WASBO New School Administrators & Business Support Staff Workshop August, 2007

1. WASBO New School Administrators & Business Support Staff WorkshopAugust, 2007 ACCOUNTINGTRANSACTIONS Wisconsin Department of Public Instruction

2. WUFAR 101 Wisconsin Uniform Financial Accounting Requirements • It is a multi-dimensional reporting system that can also be used as an accounting system • Not required accounting, but required reporting • Always used in conjunction with the Budget and Annual Reports • Download off website http://dpi.wi.gov/sfs/wufar.html

3. WUFAR Account Format Fund Location Object/ Function Program/ Source Project ---------------------------------------------------------------- XX XXX XXX XXXXXX XXX Most of the commercial software used in districts will display account codes in this order. In DPI reporting you will see the function number preceding the object or source. DPI reporting does not require location detail.

4. Wisconsin Uniform Financial Accounting Requirements - cont. Code numbers are arranged in hierarchical order. A zero (0) in any position of a code represents a total of more detailed account codes. The following is an example of a hierarchy in the source dimension: Fund Function Description 10R 000000 210 Taxes 10R 000000 240 Payment for Services 10R 000000 260 Non-Capital Sales 10R 000000 270 School Activity Income 10R 000000 280 Earnings on Invest 10R 000000 290 Other Local Sources 10R 000000 200 Total Local Revenue

5. Wisconsin Uniform Financial Accounting Requirements – cont Code numbers are arranged in hierarchical order. A zero (0) in any position of a code represents a total of more detailed account codes. The following is an example of a hierarchy in the expenditure dimension: Fund Function Description 10E 120000 100 Salaries 10E 120000 200 Employee Benefits 10E 120000 300 Purchased Services 10E 120000 400 Non-Capital Objects 10E 120000 500 Capital Objects 10E 120000 900 Other Objects 10E 120000 000 Total Regular Curriculum

6. FUND: A fiscal and accounting entity with a self-balancing set of accounts…which are segregated for the purpose of carrying on specific activities in accordance with special regulations, restrictions, or limitations

7. FUND • STAND ALONE ACCOUNTING ENTITY • BALANCE SHEET, REVENUES AND EXPENDITURES FOR EACH FUND • WITHIN FUND, “DEBITS” MUST EQUAL “CREDITS” (the fund must be self-balancing) • CHANGE IN FUND BALANCE EQUALS DIFFERENCE BETWEEN FUND REVENUES AND EXPENDITURES

8. FUND • ENDING FUND BALANCE MINUS BEGINNING FUND BALANCE =REVENUES MINUS EXPENDITURES • MORE REVENUES THAN EXPENDITURES MEANS MORE FUND BALANCE AT END OF YEAR

9. GENERAL FUND FUND 10 FINANCIAL TRANSACTIONS RELATING TO CURRENT OPERATIONS NOT REQUIRED TO BE ACCOUNTED FOR IN OTHER FUNDS

10. SPECIAL PROJECTS FUNDS FUND 21 GIFTS AND DONATIONS RECEIVED FROM PRIVATE PARTIES THAT CAN BE USED FOR DISTRICT OPERATIONS FUND 23 ANY REMAINING TEACH FUND BALANCE BEING USED TO MAKE PAYMENTS ON A TEACH LOAN FUND 27 SPECIAL EDUCATION AND RELATED SERVICES FUNDED WHOLLY OR IN PART WITH STATE OR FEDERAL SPECIAL EDUCATION AID FUND 29 SPECIAL REVENUE K-12 INSTRUCTIONAL PROGRAMS NOT REQUIRED TO BE REPORTED IN OTHER SPECIAL REVENUE FUNDS

11. DEBT SERVICE FUNDS FUND 38 Repayment of debt issues that were either; not authorized by school board resolution before August 12, 1993, or incurred without referendum approval after that date. FUND 39 Repayment of debt issues that were either; authorized by school board resolution before August 12, 1993, or approved by referendum.

12. CAPITAL PROJECTS FUNDS FUNDS 41, 48 AND 49 RECORDING EXPENDITURES FINANCED THROUGH BONDS, PROMISSORY NOTES, STATE TRUST FUND LOANS, LAND CONTRACTS OR TAX LEVY (EXPANSION FUND OR TIF)

13. FOOD SERVICE FUNDS FUND 50 ACCOUNT FOR THE DISTRICT’S FOOD SERVICE ACTIVITIES ACTIVITIES RELATING TO PUPIL AND ELDERLY FOOD SERVICE ACTIVITIES

14. AGENCY FUND FUND 60 ACCOUNT FOR ASSETS HELD BY THE DISTRICT FOR PUPIL ORGANIZATIONS. ONLY BALANCE SHEET ACCOUNTS FOR THIS FUND ARE REPORTED IN THE BUDGET AND ANNUAL REPORTS.

15. TRUST FUNDS ASSETS HELD BY THE DISTRICT IN A TRUSTEE CAPACITY FOR INDIVIDUALS, PRIVATE ORGANIZATIONS, OTHER GOVERNMENTS AND/OR OTHER FUNDS FUND 72 ACCOUNTS FOR GIFTS AND DONATIONS SPECIFIED FOR THE BENEFIT OF PRIVATE INDIVIDUALS AND ORGANIZATIONS NOT UNDER THE CONTROL OF THE SCHOOL BOARD FUND 73 ACCOUNTS FOR RESOURCES HELD IN TRUST FOR FORMALLY ESTABLISHED DEFINED BENEFIT PENSION PLANS, DEFINED CONTRIBUTION PLANS OR EMPLOYEE BENEFIT PLANS FUND 76 ACCOUNTS FOR NON-DISTRICT PORTION OF INVESTMENT POOL SPONSORED BY THE DISTRICT

16. COMMUNITY SERVICE FUNDS FUND 80 ACTIVITIES WHERE THE PRIMARY FUNCTION IS TO SERVE THE COMMUNITY AND ARE OUTSIDE THE REGULAR AND EXTRACURRICULAR PROGRAMS FOR STUDENTS

17. PACKAGE AND COOPERATIVE PROGRAM FUNDS MULTIDISTRICT PROJECTS FOR WHICH IT IS NECESSARY TO KEEP A SEPARATE RECORD OF ACTIVITY SO THAT PARTICIPANT DISTRICTS’ SHARE CAN BE DETERMINED FUND 91 EXPENDITURES MADE BY A HOST DISTRICT FOR PROGRAMS MADE AVAILABLE TO OTHER DISTRICTS THROUGH A CESA FUND 93 CONSORTIA PROGRAMS FUNDED WITH LOANS FROM THE TEACH WISCONSIN BOARD FUND 99 ALL OTHER TYPES OF COOPERATIVE INSTRUCTIONAL FUNDS- NEVER REPORT SPECIAL EDUCATION

18. SOURCE & OBJECT TheSourcedimension is used to classify revenues and other fund sources by their origins. The Object dimension is used to identify the service or commodity used in accomplishing a function.

19. REVENUE SOURCES REVENUE CODING:2 QUESTIONS • “WHO’S PAYING THE MONEY?” • “WHAT IS IT FOR?”

20. REVENUE CODING SOURCE CODES • 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)

21. EXPENDITURE OBJECTS NORMAL RULE: EXPENDITURES ARE CHARGED TO THE FISCAL PERIOD WHEN THE SERVICES ARE PROVIDED, SUPPLIES ARE USED OR EQUIPMENT IS ACQUIRED.

22. OBJECT CODING MOST-USED OBJECT CODES • Salaries (100 Objects) • Fringe Benefits (200 Objects) • Purchased Services (300 Objects) • Non-Capital Objects (400 Objects) • Capital Objects (500 Objects) • Debt Retirement (600 Objects)

23. FUNCTION CLASSIFICATION FUNCTION DESCRIBES THE PURPOSE FOR WHICH A SERVICE OR MATERIAL OBJECT IS ACQUIRED. Reporting to DPI is at the 2 or 3-digit function level, but local districts can use more detail for tracking expenditures.

24. FUNCTIONAL CODING THE QUESTION TO ANSWER: Which defined purpose caused the revenue or expense to be incurred???

25. Defined Purposes: (AKA: FUNCTIONS) • Instructional (100000) limited to activities between students and teaching staff • Support Services (200000) administrative, technical & logistical support to both instructional and non-instructional programs • Community Services (300000) • Non-Program Trans. (400000)purchasedinstructional services,, interfund transfers, open enrollment tuition are included here • District-Wide (500000)used only withrevenue sources

26. ORGANIZATION OVERVIEW General Ledger Fund 10 Budget/ Annual Report to DPI Addendas Fund 20 Debt Service Amort. Schedules Fund 30 Fund 40 Special Ed. Claim Fund 27 Fund 50 08 Debt table. Other Funds

27. RESOURCES • WUFAR link located at: http://www.dpi.state.wi.us/sfs/wufar.html

28. PROPERTY TAX LEVIES

29. PROPERTY TAX LEVIES • LEVIES INTO FUND 10, 38, 39, 41, 80 • THE TOTAL LEVY IS REVENUE • SOURCE 211 – CURRENT LEVY • SOURCE 212 – CHARGEBACK LEVY (FUND 10 ONLY) • TAXES RECEIVABLE AT JUNE 30

30. DEBT SERVICE TAX LEVY • Levy for the calendar year - budget for the fiscal year ending June 30 • Example: • LT Debt Payments Due (principal & interest) • October, 2007 $101,000 • March, 2008 $502,000 • October, 2008 $ 98,000 • Levy in November, 2007 • ($502,000 + $98,000) • Budget for 2007-08 • ($101,000 + $502,000)

31. PROPERTY TAX REFUNDS • USUALLY PAYMENT TO MUNICIPALITY FOR UNCOLLECTED PERSONAL PROPERTY TAXES • FUND 10 FUNCTION 490 000 OBJECT 972 (10 E 490 000 972) • COLLECTION OF REFUND • FUND 10 SOURCE 972 (10 R 000 000 972) • SOURCE 212 LEVY – NET PAYMENTS* • OPTIONAL • NOT NEGATIVE *object 972 minus source 972

32. PROPERTY TAX REFUNDS (cont’d) • ONLY LEVY FOR UNCOLLECTED TAXES PAID OR HAVE BEEN BILLED BY THE MUNICIPALITY AND YOU INTEND TO PAY THEM • OVER LEVY RESULTS IN TAXING WITHOUT PROPER AUTHORIZATION

33. 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

35. STATE AND FEDERAL AID

36. 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

37. ACCOUNTING FOR DELAYED EQUALIZATION AID PAYMENT

38. ACCOUNTING FOR DELAYED EQUALIZATION AID PAYMENT Cash $1,496,409 10E 435000 382 149,882 10R 621 $1,504,684 10R 345 141,607 Receivable 715500 $ 72,291 10R 621 $ 72,291

39. Grant Receivables 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.

40. 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.

41. 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 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!)

42. Grant Receivables 05-06 06-07 07-08 July 1, 2006July 1, 2007 ✔Submit 05-06 grant claims. ✔Book 05-06 revenue in appropriate Source and end-of-year 05-06 receivable in 715000-002. Receive 05-06 cash early in 06-07 fiscal year (shows up on 06-07 aids register) ✔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) Revenue should equal the Aids Register amount minus the beginning-of-the-year receivables (05-06 revenue) plus the end-of-year receivables (06-07 revenue). Aids register is available at: http://www.dpi.state.wi.us/sfs/online_ar.html

43. DEBT

44. CASH FLOW BORROWING • GENERAL FUND TRANSACTION • BALANCE SHEET TRANSACTION FOR PRINCIPAL • INTEREST EXPENSE – ACCRUAL AT JUNE 30 • INTEREST REVENUE • IN FUND PRODUCING INCOME • INTEREST RECEIVABLE AT JUNE 30

45. CASH FLOW BORROWING (cont’d) • Accounting transactions: • Dr. Cash $1,000,000 • Cr. Temporary Notes Payable $1,000,000 • (Acct. 10B 811 100) • Dr. Interest Expense $ 40,000 • (10E 682 281 000) • Cr. Interest Payable $ 40,000 • (10B 811 700)

46. CAPITAL LEASE • “BORROWING” FROM A VENDOR TO ACQUIRE ITEM • JOURNAL ENTRY TO RECORD FINANCING TRANSACTION • PRINCIPAL AND INTEREST PAYMENT TRANSACTIONS AS PAYMENTS ARE MADE (object 678/688, function 281000)

47. Long-Term Debt • If used for acquiring capital assets, receipted into Capital Projects Fund & expended out of there • Capital items include buildings, equipment, books • General Fund? – highly unlikely but can be used if for operational purposes—must notify DPI

48. BOND ANTICIPATION NOTES • OFTEN TAKEN OUT PRIOR TO RECEIVING PROCEEDS OF “PERMANENT” DEBT ISSUANCE • WHEN RECEIVED CREDIT “LOANS” SOURCE 873 – CAPITAL PROJECTS FUND • INTEREST PAYMENTS ON BANS – DEBT SERVICE FUND – TRANSFER IN OR LEVY

49. DEBT REFINANCING • INCUR NEW DEBT AND USE PROCEEDS TO “PAY OFF” EXISTING DEBT • “PAY OFF” MAY INCLUDE PAYMENT OF NEW DEBT PROCEEDS TO ESCROW AGENT • TAKES PLACE IN DEBT SERVICE FUND • CONTACT DPI FOR ASSISTANCE WITH RECORDING

50. WHAT HAPPENS IF DEBT SERVICE EXPENDITURES ARE CODED INCORRECTLY? • SHARED COST MAY BE CALCULATED INCORRECTLY, RESULTING IN WRONG AID BEING PAID TO DISTRICT • DISTRICT’S ANNUAL REPORT DEBT TABLE WILL NOT RECONCILE FROM BEGINNING TO END OF YEAR