CDE Public School Finance Training Webinar FPP Handbook and COA Changes Update December 8, 2011 at 2pm FPP – Financial Policies and Procedures COA – Chart of Accounts

Financial Policies and Procedures Handbook http://www. cde. state. co The Handbook link is located under the “Financial Policies and Procedures Handbook (Word)” section of this webpage. The Federal Grants Accounting Section provides information related to accounting and reporting of Federal grant programs by school districts, including various financial compliance resources. Correspondence Links relate to the charter school audit requirement and the GASB Pension comment letter. Also added the On-line reporting.

Financial Policies and Procedures Handbook Note that the Chart of Accounts and the Financial Policies and Procedures Handbook apply to Colorado Public School Districts, the Charter School Institute (CSI), Charter Schools, Charter School Collaboratives, and Colorado Boards of Cooperative Educational Services (BOCES) C.R.S. – Colorado Revised Statutes Contingent on approval by the FPP Committee at the next FPP meeting – February 2012

Purpose of the FPP Handbook 1) To summarize state and federal general requirements regarding the management and reporting of financial data. 2) To ensure that educational financial data are reported in a comprehensive and consistent manner. 3) To provide information and guidance regarding the budgeting, accounting, reporting, auditing, investment and cash management of educational finances. The financial data that is reported to the Department is used for both State and Federal purposes. 4

Purpose of the FPP Handbook The Handbook has been developed to conform to generally accepted accounting principles (GAAP) for governments and compliance with legal provisions. Any reference to “school district(s)” also includes Charter Schools, Boards of Cooperative Educational Services (BOCES), Charter School Collaboratives, and Charter School Institute (CSI). 5

Financial Policies and Procedures C.R.S. 22-44-204(3) requires that the Financial Policies and Procedures Handbook shall be used by every school district in the development of the budget, in the keeping of financial records and in the periodic presentation of financial information to the board of education of the district. The FPP Handbook includes (as the Red Book) the required statewide Chart of Accounts (COA). C.R.S. – Colorado Revised Statutes 6

Financial Policies and Procedures State Audit law also requires school district auditors to ensure, in their annual financial audit, that school districts are complying with the requirement to use the Handbook. C.R.S. 29-1-603(1). C.R.S. – Colorado Revised Statutes 7

FPP Handbook Table of Contents Procedures Budget Accounting and Reporting Audit Investment and Cash Management Glossary Appendices Contacts The various Sections of the FPP Handbook. 8

FPP Handbook Changes Under “Accounting and Reporting” Section: A discussion of the new “Non-voter Approved Debt Service Fund” was added. Fund code 39 should be used for Non-voter Approved Debt. Fund 39 must not be comingled with any voter approved debt activities. 9

FPP Handbook Changes Under “Budget” Section: Clarification was added to the section on “District Emergency Reserve” If you are considering – call me at 303-866-6610 to discuss. 10

FPP Handbook Changes Under “Accounting and Reporting” and “Audit” Section: A discussion of the requirement that all charter schools must have a separate independent financial audit. A Federal finding that we could not avoid. A copy of the letter to charter schools and their authorizers is on CDE’s website under FPP. The charter school letter is available at the “corrspondence links” part of the FPP webpage. 11

FPP Handbook Changes Under “Glossary” Section: Add an item for “On-line Schools and Programs” Discusses the new requirement to track on-line school and program activities using a unique and specific location code (461 to 469) The on-line school and program letter is available at the “corrspondence links” part of the FPP webpage. 12

FPP Handbook Changes Under “Accounting and Reporting” Section: Added additional information related to the Financial Transparency Act requirements. Terry will discuss the Financial Transparency Act requirements. 13

Financial Transparency Act With the passage of HB10-1036, The General Assembly enacted the  "Public School Financial Transparency Act", which directs local education providers to post financial information on-line, in a downloadable format, for free public access.

Local Education Provider School District Board of Cooperative Services State Charter School Institute District Charter School Institute Charter School

Compliance Timeline Commencing July 1, 2010 FY2009-10 and FY2010-11 Annual Budgets District Budget Document Uniform Budget Summary Sheet FY2009-10 Financial Audit Quarterly Financial Statements Salary Schedules or Policies

Additionally commencing July 1, 2011 Compliance Timeline Additionally commencing July 1, 2011 Accounts Payable Check Registers Credit, Debit and Purchase Card Statements A recent survey was done by an outside entity that noted numerous issues with current postings to district websites.

Additionally commencing July 1, 2012 Compliance Timeline Additionally commencing July 1, 2012 Investment Performance Reports

Compliance Timeline Each local education provider shall update the information specified within sixty days after the completion or receipt of the applicable report, statement, or document.

Financial Transparency Act 22-44-304 (2) C.R.S. Nothing shall direct or require a local education provider to post personal information relating to payroll, including but not limited to payroll deductions or contributions, or any other information that is confidential or otherwise protected from public disclosure pursuant to state or federal law. There must be a state or federal law that allows the district to not report information, as protected from public disclosure.

Financial Transparency Act A local educational provider shall maintain the prior two budget years’ financial information on-line until the end of the current budget year. Three years of information is to be maintained on-line

Financial Transparency Act A link shall be provided to CDE’s website or the location information for CDE’s website where a member of the public may access information or reports that are submitted directly to CDE. This can be a link to the CDE main page, the PSFU website, SchoolView, etc.

Website Link

Budget – contents – mandatory C.R.S. 22-44-105 The budget shall be presented in the format established by the state board of education. The budget shall: Be presented in a summary format, understandable to layperson. Be presented in a summary format that allows for comparisons of revenues and expenditures among school districts by pupil. Be presented in a format that itemizes expenditures by fund, by pupil.

Budget – contents – mandatory C.R.S. 22-44-105 Describe the expenditure Show amount budgeted for current fiscal year Show the amount estimated to be expended for the current fiscal year Show amount budgeted for ensuing fiscal year Summarize revenues by revenue source Summarize expenditures by function (program), fund and object

Budget – contents – mandatory C.R.S. 22-44-105 Include a uniform summary sheet for each fund that details the following: Beginning fund balance and estimated ending fund balance Anticipated fund revenue by source Anticipated transfers and allocation to and from the fund Anticipated expenditures by program and object Amount of reserves

Minimum requirements QUARTERLY FINANCIAL REPORT 22-45-102(1)(b)(I-IV) Statue requires the board of education to review the financial condition of the district at least quarterly during the fiscal year. The board shall required the appropriate district personnel to submit a financial report covering the fiscal actions involving the general fund and any other funds that the board may request, at least quarterly. GENERAL FUND FY20XX-20XX (Prior Year) FY20XX-20XX (Current Year) For Period Ending September 30, 20XX BUDGET ACTUAL PERCENTAGE OF BUDGET EXPECTED YEAR END BALANCE BEGINNING FUND BALANCE 250,000.00 260,000.00 REVENUE 3,000,000.00 650,000.00 21.67% 3,120,000.00 680,000.00 21.79%   EXPENDITURES 750,000.00 25.00% 3,080,000.00 760,000.00 24.68% ENDING FUND BALANCE 150,000.00 60.00% 290,000.00 180,000.00 62.07% 300,000.00 CAPITAL RESERVE 10,000.00 11,000.00 131,000.00 32,751.00 130,000.00 8,000.00 6.15% 133,000.00 40,000.00 30.08% 34,751.00 315.92% 9,000.00 3,751.00 41.68% Specific Resolution Needed for Use of Portion of BFB Minimum requirements

Website Link

District Website Links Adams 12 Five Star Website Colorado Springs 11 The Academy of Charter Schools Don’t make the page hard to find, it should be no more then 1-2 mouse clicks from the homepage.

PSFU Website Links Public School Finance Homepage Website FY2011-12 Funding Information Public School Finance Self-Study Training Sessions

Chart of Accounts http://www.cde.state.co.us/cdefinance/sfCOA.htm This webpage also includes a Microsoft Office Excel file with the current State and Federal Grant Codes for use by school districts, labeled as “Chart of Accounts – State and Federal Grant Codes FY 2011-12” Still awaiting direction on treatment of some grants, such as Federal Mineral Lease and Secure Rural Schools.

Chart of Accounts COA – Chart of Accounts Note that the Chart of Accounts and the Financial Policies and Procedures Handbook apply to Colorado Public School Districts, the Charter School Institute (CSI), Charter Schools, Charter School Collaboratives, and Colorado Boards of Cooperative Educational Services (BOCES)

Chart of Accounts Table of Contents Introduction Fund Location Special Reporting Element Program Object/Source/Balance Sheet Job Classification Grant/Project Optional Dimensions Appendices

Chart of Accounts Changes Under “Fund”: New Bolded Fund Code 39 – Non-voter Approved Debt Service Fund Funds 30, 32 – 38 roll to Fund 31 and Fund 39 rolls to itself.

Chart of Accounts Changes Under “Location”: The current 461 location code for reporting On-line Activity was expanded to bold codes 461 to 469 This was done to accommodate the tracking and reporting of on-line school and program detailed activities through the ADE financial data submission process. The On-line school and program letter is available at the “correspondence links” part of the FPP webpage.

Chart of Accounts Changes Under “Object/Source/Balance Sheet”: Multiple Changes to Balance Sheet Codes to be in compliance with GASB Statement 54. Changes retroactive to July 1, 2011. Do not use new codes for FY10-11 ADE financial submissions.

Chart of Accounts Changes Under “Program”: Program Code 9300 for constitutional and legally mandated reserves Codes are now tied to the GASB 54 restricted reserve coding Therefore, substitute 93XX for 67XX under the restricted codes. such as 6721 equates to 9321

Chart of Accounts Changes Under “Object/Source/Balance Sheet”: Modified the Definition of SWAP Object Code 0960. Is now – Payments to Outside Entity Use with a grant code of 3130 This change was done to accommodate the required handling, tracking, and reporting of the SWAP grant starting in FY11-12.

Chart of Accounts Changes Under “Appendices”: The BOCES and Charter School appendices were updated to include information that sub-granting is not allowed. In addition, a new ADE edit will not accept Fund 70 – 85 with grant codes of 3000 – 9999. The entity that CDE provides with the funding is the responsible party for Federal compliance purposes. BOCES – Board of Cooperative Educational Services Fund 70 -85, relate to Agency and Foundation funds. Grant codes 3000 – 9999, relate to State and Federal grants.

Chart of Accounts Changes Under “Object/Source/Balance Sheet”: Effective for FY11-12 or later? Based on the use of GASB Statement No. 48 (Sales of future revenues), No. 53 (Hedging derivatives), or No. 60 (Service concession arrangements) – is anyone proposing to implement GASB Statement No. 63 (Statement of Net Position) early? Not effective until FY2012-13

Chart of Accounts Changes Effective for FY11-12 or later? GASB Statement No. 63: If anyone is and the activity relates to proprietary funds (not governmental funds) – we need to identify the possible “deferred outflow” or “deferred inflow” codes that should be established.

Chart of Accounts Changes Effective for FY11-12 or later? Under GASB Statement No. 63: 6790 – Net Investment in Capital Assets 6791 – Net Position – Restricted 6792 – Net Position - Unrestricted

Chart of Accounts Changes Under “Grant/Project”: Beginning FY2012-13 Districts will no longer have an option to use two grant codes for Federal grants, such as 5031 & 6031 A specific grant code will be assigned that ties to CDE’s funding source (GBL).

Self Study This file is available on CDE’s website. Colorado Department of Education PUBLIC SCHOOL FINANCE New Business Manager Training Session A self-study training session is available to new business managers on CDE’s website. Found under the “Training Materials” link on the PSFU website. Self Study This file is available on CDE’s website.

Self Study Training Session http://www.cde.state.co.us/cdefinance/TrainingMaterials.htm 120 slides of detailed information on the COA structure and coding examples.

Department Contact Information Leanne Emm – Assistant Commissioner 303-866-6202 emm_l@cde.state.co.us Mary Lynn Christel – Principal Consultant 303-866-6818 christel_m@cde.state.co.us Wendi Chapin – Principal Consultant 303-866-6137 chapin_w@cde.state.co.us Kirk Weber – Supervisor 303-866-6610 weber_k@cde.state.co.us Terry Christensen – Senior Consultant 303-866-6847 christensen_t@cde.state.co.us Adam Williams – Senior Consultant 303-866-6843 williams_a@cde.state.co.us

FPP Handbook & COA Changes Questions? We will conduct a brief survey of six questions.

FPP Handbook & COA Changes Please Participate in the following Survey Please provide comments and information on how we can improve to weber_k@cde.state.co.us Thanks! We will conduct a brief survey of six questions.