 Daniel Lunghofer, MPA Mike Dooley, CSBO Ramona Garner May 3, 2013

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 The Accounting Manual is published cooperatively by OSPI and SAO.  The School District Accounting Advisory Committee (SDAAC) makes recommendations for updates to the manual in their role of advising on accounting, budgeting, financial reporting, and related matters.  SDAAC meetings are scheduled now through December 2013 for the 2014–2015 Accounting Manual updates.  The SDAAC web page: o o Has the complete description of changes to the 2013–2014 manual. o Has meeting agendas, materials, list of committee members, etc. 3

 Chapter 1 – Principles of Accounting o Added a discussion about fund balance classifications. o Clarified that for a Commitment to take place, there must be a formal action of the school board. o Can be either board policy or a separate resolution; must be disclosed in Notes for each Commitment. o GASB Update: A resolution for a Commitment must be separate from the resolution fixing the budget. 4

 Chapter 3 – Accounting Guidelines o Updated section on short-term and long-term obligations. If you issue a RAN for capital purposes, you must report the entire balance as a liability in the fund receiving the proceeds. o Added clarifications from WACs about interfund loans. Not allowed from ASB Fund, DSF, TVF. Not allowed to ASB Fund. 5

 Chapter 4 – General Ledger Accounts o Added clarifying language in GLs 230 and 240 for districts who maintain a separate payroll account. o Opened GL 250 in GF, CPF, and TVF for LOCAL program proceeds. o Opened GL 819 in TVF. o Opened GL 830 in DSF. o Changed GL 862 to Committed. 6

 Chapter 5 – Revenue Accounts o Deleted 4166 Student Achievement. o Opened the following in the TVF: 4100 Special Purpose—Unassigned Other State Agencies—Unassigned General Purpose Direct Federal Grants—Unassigned Special Purpose—OSPI Unassigned Direct Special Purpose Grants Federal Grants Through Other Entities—Unassigned. o Opened Revenue 8521 Educational Service Districts— Special Education. 7

 Chapter 6 – Expenditure Accounts o Deleted Program 66 Student Achievement. o Opened Activity 28 Extracurricular in: Program 52 Other Title Grants Under ESEA—Federal. Program 69 Compensatory—Other. o Opened Object 8 Travel in Activities 62, 63, and 64 in Program 45 Skills Center—Basic—State. 8

 Chapter 7 Journal Entries o Added sample entry for accrual of deductible revenue recovery. o Deleted Student Achievement entries. o Expanded LOCAL program entries. o Clarified accounts to be used when receipting Medicaid Reimbursement from the Health Care Authority. 9

 Chapter 8 – Financial Reporting o Changed Schedule of Long-Term Debt to Schedule of Long-Term Liabilities. o Added a schedule for each fund. o Added a column for “Amount Due Within One Year.”  Chapter 9 – Information Unique to Each Fund o Added information about transfer of trust funds. 10

CChapter 10 – Grant Management oToThis chapter was completely re-written. oAoA number of topics in the chapter were covered in this morning’s Grant Management 101 Workshop. oDoDo four things: Read the chapter. Know the rules. Follow the rules. Keep your district out of trouble. 11

 Appendix B – Notes to the Financial Statements o The Notes have moved (will be moving) to the Administrative, Budgeting, and Financial Reporting Handbook (ABFR). o Still required to be completed by school districts. o Use the most recent version of Notes available when you prepare them. 12

 Appendix C – GASB Statements o Included a discussion of fund balance reporting under GASB 54. o ASB: Restricted for Fund Purposes (GL 819). o DSF: Restricted for Debt Service (GL 830) except forest revenue-based net assets. o CPF: Depends on the source of money. Levy money reported in Committed Fund Balance. o TVF: Restricted for Fund Purposes (GL 819). 13

Michael J. (Mike) Dooley CSBO, WMS Supervisor School District and ESD Budgeting (360) voice (360) TTY (360) FAX 14

 New Items: o Closed in the GF and CPF: Revenue Account 4166—Student Achievement. o Added in the TVF: Revenue Account 4100 Special Purpose—Unassigned. Revenue Account 4300 Other State Agencies—Unassigned. Revenue Account 5200 General Purposes Direct Federal Grants—Unassigned. Revenue Account 6100 Special Purpose—OSPI Unassigned. Revenue Account 6200 Direct Special Purpose Grants. Revenue Account 6300 Federal Grants Through Other Entities—Unassigned. 15

 New Items: o Program 66 is closed. o In Program 45, within Activities 62, 63, and 64 Object 8 is open. o In Programs 52 and 69, Activity 28 is open and Objects 0, 2, 3, 4, 5, 7, 8, and 9 with all authorized duty codes are open. o In Program 99, Activity 65 is open and Objects 0, 5, and 7 are open. 16

 New Items: o Added Revenue Accounts “6140 Impact Aid—Construction” and “6340 Impact Aid—Construction” in all columns. o Added Revenue Account “5600 Qualified Bond Interest Credit—Federal” in all columns. o Added GL 819 Restricted to Fund Purposes in TVF. 17

 New Items: o Updated Budget Information Edit to perform as follows: o Updated Budget Information Edit to perform as follows: o Added new Budget Information Edit to perform as follows: 18 There are expenditures in Program 45 or Program 46, but district does not have Skills Center. Amount 1 = Mask 45XXX or Mask 46XXX Applies to any district other than those listed in edit Valid in F- 195 and F- 200 There are expenditures in Program 45 or Program 46, but district does not have Skills Center. Amount 1 = Mask 45XXX or Mask 46XXX Applies to any district other than those listed in edit Valid in F- 195 and F- 200 On page DS1, Column 3, Line B, Total Expenditures are greater than zero. District should show outstanding bonds on page DS4. Amount 1 = Item No. 532 (if greater than zero) Amount 2 = Item No. 585 (if zero) Valid in F- 195

 Budgeted Beginning Fund Balance Review: o OSPI will review each school district’s budgeted beginning fund balance once the F-196 information is received. o The budgeted ending fund balance will be recalculated based upon the actual ending fund balance from the F-196. o If the result is a negative fund balance, your school district can expect a request from OSPI to revise its budget. o Your school board will have 30 days of receiving notice to submit a revised budget to OSPI. 19

 Budgeting Receivables: o If your school district is unable to submit a budget extension (or budget for that matter) when revenues and fund balance do not exceed expenditures, it must request in writing to include receivables, collectible in future periods, to balance the budget or budget extension. o When a school district budgets receivables, OSPI places it under binding conditions which is intended to have it recover from its deficit budget situation and move to a stable financial position. o This usually places your ESD in an oversight position of your school district’s financial operations. 20

 Budget Extension Reminders: o We know all of you are busy preparing your new year budgets, but don't forget any remaining current year budget extensions. August is the final month to file your F-200 budget extensions with OSPI. Depending on when you submitted your current year F-200 for approval and when you printed your new year F-195 budget document, you may need to reprint your new year budget to allow your current year budget extension to be accurately displayed in the middle column of your new year F

 Budget Extension Reminders: o Review budget monthly to determine necessity of an extension. Must complete a budget extension prior to incurring expenditures in excess of the total appropriations as required by RCW 28A For 1 st class school districts, adopted and filed prior to incurring expenditures that exceed the appropriation in each fund. For 2 nd class school districts, adopted and approved by both the ESD and OSPI prior to incurring expenditures that exceed the appropriation in each fund. The ESD and OSPI will adjust budget extensions that do not meet this requirement. WAC requires that the Associated Student Body initially review revisions to the Associated Student Body (ASB) budget. Therefore, an extension of the ASB Fund budget should occur prior to the closing of school to secure the necessary student involvement. 22

 Cash File Reminders: o F-197 application in EDS is available to school districts for (recommended) monthly reconciliation to your county treasurers’ report. o F-197 Reconciliation Excel template is in Chapter 5 of the Administrative, Budgeting, and Financial Reporting (ABFR) Handbook. o Amended WAC is effective May 6, The rationale behind replacing the phrase “ending net cash and investments, revenues and expenditures” with the more generalized word “amounts” is that the proposed language allows districts to reconcile in a more appropriate way and makes sure that there is agreement between the county treasurers’ records and the school districts’ records. 23

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Notice is hereby given to school districts and ESDs, in accordance with WAC , that failure to adhere to the due dates below could result in a delay of apportionment payments. The final date for filing or forwarding will be considered as having been met if the postmark or other evidence indicates shipment prior to the due date or the next workday if the due date falls on a weekend. Final Action DateAction October 25 School Districts - Final date for submission of completed F-196 data from the school district to the local ESD. The data will be submitted electronically and/or on an F-196 manual form. Districts not able to submit by the October 25 due date may request a waiver by or written notice to the ESD. November 1ESDs - Final date for the ESD to review and forward the certification page back to the school district for signature. November 8School Districts - The signed certification page is due from the school district to the ESD. November 15ESDs - Final date the signed certification page by the ESD is due at OSPI, School Financial Services. 26

Please make a note of these dates, it is not too early to start gathering the needed data and balancing system items for year-end closing. Starting now on this process will make meeting the listed deadline dates easier for you. In accordance with WAC , districts and ESDs that fail to adhere to the due dates could have a delay of apportionment payments. The final date for filing or forwarding will be considered as having been met if the postmark or other evidence indicates shipment prior to the due date or the next workday if the due date falls on a weekend. 27

 The F-196 Process is completed in the EDS platform.   If you have not accessed the EDS platform, contact your ESD for assistance. 28

The SAFS applications have been developed to be viewed with Microsoft’s Internet Explorer 6.0 or higher. Results may be unpredictable using other browsers. To help ensure your browser refreshes the application pages correctly, set the browsing option as follows in Internet Explorer: go to Tools -> Internet Options -> General Tab -> Browsing History -> Settings. Under the “Check for newer versions of stored pages” heading, select ‘Every time I visit the website.’ 29

 There are numerous formatting changes to the F-196 this year, but not too many accounting changes.  Bulletin No dated March 28, 2012, describes the changes in more depth. o The following revenue account has been removed: Revenue Account 4134—Middle School CTE. o The following items have been added: Revenue Account 8200—Private Foundations. GL 819—Restricted for Fund Purposes in ASB Fund. GL 825—Restricted for Skills Centers in GF and CPF. GL 828—Restricted for Carryover of Food Service Revenue in GF. GL 830—Restricted for Debt Service was opened in DSF. 30

 OSPI website link: o

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 Districts are encouraged to access these templates to run the MOE tests for mid-year and budget purposes and the 2012–13 recovery and carryover information. 34

 There are no changes to the Certification Page. Districts are required to hand enter the number of days school was operated.  Districts that have a waiver from Washington State Board of Education will enter the number of days school was operated. Include a copy of the waiver letter with the signed Certification Page.  Verify that the Ending Total Fund Balance on the Certification Page is the same as the Total Fund Balance on the Balance Sheet and the Ending Total Fund Balance on the Statement of Revenues, Expenditures, and Changes in Fund Balance. 35

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 As stated in the Addendum to Bulletin No , dated January 12, 2012, Attachment B, districts that coded staff under duty code suffix “4,” for the purposes of recording the costs of innovative activities included in supplemental contracts, will submit a brief description of these innovative activities with the district’s F-196.  On The Data Requirements for Supplemental Reports, item D requires an entry. Although there has not been any “cost of living” increases for several years, under RCW 28A districts must certify either “yes” or “no” that it has spent funds provided for cost-of-living increases on salaries and salary-related benefits.  Districts that receive the Medicaid reimbursement should use Revenue code 6321 because the Medicaid reimbursement is coming from DSHS, not OSPI. 38

 There are no changes to the manually entered distorting items such as election expenses, flow-through grants, alterations/renovations, and fines/penalties. This data is used in the Federal Restricted and Unrestricted Indirect Rate. 39

40  There are no changes to the manually entered Indirect Expenditures. The district should enter audit costs, legal costs, public relations expenditures, termination leave for federally supported staff, information system expenditures, pupil management and safety costs, and space and occupancy costs, if a cost plan has been established.  Remember that legal costs are very restrictive. Only enter costs associated with the interpretation of laws, regulations, or board policy.  Also remember that no student record costs can be entered for information systems. Only enter costs associated with fiscal systems (i.e., WSIPC fees, districtwide IT support).

 There is help for determining what goes into the Indirect Rates. Information regarding Restricted and Unrestricted Indirect Rates can be found on the OSPI website at: o o Indirect Cost Rates Federal Indirect Rate Frequently Asked Questions. o o Chapter 10 of the Accounting Manual – Grants Management. 41

 Information can also be found on the Office of Management and Budget (OMB) website. OMB publishes a number of circulars pertaining to various aspects of grants and federal awards. OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, outlines the guidelines for charging costs to federal grants, including direct costs and indirect costs.  The 5 year Restricted Indirect Costs Rates have been updated and posted.  Updates to the Info edits will be made for the Preliminary Special Education Maintenance of Effort Report. Districts should note that passing the preliminary test does not necessarily mean that a district has passed Maintenance of Effort for Special Education. Final tests are done following the F-196 process. 42

 The F-196 contains a preliminary MOE test for Special Ed.  This is a basic version of the actual test.  Districts need only pass one of the four tests to pass MOE. o State and Local, in aggregate. o State and Local, per pupil. o Local, in aggregate. o Local, per pupil.  If a district relies on a Local resources test, OSPI must do a lookback to the last year a district relied on a Local resources test, not just the previous year.  If you pass MOE on a Local test on the F-196, be aware that OSPI must do this lookback.  The F-196 will include an info edit about this lookback notice for districts who rely on a Local resources test. 43

 After your ESD approves your F-196, and you feel that your financial statements are correct, you can proceed with your year- end close. Any review of the district’s F-196 by OSPI does not affect the district’s year-end close process.  If your district requires that an F-196 revision be made, please contact Ramona Garner via at: to request an MS Word document. Upon receipt of your , I will send the district’s F-196 and instructions for making revisions. Don’t forget to cc your ESD when making a revision 44

 Questions and comments are always welcome and appreciated. Whenever possible, ing your question is beneficial in assuring that OSPI understands the question and allows a “paper trail” for OSPI and the district if the question should arise again. 45