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  1. ACCOUNTING ISSUES AND CODING EXAMPLES Kathy Guralski, Auditor, School Finance Team Wisconsin Department of Public Instruction 2007

  2. Audio Difficulties? • Make sure the volume on Media Site live is turned up (volume button located beneath the speaker’s picture) • Make sure the volume on your computer is turned up (volume icon located on the right hand side of your computer task bar) • Contact your IT department

  3. This presentation is the second webcast that will focus on reporting by public elementary and secondary schools in the State of Wisconsin. • The first webcast focused on the Wisconsin Uniform Financial Accounting Requirements “WUFAR” • This second webcast will provide you with examples of revenue accounting transactions and how to properly account for them • The third webcast will provide you with examples of expenditure accounting transactions and how to properly account for them

  4. ACCOUNTING ISSUES AND CODING EXAMPLES • http://www.dpi.state.wi.us/sfs/wufar.html

  5. REVENUE CODING SOURCE CODES • TRANSFERS – IN FROM ANOTHER FUND (SOURCE 100) • LOCAL (SOURCE 200) • A WI DISTRICT (SOURCE 300) • DISTRICT OUTSIDE WI (SOURCE 400) • INTERMEDIATE EDUCATIONAL AGENCY (SOURCE 500) • STATE AGENCY (SOURCE 600) • FEDERAL AGENCY (SOURCE 700) • OTHER FINANCING (SOURCE 800) • OTHER REVENUES (SOURCE 900)

  6. SOURCE 100INTERFUND TRANSFERS Only certain funds are allowed to make transfers to other specific funds Operating Transfers An operating transfer is used to subsidizeactivities in another fund Must be used with function 411000 Indirect Cost Transfers An indirect cost transfer is used for payment to the district’s general fund for administrative and other “indirect” charges Must be used with function 418000 Residual Balance Transfers A residual balance transfer is used to close out the fund balance in the fund sending the transfer Must be used with function 419000

  7. SOURCE 100INTERFUND TRANSFERS Most common operating fund transfers Transfer from fund 10 to fund 27 (27R 411000 110) Transfer from fund 10 to fund 38 (38R 411000 110) Transfer from fund 10 to fund 50 (50R 411000 110) Transfer from fund 10 to fund 99 (99R 411000 110) Most common indirect cost transfers Transfer from fund 27 to fund 10 (10R 418000 127) Transfer from fund 99 to fund 10 (10R 418000 199) Most common residual balance transfers Transfer from fund 49 to fund 39 (39R 419000 149) Transfer from fund 39 to fund 10 (10R 419000 139)

  8. SOURCE 200REVENUE FROM LOCAL SOURCES 210 – Taxes 220 – Payments in Lieu of Taxes (Milwaukee only) 240 – Payments for Services 250 – Food Service Sales 260 – Non-Capital Sales 270 – School Activity Income 280 – Earnings on Investments 290 – Other Revenues from Local Sources

  9. PROPERTY TAX TRANSACTIONShttp://www.dpi.state.wi.us/sfs/doc/prop_tax.doc

  10. PROPERTY TAX LEVIES • On or before November 1, every public school board must approve the levy amounts necessary to operate and maintain district schools (s.120.12(3) Wis. Stats.) • May levy in funds 10, 38, 39, 41, 80

  11. PROPERTY TAX LEVIES • Entry to set up the current tax levy upon certification (November) General Fund Funds other than the General Fund

  12. PROPERTY TAX LEVIES • District receives taxes from municipalities February and August General Fund

  13. PROPERTY TAX LEVIES • Transfer of cash from fund 10 to other funds General Fund Funds other than the General Fund

  14. PAYMENTS FOR SERVICES • You are providing a service and receiving payment for that service • Example: • Non-resident student attending your district • Student is not open-enrolled • Resident district is not paying tuition • Parent is paying tuition • Source 241

  15. GIFTS • Gifts specified by donor to be used for operating purposes (i.e.playground equipment, school nurse, beautification of grounds) • Source 291 • Generally reported in Fund 21 • http://www.dpi.wi.gov/sfs/doc/fund21.doc

  16. OTHER REVEUE FROM LOCAL SOURCES • Source 290 • Student Fees/Fines • Regular school year fees for consumables, locker, towel, equipment usage, etc. • Rentals • Rental of district property from other than charges to students • Example - Local organization use of a room • Textbooks Revenues • Rental or sale of textbooks to pupils • Summer School Revenue • Fees collected for summer school programs • This will be requested by your auditor if your district has a membership audit

  17. SOURCES 300, 400 AND 500 300 – Source is a Wisconsin School District 400 – Source is an Out of State School District 500 – Source is a CESA or CCDEB

  18. PAYMENTS FOR SERVICE • Transit of Aids (310, 510) • Examples - • Another entity provides special education services for a resident student either on a tuition basis or as the fiscal agent for a cooperative program. Your district pays them for the service. They file for the aid which is received in the subsequent year. They transit to you the portion of the aid associated with the cost you reimbursed them for. • Your District is being reimbursed by another entity for cost you incurred that are part of a cooperative or packaged program with another school district, CESA or CCDEB. The other entity is claiming those costs on a state or federal grant and using the funds received on the grant to reimburse your district.

  19. PAYMENTS FOR SERVICE • Payments for Services (340, 440, 540) • Examples – • Open Enrollment – Charges to other school districts for instructional services your district provided to pupils participating in the open enrollment program (340) • Revenue from a CESA for instructional services your district provided to pupils (540)

  20. PAYMENTS FOR SERVICE • Payments for Services (340, 440, 540) • Examples • Cooperative Programs • Multi-District projects with COOP agreement • One District acts as fiscal agent • Fiscal agent maintains revenue and expenditure records • Cost is prorated to participating districts • Revenues cover expenditures • Fiscal agent reports the payment by the participating districts as a payment for services (source 340)

  21. COOP TRANSACTION REPORTING • Special Education COOP • Fiscal agent and participating districts account for activity in fund 27 • Other types of COOP agreements • Fiscal agent accounts for activity in fund 99 • Operating transfer from fund 10 is made for the fiscal agent’s portion of the cost • Participating districts account for their payment to fiscal agent in the appropriate fund of the activity which is most often the general fund

  22. COOP TRANSACTION CODING • Coop transaction coding • http://www.dpi.state.wi.us/sfs/doc/coop_trans.doc • Fiscal Agent Agreement Account Coding • http://www.dpi.state.wi.us/sfs/xls/fisagagree.xls • Fiscal Agent Requirements • http://www.dpi.state.wi.us/sfs/doc/fisagnt.doc • Fiscal Agent – Example of Level Three Documentation • http://www.dpi.state.wi.us/sfs/doc/fisagnt_example.doc • Link on School Financial Services website to COOP information • http://www.dpi.state.wi.us/sfs/coop_agree.html

  23. STATE AND FEDERAL AIDSOURCE CODES 600 AND 700

  24. STATE AND FEDERAL AID • ENTITLEMENTS • MOST BIG $ PROGRAMS • GENERAL AID, SPECIAL EDUCATION,TRANSPORTATION, SAGE • REVENUE WHEN $ APPROPRIATED • REIMBURSABLE GRANTS • “GRANT” PROGRAMS • CLAIMED ON PI 1086, SOURCE 630/730 • REVENUE WHEN REIMBURSABLE EXPENDITURE OCCURS

  25. SOURCE 600REVENUE FROM STATE SOURCES 610 – State Aid – Categorical 620 – State Aid – General 630 – State special Project Grants 640 – State Tuition Payments 650 – State “SAGE” Aid 660 – State Revenue Through Local Governments 690 – Other Revenue from State Sources

  26. STATE SPECIAL EDUCATION CATEGORICAL AID • Many different types of special education programs • PROGRAM OPERATED BY THE DISTRICT (DISTRICT EMPLOYS PERSONNEL) • PROGRAM OPERATED WITH A CONSORTIUM OF SCHOOLS • PROGRAM OPERATED BY CESA • PROGRAM OPERATED BY CCDEB • Costs funded by a combination of state, local and federal dollars

  27. Fund 27 • Fund 27 is where all revenues related to special ed are recorded. • Fund 27 acts like a “sub fund” to Fund 10 (general operations). • Fund 10 must always make a balancing entry in the form of a transfer to Fund 27 at the end of the year. • Fund 27 must have a “0” ending fund balance.

  28. Fund 27 - What’s up with that?? Fund 27 identifies Special Education Costs. A portion of these eligible costs are reimbursed with a categorical aid. A categorical aid is State aid that is intended for a specific purpose.

  29. How do I claim Special Ed Aid? • Fund 27 has its own annual claim • It is reported by a program installed on district computer and sent via e-mail to DPI • “Aid eligible” and “Non-aidable” costs are identified • http://www.dpi.state.wi.us/sfs/speced.html

  30. EQUALIZATION AID • Verify that your equalization aid equals what is reported in source 621 • Aid payment schedule http://www.dpi.state.wi.us/sfs/pay_aid_info.html • Final general aid worksheet http://www.dpi.state.wi.us/sfs/aid_worksheets.html

  31. ACCOUNTING FOR DELAYED EQUALIZATION AID PAYMENT

  32. State Revenue Through Local Governments • Revenue from local governments other than school districts, CESAs and CCDEBs • Examples (Source 660) • Payments in Lieu of Taxes for DNR property • State financial assistance payments received from Technical Colleges and Universities

  33. SOURCE 700REENUE FROM FEDERAL SOURCES 710 – Federal Aid – Categorical 720 – Impact and Disaster Aid 730 – Federal Special Project Aid Transited Through DPI 750 – Elementary and Secondary Education Act (ESEA) 760 – Job Training Partnership Act (JTPA) 770 – Federal Aid Received through Municipalities and Counties 780 – Federal Aid Received through State Agencies other than DPI 790 – Other Revenue from Federal Sources

  34. Grant Receivables • Reimbursable grants are based on cost and will require filing Cost-Reimbursement claim PI-1086 • Revenue is reported in the fiscal year that the cost is incurred • When a grant reimbursement claim is submitted BEFORE the end of the fiscal year, but the actual cash won’t be received until AFTER the start of the new fiscal year, a grant receivable needs to be booked in the ledger.

  35. Grant Receivables Why do it this way? In accrual accounting, revenue is recognized when it is earned. By submitting the reimbursement claims in June, the district “earns” the money in the 06-07 school year, so the claims need to be booked as revenue in 06-07; however, since the actual cash will not come until the 07-08 school year, a receivable is used to account for the expected cash.

  36. Grant Receivables Example: Title I-A 06-07 reimbursement claim for $26,493 is completed and sent to DPI on June 29. 06-07 EOY Adjusting Entry (both increases): Debit 10B-715000-002 Due from Oth Gov’nts $26,493 Credit 10R-000000-751 IASA Title 1 $26,493 8 07-08 Entry When the Cash Comes: Debit 10B-711000-001 Cash $26,493 (increase) Credit 10B-715000-001 Due from Oth Gov’nts $26,493 (decrease) (So, 07-08 revenue is not effected at all by this transaction, which is what we want because this amount was already booked as revenue in 06-07!)

  37. Grant Receivables 06-07 07-08 08-09 July 1, 2006July 1, 2007 ✔Submit 06-07 grant claims. ✔Book 06-07 revenue in appropriate Source and end-of-year 06-07 receivable in 715000-002. Receive 06-07 cash early in 07-08 fiscal year (shows up on 07-08 aids register) ✔Submit 07-08 grant claims. ✔Book 07-08 revenue in appropriate Source and end-of-year 07-08 receivable in 715000-002. Receive 07-08 cash early in 08-09 fiscal year (shows up on 08-09 aids register) Revenue should equal the Aids Register amount minus the beginning-of-the-year receivables (06-07 revenue) plus the end-of-year receivables (07-08 revenue).

  38. Aids register is available at: http://www.dpi.state.wi.us/sfs/online_ar.html

  39. SOURCE 800OTHER FINANCING SOURCES 850 – Reorganization Settlement 860 – Compensation for Sale of Loss of Fixed Assets 870 – Long-Term Debt Proceeds

  40. SALE OF SCHOOL PROPERTY • Statute 120.10(12) states that the school board has the power to “authorize the sale of any property belonging to and not needed by the school district. • Generally recorded in Fund 10 under source 860 • District may choose to place the revenue in another fund but only if so designated at the district’s annual meeting

  41. SOURCE 900OTHER REVENUES 950 – Contribution to Employee Benefit Trust 960 – Adjustments 970 – Medical Service Reimbursements 990 – Other Miscellaneous Revenues

  42. SOURCE/OBJECT 971/972http://www.dpi.state.wi.us/sfs/doc/rec_exp.doc

  43. SOURCE/OBJECT 971/972 • Source/Object 971 “Refund of Prior Year Expense” • E-Rate Refunds, Insurance Refund, CESA Refund, Dividend’s on Worker’s Compensation • Source/Object 972 “Property Tax and Equalization Aid Refund” • Property Tax Refund, Equalization Aid Refund, Taxpayer Levy Refund, Special DPI Approved Amount

  44. PROPERTY TAX REFUNDS • PAYMENT TO MUNICIPALITY FOR UNCOLLECTED PERSONAL PROPERTY TAXES • FUND 10 (10 E 492 000 972) • COLLECTION OF REFUND • FUND 10 (10 R 000 000 972) • SOURCE 212 LEVY – NET PAYMENTS* • OPTIONAL • NOT NEGATIVE *object 972 minus source 972

  45. MEDICAID “SBS” SERVICES SOURCE 981/989 • PROVIDED TO CHILDREN WITH DISABILITIES (SPECIAL EDUCATION) • COST IN SPECIAL EDUCATION FUND (27) • REVENUE IN GENERAL FUND (10) • CANNOT CHARGE MEDICAID COSTS AGAINST FEDERAL GRANT FUNDS • NOT A DEDUCTIBLE FOR STATE CATEGORICAL SPECIAL ED • http://www.dpi.state.wi.us/sfs/doc/medicaid.doc

  46. QUESTIONS? School Finance Auditors Kathy Guralski - (608) 266-3862 kathryn.guralski@dpi.state.wi.us Gene Fornecker - (608) 267-7882 eugene.fornecker@dpi.state.wi.us Natalie Rew - (608) 267-9212 natalie.rew@dpi.state.wi.us