –None 17 "The Other Funds" - WASBO Acct Seminar March 2015

18. Fund 60 Parent Organizations District may establish agency funds for parent organizations –Bank accounts in the name of the district –Same policies/procedures as for student organizations Liability Acct 818000: Due to Parent Organizations Parent organizations may not use the district’s tax ID number Parent organizations may not be a separate 501(c)(3) 18 "The Other Funds" - WASBO Acct Seminar March 2015

19. Fund 60 More information: Agency Fund Guidelines document http://sfs.dpi.wi.gov/files/sfs/doc/stud_acct.doc Audit Program for Pupil Activity Accounts http://sfs.dpi.wi.gov/files/sfs/pdf/student_activity_ funds.pdf http://sfs.dpi.wi.gov/files/sfs/pdf/student_activity_ funds.pdf 19 "The Other Funds" - WASBO Acct Seminar March 2015

20. Fund 41 Capital Expansion Fund Projects financed with a tax levy per Wis. Stats. 120.10(10m) –Levy is within the Revenue Limit Restricted to capital expenditures related to buildings and sites –Not equipment –Not furnishings Requires approval at Annual Meeting 20 "The Other Funds" - WASBO Acct Seminar March 2015

21. Fund 41 Eligible expenditures defined: For acquiring and remodeling buildings and sites, and Maintenance or repair expenditures that Extend or enhance the service life of building, building components, sites and site components 21 "The Other Funds" - WASBO Acct Seminar March 2015

22. Fund 41 Why use Fund 41? Allows for depreciation of expenses over length of time In year of spending - Reduces shared costs in aid formula –Can reduce the impact of negative tertiary aid for districts in that position –Smoothes out aid for positively aided districts. 22 "The Other Funds" - WASBO Acct Seminar March 2015

23. Fund 41 Disadvantage Restricts use of limited revenues to qualifying capital expansion projects –Cannot be redirected to use for general operations or routine maintenance Creates additional accounting / reporting requirements 23 "The Other Funds" - WASBO Acct Seminar March 2015

24. YrLevyExpend.Amortized Expenditures Total Amount 1$105,000$100,000 2$105,000$100,000$50,000 3$105,000$100,000$50,000$33,333$83,333 4$105,000$100,000$33,333$25,000$58,333 5$105,000$100,000$33,334$25,000$20,000$78,333 6$0$25,000 $20,000$5,000$50,000 7$0 $25,000$20,000$5,000$50,000 8$0 $20,000$5,000$25,000 9$0 $20,000$5,000$25,000 10$0 $5,000 T$525,000 $100,000 $25,000$525,000 Fund 41 Amortizing Expenditures Over Time 24 "The Other Funds" - WASBO Acct Seminar March 2015

25. Fund 41 A Capital Expansion document and PowerPoint can be found on the finance team page in the WUFAR link: http://sfs.dpi.wi.gov/sfs_wufar http://sfs.dpi.wi.gov/sfs_wufar Click on: Accounting Issues and Coding Examples Accounting Issues and Coding Examples or go directly to: http://sfs.dpi.wi.gov/files/sfs/doc/cap_expans_publish.doc http://sfs.dpi.wi.gov/files/sfs/ppt/cap_expans_publish.ppt 25 "The Other Funds" - WASBO Acct Seminar March 2015

26. Fund 46 Long-term Capital Improvement Trust Fund (Fund 46) A school board may establish a “trust” to fund capital improvement projects per their ten year long-term capital improvement plan. ------------------------------------------- REQUIREMENTS - Getting Started 1.Board approved 10 year capital improvement plan. 2.Board resolution to establish a trust. 3.Creation of a segregated bank account. 26 "The Other Funds" - WASBO Acct Seminar March 2015

27. Fund 46 REQUIREMENTS and RESTRICTIONS ● Funds may only be accessed five years after the establishment of the “trust” fund. ●—Funds must be physically deposited and held in a segregated bank/investment (separate and distinct from other district accounts) until they are expended for capital improvement projects per the district’s plan. ●—Funds invested as per sec. 66.0603, Wis. Stats. 27 "The Other Funds" - WASBO Acct Seminar March 2015

28. Fund 46 REQUIREMENTS and REPORTING The following must be reported to DPI: 1.Official Board minutes approving the long-term capital improvement plan. 2.Signed resolution creating the Long- term Capital Improvement Trust Fund or official minutes documenting the creation of the fund. 3.Documentation that confirms the existence of a segregated bank/investment account. http://sfs.dpi.wi.gov/sfs_capital_projects_funds 28 "The Other Funds" - WASBO Acct Seminar March 2015

29. Fund 72 Private Purpose Trust Fund Account for gifts and donations specified for the benefit of private individuals and organizations not under the control of the school board –Board acts as Trustee of account –Example: Scholarship Fund –Expenditures are made pursuant to donor specifications 29 "The Other Funds" - WASBO Acct Seminar March 2015

30. Fund 73 Employee Benefit Trust Fund Used to account for resources held in trust for formally established defined benefit plans, defined contribution plans, or employee benefit plans Must be legally established in accordance with state statutes, federal law, and IRS requirements Legally irrevocable trust 30 "The Other Funds" - WASBO Acct Seminar March 2015

31. Fund 73 Employee Benefit Trust Fund Created as a mechanism for districts to fund post-employment benefit obligations Districts not required to use this –May opt to “pay as you go,” however, that does not help reduce the long-term liability Requires actuarial study to determine funding levels 31 "The Other Funds" - WASBO Acct Seminar March 2015

32. Fund 73 Employee Benefit Trust Fund District makes payments to the trust from the governmental funds (Funds 10, 27, 50, and 80) to fund annual obligations. Fund 73 pays the retiree benefits 32 "The Other Funds" - WASBO Acct Seminar March 2015

33. Fund 73 Why use Fund 73? To reduce the district’s long- term unfunded obligations. Costs to Special Education Fund are aidable up to the ARC if one of the three criteria are met. 33 "The Other Funds" - WASBO Acct Seminar March 2015

34. Fund 73 More information: Employee Benefit Trust Fund webpage http://sfs.dpi.wi.gov/sfs_emp_benefit_trust_fund Employee Benefit Fund Requirements webpage http://sfs.dpi.wi.gov/sites/default/files/imce/sfs/EBFRequir ements.doc Fund 73 OPEB Transaction Accounting Samples http://sfs.dpi.wi.gov/sites/default/files/imce/sfs/doc/Fund_73_acco unt_descriptions.doc http://sfs.dpi.wi.gov/sites/default/files/imce/sfs/doc/Fund_73_acco unt_descriptions.doc 34 "The Other Funds" - WASBO Acct Seminar March 2015

35. Fund 80 Statutory authority: 120.13 (19) C OMMUNITY PROGRAMS AND SERVICES. General Outline of Community Service Activities: Access to Community Service Fund activities cannot be limited to pupils enrolled in the district's K-12 educational programs. Other funds, such as the General Fund and Special Projects Fund, carry out the day to day K-12 educational operations of the district. All activities associated with a well-rounded curriculum (curricular and extra-curricular activities) are to be accounted for in these funds (General Fund and Special Projects Fund)and the Pupil Activity Fund (Fund 60). 35 "The Other Funds" - WASBO Acct Seminar March 2015

36. Fund 80 The levy for Fund 80 was removed from revenue limit control starting in the 2000- 01 school year [s. 121.91(2m)(e)1.]The levy for Fund 80 was removed from revenue limit control starting in the 2000- 01 school year [s. 121.91(2m)(e)1.] As a result, the Fund 80 levy is completely funded by local taxpayers. It has never been a factor in the equalization aid calculation.It has never been a factor in the equalization aid calculation. The Department(DPI) is required to define ineligible costs for Community Programs and Services by administrative rule. PI-80 emergency rules took effect on July 1, 2014. 36 "The Other Funds" - WASBO Acct Seminar March 2015

37. Fund 80 New Rule Ineligible costs means school district costs that are not the actual, additional costs to operate community programs and services. First, costs are ineligible if they are not costs to operate community programs and services. Community programs and services do not include any program that is limited to only school district pupils or any program or service whose schedule presents a significant barrier for age- appropriate school district residents to participate in the program or service. Second, costs must not only be costs to operate community programs and services to be eligible but also must be actual, additional costs. Ineligible costs include costs that would be incurred by the school district if the community programs and services were not provided by the school district. 37 "The Other Funds" - WASBO Acct Seminar March 2015

38. Fund 80 New Rule PI 80.02 Definitions. In this chapter: “Community programs and services” does not include: –Any program or service that is limited to only school district pupils. –Any program or service whose schedule presents a significant barrier for age- appropriate school district residents to participate in the program or service. “Ineligible costs” means school district costs that are not the actual, additional costs to operate community programs and services under s. 120.13 (19), Stats. “Ineligible costs” includes costs that would be incurred by the school district if the community programs and services were not provided by the school district. 38 "The Other Funds" - WASBO Acct Seminar March 2015

39. Fund 80 New Rule Provides you with some basic information about the impact of transitioning from DPI guidelines, to criteria, and now to administrative rules. It is important to understand that an emergency rule has the power of law until the process has been completed. The legislature will review the rule and have the ability to modify the rule in the spring of 2015. 39 "The Other Funds" - WASBO Acct Seminar March 2015

40. Fund 80 New Rule What does “actual” and “additional” costs mean to a school district? A cost, that if the ability to operate the Community Service Fund (Fund 80) ended; a school district, would not have to move those costs to the General Fund (Fund 10) to continue the regular curricular and extracurricular programs for its students. A few examples: –Before school and after school childcare open to any district resident. –Adult technology classes held at the local public library. –Adult literacy classes held at a township hall within the school district. 40 "The Other Funds" - WASBO Acct Seminar March 2015

41. Fund 80 New Rule What does “actual” and “additional” costs mean to a school district? A more complex example: The summer baseball program for all interested resident students uses the school district’s ball diamond for games, after the high school season is over. –District employees do the mowing, mark the field, and clean up after the game. The field does not have lights and the concession stand is not operating. Each District employee logs their time related to this program and based on past records the total hours/game are determined and charged to Fund 80. The related costs for mower fuel and field paint is based on past years records and are charged to Fund 80 41 "The Other Funds" - WASBO Acct Seminar March 2015

42. Fund 80 New Rule What does “actual” and “additional” costs mean to a school district? An example of an expense not meeting this standard: An adult ballroom dance class is held one night a week for 6 weeks in the middle school gym. It has the facility for a 3 hour period of time. The class instructor or a participant sweeps the floor before the class starts. The custodial staff do not clean the gym or restrooms in this part of the building until after everyone from the class has left the school. There can be no custodial time or related costs charged to Fund 80 for this class as there was no actual or additional cost incurred. 42 "The Other Funds" - WASBO Acct Seminar March 2015

43. Fund 80 New Rule 2013 Act 306 requires that Fund 80 expenditures be audited by the school district’s auditor. NOTE: Current law already directs DPI to exclude from Shared Costs (for General Aid purposes) any CPS expenditures. – If a CPS expenditure audit determines that a district had inappropriately coded CPS expenditures to Fund 10, those expenditures would have to be removed from Fund 10 and would decrease the district’s Shared Costs for General Aid purposes. 43 "The Other Funds" - WASBO Acct Seminar March 2015

44. Fund 80 New Rule 2013 Act 306 requires DPI to determine if ineligible CPS expenditures exist –If so, DPI must reduce the district’s allowable revenue limit authority the following year by the amount of the ineligible CPS expenditures; structured as a negative exemption rather than a reduction to the district’s base. This first applies to the Revenue Limit calculation for the 2015-16 school year, based on 2014-15 expenditures. –The audit process will be more detailed than it was this past school year. –After the Legislature has finalized PI 80, the school auditors will be given formal procedures after May 15, 2015. 44 "The Other Funds" - WASBO Acct Seminar March 2015

45. Fund 80 New Rule Preparing for an CPS audit; Each program or service will need to be documented within the district’s accounting system. –Supporting documentation will be part of the audit process. Wisconsin Uniform Financial Accounting Requirements (WUFAR) will assist each district in this process Community Service Fund Information http://sfs.dpi.wi.gov/sfs_comm_serv website provides the most recent information regarding Fund 80. http://sfs.dpi.wi.gov/sfs_comm_serv –Question and Answers –Complete Fund 80 PowerPoint 45 "The Other Funds" - WASBO Acct Seminar March 2015

46. Fund 90 Package and Cooperative Program Fund Used to account for expenditures made by a host district for programs and services offered to other districts –Fund 91: Through a CESA –Fund 99: Others 46 "The Other Funds" - WASBO Acct Seminar March 2015

47. Fund 91 Host District CESA acts as fiscal agent for the districts in the cooperative –Other districts pay CESA their share –Host district pays CESA for its share Expenditure to F-10 –CESA reimburses host district for all program expenditures –No fund balance allowed 47 "The Other Funds" - WASBO Acct Seminar March 2015

48. Fund 99 Fiscal Agent District District that acts as the fiscal agent for the districts in the cooperative –Other districts pay host district their share –Host district transfers from F-10 its share of costs Revenue to F-99 Expenditure to F-10 –Pays all expenditures for program –No fund balance allowed 48 "The Other Funds" - WASBO Acct Seminar March 2015

49. Fund 99 Examples of Cooperative Services Hockey Co-op Swim Team Co-op Transportation Services Business Education Program REQUIRES completion of a “66:30 Agreement” Wis. Stats. 66.0301 49 "The Other Funds" - WASBO Acct Seminar March 2015

50. Fund 90 Package & Cooperative Services NOTE: Shared Special Education services are recorded in F-27 not in F-90. 50 "The Other Funds" - WASBO Acct Seminar March 2015

51. Fund 90 More information: Cooperative Service Agreement 66.0301 webpage http://sfs.dpi.wi.gov/sfs_coop_agree 51 "The Other Funds" - WASBO Acct Seminar March 2015

52. THANK YOU! Questions? Contact Information  Bruce Anderson, Consultant 267-9707  Carey Bradley, Consultant 267-3752  Dan Bush, Consultant267-9212  Karen Kucharz Robbe, Consultant266-3464  Victoria Chung, Accountant267-9205  Brian Kahl, Auditor 266-3862  Gene Fornecker, Auditor 267-7882  Derek Sliter, Auditor 267-9218  Debi Towns, Assistant Director267-9209  Bob Soldner, Director 266-6968  School Financial Services http://sfs.dpi.wi.gov/ http://sfs.dpi.wi.gov/ 52 "The Other Funds" - WASBO Acct Seminar March 2015