[Busmgrs] A message from Barb Cruickshank: Chart of Accounts Committee Meeting Minutes -- please note new account codes and GASB 54 information

[WILTFONG Michael]

Chart of Accounts Committee Meeting
Monday April 12, 2010
10 AM to Noon

COSA Building
707 13th St SE, Suite B
Salem, OR  97301

Minutes and Subsequent Interviews

Present:        Andre Schellhaas, Beaverton SD
                Barb Cruickshank, ODE
Carol Ann Kirby, Portland Public Schools
                Debbie Bell, Corvallis SD
                Elizabeth Michaels, Tigard Tualatin SD
                LeAnn Smith, Beaverton SD
                Mike Wiltfong, ODE
                Terry Long, Gervais SD
                Tim Belanger, Oregon Trail SD
                Wes Rogers, Oregon City SD

Absent:         Angie Peterman, OSBA
Bonnie Maplethorpe, Tigard Tualatin SD
                Brian Reeder, ODE
                Chuck Swank, Grove, Mueller and Swank P.C.
                Claire Cotton, Sutherlin SD
                David Moore, Canby SD
                Doug Darden, LBL ESD
                Gary Ellwanger, ODE
                Jane Nofziger, Linn Benton Lincoln ESD
                Louise Kallstrom, Astoria SD
                Mike Schofield, NW Regional ESD
                Rod Danielson, Coos Bay SD
                Shari Lewis, Portland Public Schools
                Tim Collier, NW Regional ESD

The changes proposed for the 2010 PBAM will take effect on July 1, 2011 and will be available for the 2011-12 Budget process.

1.)     In response to GASB 54, the Chart of Accounts Committee provided the following:
a.  The Secretary of State - Audits Division office was contacted.  The SOS requires that GASB 54 be followed as the basic financial statements must be reported in accordance with GAAP.  Since SOS only gets involved after the fact, they have not addressed any specifics related to GASB 54.  I was directed to the Department of Revenue for any issues regarding Local Budget Law.
b.  After checking with Lee Peterson at the Department of Revenue regarding legal issues, it is recommended that if a district has a fund that under GASB 54 does not qualify as a Special Revenue Fund which needs to have a specific and continuous revenue source not including the beginning fund balance or transfers and the district does not want to roll that fund into the General Fund (an example would be a PERS Stability Fund), it could be funded by a diversion of local Ad Valorem Taxes to the Special Revenue Fund.
c.  This action will require a change in wording in the Resolutions Imposing and Categorizing Taxes.  See the updated resolutions below.

SAMPLE RESOLUTION IMPOSING THE TAX:
BE IT RESOLVED, that the Board of Directors of ___________ School District hereby imposes the taxes provided for in the adopted budget:
(1)     In the amount or at the rate of $x.xxxx per $1,000 of assessed value for operations;
(2)     In the amount or at the rate of $x.xxxx per $1,000 of assessed value for local option tax; and that these taxes are hereby imposed and categorized for tax year 2010-2011 upon the assessed value of all taxable property within the district.
(3)     In the amount of $1,000,000 for bonds;

and that these taxes are hereby imposed and categorized for tax year 2010-2011 upon the assessed value of all taxable property within the district as follows:



SAMPLE RESOLUTION CATEGORIZING THE TAX:
                        Education Limitation                    Excluded from Limitation
Permanent Rate Tax............................$x.xxxx/$1,000
Local Option Tax...................................$x.xxxx/$1,000
Debt Service Levy.................................................................................................$X,XXX,XXX

d.  ODE will revise their programming to include Fund 200, Source code 1110 - Ad Valorem Taxes Levied by a District in the State School Fund calculation.  By capturing both Fund 100 and 200, Source code 1110, the State School Fund total local revenue portion will remain unchanged.
e.  Several audit firms are recommending that the board positively affirm that fund balances currently in a Special Revenue Fund should remain in the Special Revenue Fund.  Checking with your auditor may be a good idea.

2.)     Also to update the Chart of Accounts to align with the federal Fund Equity requirements in GASB 54 the following Fund Equity accounts have been edited, deleted or added.  Fund Equity is not submitted to ODE electronically, so you may use them as soon as your computer systems will allow.

760     Other than Unassigned (Special Purposes)-Fund Balance. A reserve which represents the segregation of a portion of a fund balance to indicate that assets equal to the amount of the reserve are tied up and are, therefore, not available for appropriation. It is recommended that a separate reserve be established for each special purpose. One example of a special purpose would be restricted federal programs.
761     Non-spendable Fund Balance.  Amounts that cannot be spent due to form; for example, inventories and prepaid amounts. Also, long-term loan and notes receivables, and property held for resale would be reported here unless the proceeds are restricted, committed or assigned.  OR Amounts that must be maintained intact legally or contractually (corpus or principal of a permanent fund).
762     Restricted Fund Balance.  Amounts constrained for a specific purpose by external parties, constitutional provision or enabling legislation.
763     Committed Fund Balance.  Amounts constrained for a specific purpose by a government using its highest level of decision-making authority. It would require action by the same group to remove or change the constraints placed on the resources.  Action to constrain resources must occur prior to year-end; however, the amount can be determined in the subsequent period.
764     Assigned Fund Balance.  Amounts intended to be used by the governing body for specific purposes.  Amounts reported as assigned should not result in a deficit in unassigned fund balance.  In the general fund assigned fund balance represents the amount that is not restricted or committed.

770     Unassigned Fund Balance.  In the general fund, amounts not contained in other classifications i.e. non-spendable, restricted, committed or assigned. The general fund is the only fund that would report a positive amount in unassigned fund balance.  For all governmental funds other than the general fund, amounts expended in excess of resources that are non-spendable, restricted, committed or assigned (a residual deficit). In determining a residual deficit, no amount should be reported as assigned.

3.)     The Chart of Accounts Committee unanimously rejected the suggestion to assign specific fund codes to major Special Revenue Funds.  The suggestion was made to eliminate sending in separate reports requested by Food Service and other governmental agencies.

4.)     .Two years ago, Tim Belanger suggested that districts go back to the old coding where Function code 1111 was K-5 and to eliminate Function code 1112.  The committee decided to research it at that time.  To date there has been no resounding reasons to prevent this change.  The COA committee voted to make this change effective July 1, 2011, so your 2010-11 Budgets and Actuals will still use both Function codes 1111 and 1112.


If you should have any questions, please contact Barb Cruickshank.

Thank you,

Barb Cruickshank
Oregon Dept of Education
(503) 947-5916
(503) 378-5156 Fax
barbara.cruickshank at state.or.us<mailto:barbara.cruickshank at state.or.us>



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