School Accounting 101 - PowerPoint PPT Presentation

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School Accounting 101


School Accounting 101 Presented by: Mary Kay Beer Chief, School Accounting Section LouAnn Caldarella Staff Accountant School Finance Division – PowerPoint PPT presentation

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Title: School Accounting 101

School Accounting 101
  • Presented by
  • Mary Kay Beer
  • Chief, School Accounting Section
  • LouAnn Caldarella
  • Staff Accountant
  • School Finance Division
  • LECS Comptrollers Office

Lets look at the numbers
  • This year we had 707 reporting entities
  • submitted by November 19
  • 501 School Districts 285
  • 29 Intermediate Units 18
  • 102 Charter Schools 62
  • 67 Vocational Technical Schools 42
  • 8 Special Schools 7

Back to Basics - Fund Reporting
  • Entities that report using governmental
    accounting, must establish their records based on
    the fund accounting system.
  • All financial activities that occur within your
    school must be accounted for in one of the 11
    governmental fund types.
  • All funds for your LEA must be reported on the

  • A minimum number of funds should be maintained.
    Separate physical accounts do not require
    separate funds.
  • It is required that all capital projects funds be
    folded into one fund and all debt service funds
    be folded into one fund for Commonwealth
    financial reporting purposes.

  • Student Activity funds are agency funds. Use
    fiduciary fund 81 on the AFR. Some examples of
    student activity funds are the
  • ski club and drama club.
  • Fiduciary funds The only type of Trust fund
    that is accounted for as a Fiduciary fund is one
    that holds money for someone other than the LEA.
    If this money is for your school, then it is not
    to be recorded as a fiduciary fund.

Major Fund Criteria
  • If the fund does not fit the criteria for a Major
    fund, then it must be classified as a Non-Major
    fund and reported on the fund statements in that
  • To meet the qualification for "Major Fund" status
    under GASB Statement 34, any given fund element
    must exceed both the 5 and 10 thresholds.
  • The General Fund and Food Service Funds are
    considered major funds.

Revenue Recognition
  • Payments received in July and August that were
    applicable to the prior year, should be accrued.
    One example would be transportation.
  • Do not confuse these with payments actually for
    the new fiscal year.
  • Social Security reconciliation revenue should be
    accrued to the prior year.

Revenue Recognition contd
  • The payment letters and form 2548 are tools for
    your use in determining where to properly account
    for revenues and deductions. These are checked
    on your AFR for accuracy of reporting.
  • There are validations to ensure that your school
    report matches what is reported on the 2548.
  • You will be contacted for discrepancies.

Reconciliation Statements
  • Crosswalk the fund financial statements to the
    entity-wide statements.
  • We were very lenient up to this point in
    accepting the wording on these statements.
  • LEAs need to explain why there are differences
    between these financial presentations.

Sample Reconciliation Information for the
Statement of Activities
  • Total net change in fund balances -
    governmental funds XXX,XXX
  • Amounts reported for governmental activities in
    the statement of activities are different
  • Capital outlays are reported in governmental
    funds as expenditures. However, in the
    statement of activities, the cost of those assets
    is allocated over their estimated useful lives as
    depreciation expense. This is the amount by
    capital outlays exceeded depreciation in the
    current period.

  • Some property taxes will not be collected for
    several months after the District's fiscal year
    ends, therefore they are not considered as
    "available" revenues and are deferred in the
    governmental funds. Deferred tax revenues
    increased by this amount this year.
  • XX,XXX

  • Repayment of bond principal is an expenditure in
    the governmental funds, but the repayment reduces
    long-term liabilities in the statement of net
    assets. This is the amount by which proceeds
    exceeded repayments.
  • Change in net assets of governmental activities

Vocational Education
  • Starting with fiscal year 04-05 reporting, there
    will no longer be an elementary column in
    function 1300.
  • The only expenditures for a school entity other
    than a vo-tech in the 1300 function should be for
    PDE approved vo-tech programs.
  • Refer to https//
  • to see if your program is PDE approved.

Why is AFR Accuracy Important?
  • Title 1 money to PA
  • Actual Instructional Expense
  • Restricted Indirect Cost
  • Requests by taxpayers, other states, the
    legislature, PSEA and PSBA
  • Tuition Rate used to calculate
    payments/deductions for Incarcerated Ed, PRRI,
    APS, 1305 1306 students

  • Federal Reports
  • Use the information extracted from the revenues,
    expenditures and statements.
  • Sent to the USDE and used in the calculation for
    Title I money to PA.
  • Also used in a variety of reports comparing
    spending and resources for our state versus the
    other 49 states.

  • Combination of School Finance and Child
    Accounting responsibilities and uses.
  • Defined by PA Public School Code, Section 2501,
    paragraph 11.1
  • Based on AFR data (SF), WADM (weighted average
    daily membership) calculation(CA)
  • To be used by AVTS and the Dept of Education for
    various calculations.
  • Component used in the calculation of Secondary
    Voc Ed Subsidy.

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Tuition Rate
  • Pennsylvania School Code of 1949, Sections 2561
    and 2562 is the legislative authority underlying
    the certification of the Tuition Rate
  • Rates are based on the schools Annual Financial
    Report (AFR) PDE-2057.
  • To be used by schools to calculate charges for
    nonresident students attending the school.

Details of Tuition Rate Form
  • Tuition Rate is based on 2003-04 school year for
    use during the 2004-05 Fiscal Year.
  • School Entity Share of Social Security (7810) and
    Retirement (7820).
  • Broken down by Elementary (K-6) and Secondary

Tuition Calculation Example 1
Tuition Calculation Example 2
(No Transcript)
Receiving the PDE-2061 and PDE-2058
  • Tuition Rate and AIE are sent by mail around June
    of each year.
  • Request for Information Form must be filed with
    LECS Comptrollers Office if Tuition Rate/AIE are
    misplaced. Reports will be faxed or surface
    mailed (not available by email).
  • For information purposes, all school Elementary
    and Secondary Tuition Rates are posted to the
    School Finance Website as an excel file.This is
    not the certified form, it is an FYI only.

Points to Remember
  • Use care when completing the detailed expenditure
    section of the AFR.
  • Tuition Rates will NOT be revised once certified.
  • Verification procedures for Tuition Rate
  • and AIE on located on School Finances website
  • Federal Expenditures are NOT included in the
    tuition rate calculation.

Restricted Indirect Cost Schedule
  • 2300 only include the cost of the general audit
    of the school and, if recorded in 2310, the
    salary of the business manager if they also serve
    as the board secretary.
  • 2500 there is a formula to limit this number
  • 2830 only include non federal costs
  • 2840 only include non federal costs
  • Unallowable costs will be deleted from the

Is this proper Accounting?
  • Netting down revenues and expenditures
  • Long term liability for rental reimbursement. The
    Commonwealth does not recognize this as a
    payable, so you should not recognize this as a

Common Errors
  • Not accruing revenues when applicable.
  • Recording expenditures in incorrect functions or
    objects. Refer to the instructions on the payment
    letters or the audit confirmation for correct
  • Only recording the General fund on your fund
    financial statements.
  • Recording AG findings for payments/deductions
    before these transactions are processed by PDE.

More Common Errors
  • Waiting until you have completed your MDA to
    submit your AFR
  • Not sending in your required paperwork
  • Sending in your data file with validation errors
  • Getting frustrated with your AFR validations and
    not contacting the School Finance Division for

Issues We are Reviewing
  • Alternative education recording of
  • GASB Statement 45 new codes?
  • Revised chapters of the Accounting Manual

  • Contact information
  • Mary Kay Beer
  • phone (717) 783-9001
  • email
  • LouAnn Caldarella
  • phone (717) 783-9003
  • email
  • School Finance email
  • LECS Comptrollers website
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