The Other Funds Funds 21, 38, 39, 41, 46, 49, 50, 60, 72, 73, 80, 91 and 99

1. The Other FundsFunds 21, 38, 39, 41, 46, 49, 50, 60, 72, 73, 80, 91 and 99 Terry Casper, Accountant Bruce Anderson, Consultant Kalahari Resort & Conference Center March 20, 2019 WASBO Accounting ConferenceNew Accounting Staff Track

2. How does DPI define a “Fund”? A fund is an accounting entity consisting of a self-balancing set of asset, liability, and equity accounts used to account for the district's financial transactions in accordance with laws, regulations, or restrictions. The Department of Public Instruction requires reporting of various revenues and expenditures within specified funds. A general description for each Fund can be found on pages 5-1 to 5-5 in the WUFAR http://dpi.wi.gov/sfs/finances/wufar/overview webpage

3. How does DPI define a “Fund”? Instructional Funds: Instructional funds are funds where elementary and secondary instruction are recorded (i.e. K - 12) activities [10, 21, 23, 27, 29, 91, 93, and 99] Debt Service Funds: These funds are used for recording transactions related to repayment of the following general obligation debt. [38 and 39] Capital Projects Funds: These funds are used to account for expenditures financed through the use of bonds, promissory notes... [41, 44, 45, 46, 48, and 49]

4. How does DPI define a “Fund”? Food and Community Service Funds: These funds are used to account and report transactions of the district's food and community service activities. [50 and 80] Fund 60 Agency Fund: This fund is used primarily to account for assets held by the district for pupil organizations. Trust Funds: These funds are used to account for assets held by the district in a trustee capacity for individuals, private organizations, other governments and/or other funds. [72, 73, and 76]

5. The “Other Funds” • 21: Special Revenue Trust Fund • 38: Non-Referendum Debt Service • 39: Referendum Debt Service • 41: Capital Expansion Fund • 46: Long Term Capital Improvement Trust Fund • 49: Capital Projects • 50: Food Service • 60: Agency Fund • 72: Private Purpose Trust Fund • 73: Employee Benefit Trust Fund • 80: Community Service Fund • 91: Packaged Services (CESA) Fund • 99: Other Package & Coop Program Fund

6. Fund 21 Account for special revenue funds that can be used for district operations Mostly contributions from gifts and donations from private sources for which no repayment or special service is expected Must be expended pursuant to donor restrictions or board commitments May have a positive fund balance at year end

7. Private ontributions Record in Fund 21 when the expenditures will not occur in the same year as the revenue. Fund 21 activity is excluded from the shared costs calculation. Record in Fund 10 when all of the expenditures will occur in the same year as the revenue. Can be recorded in funds 27, 29, 38, 39, 49, 50, 72, 80, 99 if the contribution relates to the purpose of that fund.

8. Fund 60 Agency Fund • Used primarily to account for assets held by the district on behalf of pupil organizations • Parent organization funds may be accounted for here • May not be a separate 501(c)(3)

9. Fund 60 Agency Fund • Only balance sheet accounts (assets & liabilities) are reported in Budget and Annual reports But… • Records of receipts and disbursements must be maintained locally and will be examined during audit

10. Fund 60 Pupil Organizations • Funds are held by the district for the benefit of the student organizations • District has a fiduciary responsibility • Students are the decision makers on how to raise money and how to spend it • Staff advisers only advise, do not decide

11. Fund 60 Pupil Organizations (Examples) • Student Council • Class of 20XX • National Honor Society • Yearbook • Drama Club • Foreign Language Club • Other Clubs

12. NOT Fund 60 • Activities where staff make the decisions are District Activities and accounted for elsewhere • Examples: + Athletics + Musical + Band Uniforms + Field Trips + Shop Class + Sunshine Club / Coffee Fund* * Should NOTappear anywhere on the district’s books. These are not district funds.

13. Fund 60 Accounting Transactions • Assets • 711000: Cash • 712000: Investments • Liabilities • 814000: Due to Student Organizations • Equity • None

14. Fund 60 Parent Organizations • District may establish agency funds for parent organizations • Bank account in the name of the district • Same policies/procedures as for student organizations • Liability Acct 818000: Due to Parent Organizations • Parent organizations may not use the district’s tax ID number • Parent organizations may not be a separate 501(c)(3) and use Fund 60. • Check for a Board Policy on parent organizations.

15. Fund 60 More information: Agency Fund Guidelines document http://dpi.wi.gov/sites/default/files/imce/sfs/stud_acct.doc Audit Program for Pupil Activity Accounts http://dpi.wi.gov/sites/default/files/imce/sfs/pdf/student_activity_funds.pdf

16. Fund 38 and Fund 39 • These funds are used for recording transactions related to repayment of general obligation debt (bonds, state trust fund loans, promissory notes) • Fund 38 - used to account for transactions for debt issues that were incurred withoutreferendum approval • Fund 39 - used to account for transactions for debt issues that were incurred withreferendum approval • Sub-funds 31 through 37 maybe used as necessary • Reported in Fund 38 and 39 as appropriate in the DPI budget & annual reports • More information: • http://dpi.wi.gov/sfs/finances/debt/overview • http://dpi.wi.gov/sfs/finances/wufar/accounting-issues-examples

17. Fund 39- Debt Payments • School Districts must levy sufficient amounts to meet all principal and interest payments as they become due. Additional sums may be levied per Wis Stats 67.11(1)(e) if the district intends to make a prepayment on the debt. • State law does allow a district to increase its tax levy above the amounts to pay current debt, “in order to speed the payment of municipal obligations.” • Transfer of Fund 39 Accumulated Balance is explained: • https://dpi.wi.gov/sites/default/files/imce/sfs/pdf/Fund-39-Balance-Transfer-Policy.pdf

18. Fund 41 Capital Expansion Fund • Projects financed with a tax levy per Wis. Stats. 120.10(10m) • Levy is within the Revenue Limit • Restricted to capital expenditures related to buildings and sites • Not equipment • Not furnishings • Requires approval at Annual Meeting

19. Fund 41 Eligible expenditures defined: For acquiring and remodeling buildings and sites, and Maintenance or repair expenditures that extend or enhance the service life of building, building components, sites and site components

20. Fund 41 Why use Fund 41? • Allows for amortization of expenses over length of time • In year of spending - reduces shared costs in aid formula • Can reduce the impact of negative tertiary aid for districts in that position • Smooth out aid for positively aided districts. Disadvantage • Restricts use of limited revenues to qualifying capital expansion projects • Cannot be redirected to use for general operations or routine maintenance • Creates additional accounting / reporting requirements

21. Fund 41 - Amortizing Expenditures Over Time

22. Fund 41 A Capital Expansion document and PowerPoint can be found on the finance team page in the WUFAR link: http://dpi.wi.gov/sfs/finances/wufar/overview • Under Resources click on: Accounting Issues and Coding Examples • Scroll down to “Funds 41, 46 and 49 - Capital Projects Funds” • Capital Expansion Fund - Fund 41 – word document • Capital Expansion Fund - Fund 41 – PowerPoint is on the Capital Projects Funds webpage

23. Fund 46 Long-term Capital Improvement Trust Fund (Fund 46) A school board may establish a “trust” to fund capital improvement projects per their ten year long-term capital improvement plan. For additional information or document submission contact Roger Kordus: Roger.Kordus@dpi.wi.gov or (608) 267-3752. ------------------------------------------- REQUIREMENTS - Getting Started Board approved 10 year capital improvement plan. Board resolution to establish a trust. Creation of a segregated bank account.

24. Fund 46 REQUIREMENTS and RESTRICTIONS • Funds may only be accessed five years after the establishment of the “trust” fund. • Funds must be physically deposited and held in a segregated bank/investment (separate and distinct from other district accounts) until they are expended for capital improvement projects per the district’s plan. • —Funds invested as per sec. 66.0603, Wis. Stats.

25. Fund 46 REQUIREMENTS and REPORTING The following must be reported to DPI: Official Board minutes approving the long-term capital improvement plan. Signed resolution creating the Long-term Capital Improvement Trust Fund or official minutes documenting the creation of the fund. Documentation that confirms the existence of a segregated bank/investment account. https://dpi.wi.gov/sites/default/files/imce/sfs/doc/Long-Term-Capital-Improvement-Trust-Fund-46%282%29.docx

26. Fund 49 Other Capital Projects Fund • Primarily Funded with Borrowing Proceeds • Bonds, Promissory Notes, State Trust Fund Loans • Capital projects funded through other sources of revenue such as donations and sale of capital objects may be accounted for in Fund 49 • Sub-funds 42, 43, 44, 45, and 47 maybe used as necessary • Reported in Fund 49 in the DPI budget and annual reports

27. Fund 50 • All revenues and expenditures related to the district’s food service activities are recorded in this fund • A fund balance in the Food Service Fund is permitted • A deficit in the food service fund must be eliminated with an operating transfer from the general fund (Fund 10). • More Information: • http://dpi.wi.gov/sfs/finances/wufar/accounting-issues-examples

28. Fund 72 Private Purpose Trust Fund • Account for gifts and donations specified for the benefit of private individuals and organizations not under the control of the school board • Board acts as Trustee of account • Expenditures are made pursuant to donor specifications • Example: Scholarship Fund

29. Fund 73 Employee Benefit Trust Fund Used to account for resources held in trust for formally established defined benefit plans, defined contribution plans, or employee benefit plans Must be legally established in accordance with state statutes, federal law, and IRS requirements Legally irrevocable trust Created as a mechanism for districts to fund post-employment benefit obligations

30. Fund 73 Employee Benefit Trust Fund • Districts not required to use this • May opt to “pay as you go,” however, that does not help reduce the long-term liability • Requires actuarial study to determine funding levels • Remember to sent DPI a copy as well • District makes payments to the trust from the governmental funds (Funds 10, 27, 50, and 80) to fund annual obligations. • Fund 73 pays the retiree benefits

31. Fund 73 Why use Fund 73? To reduce the district’s long-term unfunded obligations. Costs to Special Education Fund are aidable up to the ADC if one of the three criteria are met.

32. Fund 73 • More Employee Benefit Trust Fund information: • Accounting Issues and Coding Examples” Website: http://dpi.wi.gov/sfs/finances/wufar/accounting-issues-examples • Fund 73 - Account Descriptions and OPEB Sample Entries • Fund 73 - Sample of Activity • Employee Benefit Trust Fund Webpage http://dpi.wi.gov/sfs/finances/fund-info/employee-benefit-trust-fund

33. Fund 80 Community Programs and Service Fund website http://dpi.wi.gov/sfs/finances/fund-info/community-service/overview The authority for a school board to operate Community Programs and Services (Fund 80) is established under sec. 120.13(19), Wis. Stats., and PI 80. The levy for Fund 80 was removed from revenue limit control starting in the 2000-01 school year [s. 121.91(2m)(e)1.] As a result, the Fund 80 levy is completely funded by local taxpayers. It has never been a factor in the equalization aid calculation. Chapter PI 80 Community Programs and Serviceswas creates per 2013 Wisconsin Act 306. Effective Date: May 1, 2015. http://dpi.wi.gov/sfs/finances/fund-info/community-service/fund-80

34. Fund 80 In addition, PI 80.02 defines ineligible Fund 80 costs as: • Costs for any program or service that is limited to only school district pupils. • Costs for any program or service whose schedule presents a significant barrier for age-appropriate school district residents to participate in the program or service. • Costs that are not the actual, additional cost to operate community programs and services under s. 120.13 (19), Stats. (No percentages of cost allowed!) • Costs that would be incurred by the school district if the community programs and services were not provided by the school district

35. Does a program or service belongs in Fund 10 (General) or Fund 80? It is the Board of Education and the Administration who decide what meets the criteria to be in Fund 80. Districts are encouraged to use the “Decision Tree for potential Fund 80 Community Programs and Services” https://dpi.wi.gov/sites/default/files/imce/sfs/pdf/Final-Decision-Tree-for-potential-Fund-80-09-2018.pdf before proceeding with a change. Through this evaluation process the Board and Administration will decided if certain activities are associated with: a well-rounded curriculum (curricular and extra-curricular activities) including summer school programs where student minutes will be counted [Fund 10] or if the program has the primary function of serving the community.[Fund 80] It is a local decision. 

36. Fund 80 (PI-80) • 2013 Act 306 requires that Fund 80 expenditures be audited by the school district’s auditor. • NOTE: Current law already directs DPI to exclude from Shared Costs (for General Aid purposes) any CPS expenditures. • If a CPS expenditure audit determines that a district had inappropriately coded CPS expenditures to Fund 10, those expenditures would have to be removed from Fund 10 and would decrease the district’s Shared Costs for General Aid purposes. Wis. Stat. § 121.91(4)(r)

37. Fund 80 (PI-80) • Current law requires DPI to determine if ineligible CPS expenditures exist • If reported in the audit process; DPI must reduce the district’s allowable revenue limit authority the following year by the amount of the ineligible CPS expenditures; structured as a negative exemption rather than a reduction to the district’s base. • This was first applied to the Revenue Limit calculation for the 2015-16 school year, based on 2014-15 expenditures. To date two districts have experienced this consequence.

38. Fund 80 Preparing for an CPS audit; • Each program or service will need to be documented within the district’s accounting system. • Supporting documentation will be part of the audit process. • Wisconsin Uniform Financial Accounting Requirements (WUFAR) will assist each district in this process. • Community Service Fund Information http://dpi.wi.gov/sfs/finances/fund-info/community-service/overview web page provides the most recent information regarding Fund 80. • “Latest News” includes information on how Fund 80 could repaying Fund 10 for operational costs.

39. Fund 90 Package and Cooperative Program Fund • Used to account for expenditures made by a host district for programs and services offered to other districts • Fund 91: Through a CESA • Fund 99: Others

40. Fund 91 Host District • CESA acts as fiscal agent for the districts in the cooperative • Other districts pay CESA their share • Host district pays CESA for its share • Expenditure to F-10 • CESA reimburses host district for all program expenditures • No fund balance allowed

41. Fund 99 Fiscal Agent District • District that acts as the fiscal agent for the districts in the cooperative • Other districts pay host district their share • Host district transfers from F-10 its share of costs • Revenue to F-99 • Expenditure to F-10 • Pays all expenditures for program • No fund balance allowed

42. Fund 99 Examples of Cooperative Services: Hockey Co-op Swim Team Co-op Transportation Services Business Education Program REQUIRES completion of a “66:03 Agreement” Wis. Stats. 66.0301

43. Fund 90 Package & Cooperative Services NOTE: Shared Special Education services are recorded in F-27 not in F-90. More information: Cooperative Service Agreement 66.0301 information can be found on this webpage. http://dpi.wi.gov/sfs/finances/fund-info/package-cooperative-funds

44. THANK YOU! Bruce Anderson, Consultant 608-267-9707 Roselynn Bittorf, Consultant 608-267-9212 Carey Bradley, Asst. Director 608-267-9209 Dan Bush, Consultant 608-266-3862 Terry Casper, Accountant-Advanced 608-267-9218 Roger Kordus, Consultant 608-267-3752 Jillian Raff, Auditor 608-267-7882 Sumana Sengupta, Accountant Senior 608-267-9205 Derek Sliter, Consultant 608-266-3464 Bob Soldner, Director 608-266-6968 Visit our website: http://dpi.wi.gov/sfs