1. Budgetary Coding 101 2015 ESEA Directors Institute August 27, 2015

2. Office of Chief Financial Officer Brad Davis Regional Finance Consultant Brad.Davis@tn.gov

3. Budgeting

4. Fund Accounting Fund Accounting—an accounting system that stresses accountability over profitability. It is used by non-profits and governments. A Fund is a self-balancing set of accounts separated in accordance with law or regulation.

5. Fund Accounting Education Funds: –141 General Purpose Fund accounts for general operations not accounted for in another fund –142 Federal Projects Fund— accounts for grants from the federal government –143 Central Cafeteria Fund accounts for the operation of the cafeteria –144 Transportation Fund –177 Education Capital Projects Funds accounts for building, building improvements

6. Account Codes Account Codes are the set or combination of numbers used in an accounting system that refer to a specific account within the general ledger. The County Uniform Chart of Accounts, published annually by the Comptroller’s office defines the structure of and actual account codes used in county government in Tennessee. http://www.comptroller.tn.gov/la/pdf/UniversalChartOfAccounts.pdf

7. Standard Sub-funds A sub-fund separately accounts for a specific grant within the Federal Projects Fund (142). Standard sub-funds as recognized by the Department of Education (choose any number in the range below): –010-019 Consolidated Administration –100-109 Title I-A, Improving Academic Achievement –110-119 Title I-A, School Improvement –120-129 Title I-G, School Improvement –200-209 Title II-A, Training and Recruiting –220-229 Teacher Incentive Fund –300-309 Title III-A, English Language Acquisition –430-439 Title IV-B, 21 st Century

8. Standard Sub-funds Standard sub-funds (cont.) –600-609 Title VI-B, Rural and Low Income Schools –700-709 Title X-C, Homeless –800-809 Carl Perkins –890-899 Special Education Discretionary –900-909 IDEA-B –910-919 IDEA Preschool –960-969 Other Federal Grants –999 General Purpose Transfer

9. Account Codes Accounts—sometimes referred to as categories or functions –Assets: 10000-19999 –Liabilities: 20000-29999 –Equities: 30000-39999 –Revenues: 40000-49999 –Education Expenditures: 70000-79999 –Debt Service Expenditures: 80000-89999 –Capital Projects/Transfers: 90000-99999

10. Account Codes Accounts/categories used in ESEA budgets: –71100—Regular Instruction general instruction in K-12, includes regular classroom teachers and aides –71150—Alternative Instruction teachers, aides, expenses for alternative program –72120—Health Services physical and mental health services—includes nurses –72130—Other Student Support support provided by guidance counselors, psychologists, social workers, assessment personnel

11. ACCOUNTS/CATEGORIES cont.  72210—Regular Instruction Supervision  includes supervisor of instruction, instructional computer personnel, primarily accounts for administration of regular instruction. May include a secretary or clerical personnel. 72610—Operation of Plant –accounts for activities that keep the building clean and operational. Includes guards, custodial staff, cleaning supplies, utilities, building insurance. Have been used in ESEA to account for expenses relative to safety and security.

12. ACCOUNTS/CATEGORIES cont. 72710—Transportation –accounts for transporting students to and from school and to school activities. Transportation is an allowable expense in Public School Choice and Homeless, but ESEA cannot pay for general transportation. 73100—Food Service –expenditures relative to providing meals for students. Is only an allowable expense in Title I preschools. 99100—Transfers Out –accounts for transfers to other programs and indirect cost

13. EXPENDITURE OBJECT CODES 100-199 Salaries 200-299 Employee Benefits 300-399 Contracted Services 400-499 Supplies and Materials 500-599 Other Charges 600-699 Debt Service 700-799 Capital Outlay Commonly used object codes: –116-Classroom Teacher, 163-Educational Assistants, 201—Social Security, 399-Other Contracted Services, 429-Instructional Supplies and Materials, 524-In Service/Staff Development, 722-Regular Instruction Equipment

14. BUDGETING STAFF DEVELOPMENT/TRAVEL Use object code 196 (In Service Training) to pay salaries of employees providing training. Use object code 524 (In Service/Staff Development) to pay all other expenses relative to providing or receiving professional development. Includes travel to professional development, meals, parking, and hotel charges when attending professional development, conference registration fees, and fees paid to vendors who provide professional development. Use object code 355 (Travel) for mileage between schools/central office

15. OTHER BUDGETING CONCERNS Don’t forget to budget employee benefits when budgeting employee salaries. Calculate benefits on salaries of all groups of employees within each category. Ask finance personnel for current rates.

16. OTHER BUDGETING CONCERNS Rates expressed as percent of salaries: –Social Security (201)—6.2% –State Retirement (204)—9.04% certified rate get non-certified rate from finance office. These rates will change every year, beginning in 2016. –Medicare (212)—1.45% –Unemployment compensation (210) rate unique to each district Per Employee amounts (get amounts from finance office): –Life Insurance (206), Health Insurance (207), Dental Insurance (208)

17. OTHER BUDGETING CONCERNS Contractors providing professional development –Benefits are not paid on payments to contractors –Payment is governed by the contract

18. Title I Maintenance of Effort

19. TITLE I MOE In order to receive their full Title I allocation.. Each year, districts must spend at least 90% of their previous years total expenditures (per pupil) in their General Purpose fund.

20. TITLE I MOE Local Finance calculates Maintenance of Effort based on your net past year and second preceding year expenses. The law requires that each system must maintain a 90% maintenance of effort to be complaint. Local Finance will then inform Federal Programs if any system fails to meet MOE. –EX: System A spent $1,000,000 in General Purpose in 13-14 and $800,000 in 14-15. –MOE requires an expenditure of 90% of $1,000,000 be spent in 14-15. System A spent 80% in 14-15.

21. Title I MOE Federal Programs then recalculates the non-compliant systems’ per pupil expenditures by dividing 3 rd month ADM/ADA/enrollment counts for those same two years. –EX: System A spent $1,000 per student in 13-14 and $850 per student in 14-15 –System A spent 85% in 14-15.

22. Title I MOE Any system which fails to make MOE using either of these to methods is non-compliant and Federal Programs MUST reduce most of the upcoming allocations by the same percentage by which the LEA missed compliance. –EX: System A will have their FY16 allocations reduced by 5% (least offensive) –The following year, the LEA is again assessed using the required expenditure amounts as if they had been compliant last year.

23. Questions Feedback TASL Credit Keyword

24. Questions?

25. Feedback Survey At the end of each day, please help us by providing feedback. Today, please use the survey link below. –https://www.surveymonkey.com/r/2015-ESEA-Aug-27https://www.surveymonkey.com/r/2015-ESEA-Aug-27

26. TASL Credit In order to receive 14 TASL credits for the 2015 ESEA Directors Institute, the participant must attend two full days, August 26 – 27. –Partial credit cannot be earned. –Use the form provided at the back of the agenda to collect keywords throughout the conference. –After the conference, go online to https://www.surveymonkey.com/r/2015-ESEA-TASL and enter your information. https://www.surveymonkey.com/r/2015-ESEA-TASL You will not receive credit if you do not complete the online form by September 4, 2015.

27. FRAUD, WASTE or ABUSE Citizens and agencies are encouraged to report fraud, waste or abuse in State and Local government. NOTICE: This agency is a recipient of taxpayer funding. If you observe an agency director or employee engaging in any activity which you consider to be illegal, improper or wasteful, please call the state Comptroller’s toll- free Hotline: 1-800-232-5454 Notifications can also be submitted electronically at: http://www.comptroller.tn.gov/hotline