DOCUMENT RESUME

ED 252 983 EA 017 515

AUTHOR Lundin, Janet, Ed.TITLE California School Accounting Manual. 1984 Edition.INSTITUTION California State Dept. of Education, Sacramento.PUB DATE 84NOTE 179p.AVAILABLE FROM Publication Sales, California State Department of

Education, P.O. Box 271, Sacramento, CA 95802-0271($4.50 prepaid; California residents add salestax).

PUB TYPE Guides - Non-Classroom Use (050 ----

Legal /Legislative /Regulatory Materials (090)

EDRS PRICE MF01 Plus Postage. PC Not Available from EMS.DESCRIPTORS Definitions; Elementary Secondary Education; Program

Budgeting; Records (Forms); *School Accounting;*State Standards

IDENTIFIERS *California ,

ABSTRACT'California's official school accounting procedures,

amended in 1984 to clarify definitions and improve program costaccounting, are presented. Following an introduction that discussesgeneral characteristics of school accounting, the manual explains thefolloing areas of accounting practice: (1) financial reporting; (2)income; (3) expenditures; (4) supplies and capital outlay, including_equipment, sites and improvement of sites, building fixtures, andservice systems; (5) stores system procedures,_ controls, andaccounting; (6) genera], and subsidiary ledger accounting; (7)accounting terminolggy; and (8) data processing terminology. Theexplanatory text is supplemented, where appropriate, with sampleforms, reference charts, and lists of accounts. (MCG)

*********************************t************************************** Reproductions supplied by EDRS are the best that can be made *

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U.O. DEPARTMENT Of EDUCATIONNATIONAL INSTITUTE Of EDUCATION

EDUCATIONAL. RESOURCES INFORMATIONXCENTER IERICI

The document hes been reproduced esreceived from the person or oreanostionorsoiresenp it

Minor changes have been made to improvereproduction quality

Poems of view or opinions stated in this documem do not nettles/sr* represent official NtEmeow or poky

"PERMISSION TO REPRODUCE THISMATERIAL IN IIIICROFICHE ONLYHAS BEEN GRANTED BY

7".

TO THE EDUCATIONAL RESOURCESINFORMATION CENTER (ERIC)."

CALIFORNIA SCHOOLACCOUNTING MANUAL

CALIFORNIA STATE DEPARTMENT OF EDUCATIONBIII Honig, Superintendent of Public Instruction.Sacramento

2

ea

CALIFORNIA SCHOOLACCOUNTING MANUAL1984 Edition

Officially approved by the

California State Board of Educationin accordance with Education Code Section 41010for required use by California Public schools

Pr"Wf under the direction of theLocal immBureauwith the cooperation of theCalifornia Association of School Business Officials

I

Pub *ding Informatio

The California School Accounting Man 1918I Eaton, whichwas approval by the California Stale Board of Education. wasprepared under the direction of the Local Assistance Bureau incloperation with the California Association of School BusinessOfficials. The members of the State Board of Education at thetime the manual was approved sere Sandra J. Boole, President;David T. Romero, Vice-President; Henry Alder; Joie Gray Bain;Agnes Chan; Daniel M. Chensow; GI Orli San Han; AngiePapadakis; Kenneth L Peters; 'John L. Wank and Melissa Lane(student member).

The manual was edited by Janet Landis and proposed forphoto - offset production by the staff of the Bureau ofPublications, California State Department of Education, workingin cooperation with Carl E. Burson. Jr.. Supervisiag FieldRepresentative from the Local Assistance Bureau for SchoolApportionments, Grants, and Fiscal Assistance. The artwork wasdone by Cheryl Showier McDonald, and the typesetting was doneby Lea Shimabukure and Anna Boyd.

This manual was published by the Department of Education, 721Capitol Mall, Sacramento, CA 956144785; printed by the Officeof State Printing; and distributed under the provisioas of theLibrary Distribution Act and Government Code Section 11096.

California State Department of Education. 1%4

Copies of this publication are available for $4.50 each, plus salestax for California residents, from Publications Saks. CaliforniaState Department of Education, P.O. Boa 271, Sacramento,CA 95802-0271.

A list of other publications availabk from the Department maybe found on page xii of this document.

4

.1\,,1

CONTENTS

Pg

Foreword viPreface vii

INTRODUCTION ix

Special Features of School Accounting ixFixed Assets RecordsLong-term LiabilitiesRevenueExpendituresAppropriationsEncumbrances xiFund Balance xi

Funds xiClassification of Funds xi

Budget xiBooks of Original Entry xi

PART I - FINANCIAL REPORTING I-1

Annual Financial and Budget Report 1-1

Supplemental Annual Financial Report I-1Exhibit I-A: Annual Financial and Budget Report, Income bylource 1-2Exhibit I-B: Annual Financial and Budget Report, Expenditures

by Object 1-4Exhibit 1-C: Annual Financial and Budget .Report, Expenditures

by PA-4-10 In 1-8Exhibit 1-D: Program Classification Definitions 1-10Exhibit 1-0-1: Normal Object Classification of Expenditures by Major

Program Functions 1-15Exhibit 1-E: Supplemental Annual Financial Report, 1983-84

Part 1General Fund (Form No. J-41-A) 1-19Exhibit 1 -F: Sample PrOgraill Budget 1-23

PART II - INCOME 11-1

Classification of Income II-1Instructions for Using Income Classifications 11-1

Miscellaneous Funds 11-8.Royalties and Bonuses 11-8

Payments in Lieu of Taxes 11-8

Abatement of Income 11-8

Accounting Procedure 11-81 ncome 11-9

Accounting for Certain Apportionments (Loans) I;

PART III EXPENDITURES

General InstructionsSection A Objects of Expenditure Classifications, Their Content,

and Instructions Regarding Their UseSection B Direct Costs, Direct Support Costs, and Indirect Cost Distribution

111-I

III-2

111-3111-12

Direct Costs 111-12

Direct Cost Prorations III-12Holding Programs 111-12Two or More Programs 111-13

Direct Support III-13Description of Methods III-14Application of Methods III-16

Special Projects III-16Use of Categorical Funds III-17Instructional Support III-17.Pupil Services III-17General Support 111-18Auxiliary Programs _.., III-19

Indirect Support III-19Support Costs Accounting 111-19

Indirect Costs Distribution 111-20Within-Fund and Between-Fund Support 111-20

Section C Miscellaneous Accounting Procedures III-21Cooperative Projects III-21Special Education Master Plan 111-22Accounting by Funds 111-23

Bond Interest and Redemption Fund 111-23

Building Fund 111-23

Special Reserve Fund III-23State School Building Fund 111-23

Cafeteria Fund 111-23

Child Development Fund 111-23

Adult Education Fund 111-24Deferred Maintenance FundSelf-Insurance Funds

III-24111-24

Other Special Funds 111-25Accounting for Stores 111-25

Abatements of Expenditures III-25Accounting Instructions for Abatements 111-25

Use of Contra Accounts 111-26Relationship of Abatements of Expenditure to Appropriation Control 111-26Principal Types of Abatements of Expenditure III-26

Exhibit Ill -A: Analysis of Salaries III-28Exhibit 111-B: Factor Sheet Information 111-29

Exhibit 111-C: Distribution Sheets 111-36

PART IV SUPPLIES AND CAPITAL OUTLAY, INCLUDING EQUIPMENT,SITES AND IMPROVEMENT OF SITES, BUILDING FIXTURES, ANDSERVICE SYSTEMS IV- I

Criteria for Distinguishing Between Supplies and Equipment IV-1Criteria for Identification of Capital Outlay IV-2

Equipment IV-2New Sites and Improvement of Sites IV-2Buildings IV-2

Ir

Improvement of Buildings IV-2Building Fixtures IV-2Service Systems IV-2Criteria for Identification of Building Fixtures and Service Systems IV-3Purchase, Rental, Lease, or Lease with Option to Purchase IV-3

List of Supplies, Equipment, Improvement of Sites, Building Fixtures,and Service Systems IV-3

PART V STORES SYSTEM PROCEDURES, CONTROLS,AND ACCOUNTING V-1

Optional Methods of Financing, Accounting, and Controlling V-1Stores Account Method V-1Revolving Fund Method V-1

Types of Supplies in a Stores System V-1Essentials of a Stores System V-2

Devices for Control of Purchases V-2Records of Perpetual Inventory V-2Verification by Physical Inventory V-2Security Control and System of Intirnal Checks V-2Planned Procedures for Receiving and Issuing V-2Lines of Authority and Responsibility of Personnel V-3

Accounting for a Stores System V-3Stores Account Method V-3Revolving Fund Method V-4

Typical Costs of Receiving, Warehousing, and Distributionin Connection with a Central Stores System V-4

PART VI GENERAL AND SUBSIDIARY LEDGER ACCOUNTING VI-1

Definition of General Ledger Accounting VI-1General and Subsidiary Ledgers VI-1General Ledger Accounts V1-3General Ledger Procedures VI-7

Opening the General Ledger VI-7Recording the Approved BudgetIncome VI-9Recording the Approved BudgetExpenditures VI -1IRecording the Approved BudgetReserves VI-15Recording Encumbrances VI-17Recording Income and Other Cash Receipts VI-22Recording Expenditures and Other DisbursementsSalaries VI-25Recording Expenditures and Other DisbuniementsOther VI-27Recording Encumbrance AdjustmentsSalaries VI-29Recording Encumbrance AdjustmentsOther than Salaries VI-30Recording Other Adjustments VI-31Closing the General Ledger VI-33

Prepaid Expenses VI-36Accounting for Stores VI-37General Ledger Accounting for Building Funds VI-39

PART VII ACC014111NG TERMINOLOGY VII-1

PART VIII DATA PROCESSING TERMINOLOGY VIII-1

FOREWORD

With the cooperation and help of the California Association of School Business Officials,the California State Department of Education has prepared the .1984 edition of the Cali-fornia School AFcounting Manual for use in California public schools. The California StateBoard of Education, acting under the provisions of Education Code Section 41010, hasapproved this new edition as the official manual for California public school accounting.

The accounting procedures outlined in this official manual have been field tested by thoseresponsible for California public school accounting. We know that the officials responsiblefor the accounting practices employed by California ptiblic schools are qualified to do theirwork well. We are therefore certain that the work of these officials, as evidenced in theCalifornia School Accounting Manual, will meet with the approval of all of you who haveresponsibility for the operation of California's public schools.

vi8

Superinterukni of Public Inuruction

PREFACE

California school districts are required by law to prepare financial reports and annualbudgets that show all purposes for which the districts will need financial support. Thesereports and budgets are prepared on forms prescribed by the Superintendent of PublicInstruction. The county superintendents of schools are required to make annual financialreports to the Superintendent of Public Instruction which show for each school district intheir respective counties the amounts expended for each classification of expendituredesignated by the Superintendent of Public Instruction.

The California Association of School Business Officials has for a number of years beencooperating with the State Department of Education in the preparation of the accountingmanuals that have been published by the Department of Education for use by the schooldistricts and offices of the county superintendents of schools. The first of these, Handbookof Instructions for the Clqxsification of School Expenditures, was published in 1939. In thismanual the expenditure classification and the instructions conformed with those beingemployed by the United States Office of Education. This handbook contained instructionsfor the classification of expenditures, distinguished between supplies and equipment, anddefined accounting terms. A second handbook, The Accounting of Abatements of SchoolRevenue and Expenditure, was published in 1941.

In 1944 the first handbook was revised to contain the expenditure classification andprocedures then recommended by the United States Office of Education. This edition of themanual, known as the California School Accounting Manual, Parts I-IV, was then revised in1951 to secure additional segregation of expenditure classes and to provide clarification ofthe instructions. A supplemental guide, Supplement to California School AccountingManual, published in 1954, was devoted to general ledger and stores system accounting andto classification of income.

In 1957 the U.S. Office of Education published Financial Accounting for Local and StateSchool Systems: Standard Receipt and Expenditure Accounts, which was intended as aguide for nationwide standardization of accounting practices: Although certain Californialaws, practices, and procedures made it impractical, if not impossible, to adopt all theprocedures recommended in that federal publication, in 1961 the California SchoolAccounting Manual was revised to comply with as many of the federal recommendations aspossible. The 1961 revision of the manual contained four parts: "Income"; "Expenditures";"Equipment, Supplies, Improvement of Sites, Building Fixtures, and Service Systems"; and"Stores System Procedures, Controls, and Accounting."

The 1964 edition of the California School Accounting Manual contained three new partsdeveloped by accounting committees of the California Association of Public School BusinessOfficials: "General Ledger Accounting," "Program Cost Accounting," and "AccountingTerminology."

In 1966 the California School Accounting Manual, Part 1, "Income," was revised toprovide income accounts for the many new federal programs.

The 1968 and 1971 editions served to update the 1966 edition.A revised school accounting system was presented in the 1973 edition of the California

School Accounting Manual. Procedures and codes Were established far the accounting ofincome and expenditures by object, rather than by function. The new manual provided

maximum flexibility, as the object accounts could be combined in any number of ways toilluminate program expenditures.

The 1976 edition of the California School Accounting Manual provided methods toaccount for income and expenditures in instructional and support programs. Account codesand required accounting and reporting procedures were introduced in parts I, IL Ill, and IV:and procedures for stores systems and general ledger accounting were presented in parts Vand VI.

In 1977 an amended manual was developed that included the definitions and improvedmethods of distributing direct costs and direct support costs to programs. That manual con-tained a clarification of the "Supplemental Annual Financial Report" (.1-41A) and a defini-tion of the need to distribute the costs to all programs. Several reporting documents pre-viously required were replaced.

This edition of the California School Accounting Manual incorporates the 1984 amend-ments that were developed by members of the California Association of School BusinessOfficials in cooperation with staff from the California State Department of Education. TheCalifornia State Board of Education approved the amendments in accordance with Educa-tion Code Section 41010. These amendments clarify definitions and improve the objectaccounts for income and expenditures. The proper classification and accounting of expendi-tures on the basis of direct services to pupils are reflected in the new manual, which hasbeen amended to comply with current statutes.

(ill BERT R. MAROUTH JACK KENNEDYPepurs. Superintendent Administratorfor Administration !vial Assistance Bureau

ROBERT W. AGEEChidDivision of Fri.ccil Services

N

1V

CARL E. BURSON. JR.Supervising Field Representative

Local Assistance Bureau

INTRODUCTION-W.

Today we are in the midst of a great upsurge ofpublic interest in school programs, budgetN andfinance. Schools are performing new services thatpreviously were not part of public education. inthis environment educators need tools to interpreteducational programs to their communities and tolegislators. Some of the needed tools are preciseaccounting terms that are easily understood. Thesetools enable educators to highlight the manyprograms in a school system and to relate theseprograms to their costs.

Definitive costs such as teachers' salaries are easyto understand; however, they give only part of the

41) financial picture. The other part is the activity orprogram, comprised of object expenditures such astextbooks and supplies. These objects are pur-chased and are charged to the program they serve.This procedure is known as accounting by pro-gram, program accounting, or program costaccounting.

Parallel to program accounting as a concept isprogram budgeting, defined as a grouping of pro-posed expenditures and anticipated income accord-ing to the series of activities or program they areintended to support. When objects of expenditureare so grouped, they form a program expenditurebudget. After expenditures have been made, theymay be analyzed according to the same objectclassifications used in the program budget to give acomplete picture of the program as budgeted andas actually carried out.

A program budget lists and amunarizes what isneeded to accomplish ram aims. The numberof teachers is determined, and their salaries areestimated. Textbooks, supplies, equipment, andother requirements are listed along with their costestimates. The total requirements constitute the

upprogram expenditure budget. This process pro-duces a list of objects of expenditure that is

is

meaningful to educators, members of governingboards, legislators, and the community. Thus, withvarying degrees of refinement, the program budget-ing process is essentially one of listing the objectsneeded to accomplish the program's aims. Thisprocess is presently used by school districts receiv-ing categorical aid.

This accounting manual presents a format forcollecting and presenting data that can be used in avariety of ways to serve the educational purposesof school districts and the state. The manualprovides- maximum flexibility to districts becauseits object accounts can be combined in any numberof ways to illuminate many different kinds ofprograms. The district defines its programs and thedistrict decides exactly how object items are to becombined. Therefore, the accounting manual pro-vides the flexibility to budget, account for, andreport the costs of whatever programs are op' atedin California school districts.

Special Features of School Accounting

Fundaniental principles of accomiting theoryapply to governmental accounting, including publicschool accounting, as well as to commercialaccounting. The basic principles are as follows:

Uniform nomenclature, adequate to satisfy tech -nical requirements yet understandable to thelayman, should be used.

Data should be organized in a manner conduciveto prompt and accurate preparation of reportsand financial statements.

A double entry set of accounts should bemaintained on a modified sash basis.

The accounting system should be organized in amanner that will facilitate an efficient prepa-ration of the periodic audit.

The records should help guarantee that expendi-tures will be made according to legislative,administrative, and governing board intent.

Data should be organized to facilitate thepreparation of future budgets.

The special features of school accounting are

presented and discussed in this section.

Fixed Axles Rem&

Although the fixed assets of a school districthave little bearing on a district's solvency, recordsof fixed assets (e.g., investments in land, groundimprovements, buildings, and equipment) shall bemaintained in accordance with Education Code

Section 35168. The records provide bask informa-tion for administrative control and insurancevaluation.

Fixed asset accounts should be charged withcapital outlay expenditures from all funds eithercunently or by a summary entry at the end of eachfiscal year. At the same time, a reserve accountentitled "Investment in Fixed Assets" should becredited with a like amount. Fixed asset retire-ments and adjustments are treated in a similarmanner by approptiate charges or credits to theseaccounts.

Depreciation records on fixed assets generallyare not maintained in tax-supported agenciesexcept in the public utility type of agency.Memorandum depreciation records may be main-tained if desired to reflect future liability for fixedasset replacement.

Loutterm Liabiles

The long-term financing of a government unit isdifferent from private enterprise in that the bondsissued by a business concern are usually secured bythe fixed assets of the issuing concern. Govern-mental bonds are dependent for secitt'ty upon theability of the school district to raise moneythrough taxation.

Bonded debt accounts are maintained by thecounty auditor, and data are usually furnished theschool district annually regarding the budgetrequirenients for the Bond If *rest and Redemp-tion Fund./ However, school districts should keepmemorandum records of the bonded debt in orderto have at hand complete data regarding suchindebtedness, present and future tax requirements

for bond redemption and interest, and potentialadditional bonding capacity of the district.

Revenue

The National Committee on Municipal Account-ing defines revenue as "additions to assets whichdo not increase any liability, nor represent therecovery of an expenditure; nor represent thecancellation of liabilities %or:About a cortespondingincrease in other liabties or.a decrease 111 asPets."

Furthermore, it notes that "revenue refer to anincrease in the net resources or surplus of A fund."The committee also points out that not allincreases in the net resources of a particular fund"result in an increase in the net resources of themunicipality as a whole, since the roomed ofanother fund may decrease conespondingly."

Fund revenues are ordinarily classified as tosource, such as federal subvention, state apportion-ments, or district taxes.

Expenditures

Expenditures represent charges against appropri-ations. If the accounts are kept on the accrurtlbasis, the term expenditures includes total char'incurred, whether paid or unpaid. When theaccounts are kept on a cash basis, the term coversonly the actual cash disbursements.

Appropriations

An appropriation is an allocation of funds,income, or estimated income made by the govern-ing board of the school district for specificpurposes, usually limited as to the time when itmay be expended.

Appropriations made by the governing boardauthorize the school district to spend certain sumsof money for definite activities. An appropriationspecifies in some detail the exact purposes forwhich expenditures may be made, the amount tobe spent, and the period of time during which theexpenditures are to be made/

Even though expenditures are carefully planned,changes in appropriations are sometimes necessary.Certain contingencies may arise that require addi-tional appropriations. A contingent reserve (Appro-priation for Contingencies) is provided from whichthe governing board may authorize transfers to

12

activities for which insufficient funds were pro-vided in the original appropriation.

Encumbrances

In order 'to keep commitments within thefinancial plan, obligations in the form of purchaseorders or contracts that are to be met from anappropriation are recorded as a restriction of theappropriation balance. By this means the adminis-tration has a control to prevent theoverexpendi-lure of an appropriation.

When encumbrances are not formally enteredagainst the appropriation account, it is possible toapprove commitments that may exceed theamount allocated to the appropriation. The ebliga-tions cease to be encumbrances when paid.

Fund Balance

The term fund balance, with suitable qualifico-tion, is. employed to denote the excess of assetsover liabilities or, at other times, excess of re-source: n+ r r the sum of obligations, reserves, andunencus: '.:,red appropriations.

Funds

The National Committee on Municipal Account-ing defines the term fund as a "sum of money orother resources (gross or net) set aside for thepurpose of carrying on specific-activities or attain-ing certain objectives in accordance with specialregulations, restrictions, or limitations and consti-tuting an independent fiscal and accountingentity." Thus, the accounting structure of a fundmay include all the usual general ledger accounts;e.g., assets, liabilities, fund balance, income, expen-ditures, appropriations, and encumbrances. Therecords may or may not be physically separatedfrom other funds, but the fund will be a completeand separate entity yielding distinct financialreports. In a number of cases, specific expendituresmay be legally made from two or more differentfunds. In a few instances, the law authorizestransfers from one fund to another by resolutionof the governing board.

Classification of Funds

The number of kinds of funds authorized by lawmay vary from time to time. In addition to the

xi

1

General Fund, some of the typical funds used byschool districts are the Building Fund, State SchoolBuilding Fund, Deferred Maintenance Fund, andCafeteria Fund. However, taking into account therestrictions involved in each fund, the greater thenumber of funds, the more rigid the financialadministration becomes. Therefore, in the absenceof legal requirements, the or nirational unit shouldestablish as few funds as possible.

Budget

The budget is a proposed plan of expendituresand the means of financing these expenditures,taking into account the necessary legal require-ments. The annual financial and budget reports arefiscal documents exhibiting actual income andexpenditures of prior fiscal years, the proposedappropriations for expenditures, and the proposedsources of income to meet these appropriations forthe succeeding fiscal year in every fund of theschool district.

Books of Original Entry

Transactions of several kinds are recorded indocuments such as apportionment notices, cashreceipts, deposit records, requisitions, purchaseorders, warrants, and warrant registers. Thesedocuments should be employed for direct orsummarized posting to ledger accounts. Theyshould indicate the accounts affected by accountname or number.

Documents pat represent transactions of anyone kind and that are numerous and regularlyrecurring are usually recorded consecutively andchronologically in specialized registers. These regis-ters are employed for the accumulation of totals ofa number of similar transactions to reduce thenumber of postings to general ledger accounts.

Every accounting system needs a journal orsystem of journal vouchers, other than special Iregisters, for the first formal recording of thoseinfrequent entries for which no other provision ismade; e.g., opening, adjusting, and closing entries,anC for posting to ledgers. Standard commercialforms are suitable in many cases.

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PUblications Available from the Department of Education

This publication is one of approximately 500 that are available from the California State Depart-ment of Education. Some of the more recent publications or those most widely used are the following:

Accounting Procedures for Student Organizations (1979) S1.50

Administration of the School District Budget (1983) 3.00

American Indian Education Handbook (1982) 3.50

Apprenticeship and the Blue Collar System: Putting Women on the Right Track (1982) 10.00

Arts for the Gifted and Talented. Grades 1--6 (1981) 2.75

Arts for the Handicapped Trainer's Manual (1982) 6.50

Attendance and Enrollment Accounting in California Public Schools (1977) 2.80

Bilingual-Crosscultural Teacher Aides: A Resounx Guide (1984)California Private School Directory .011

California Public School Directory 12.50California School Business Procedures and Management In-servict. Training (1980) 1.50

Computer Literacy of-California's Sixth and Twelfth Grade Students (1984) 1.50

Curriculum Design for Parenthood Education (1982) 150Guide for Vision Screening in California Public Schools (1984) 2.50

Handbook for Planning an Effective Mathematics Program (1982) 2.00

Handbook for Planning an Effective Reading Program (1983) 1.50

Handbook for Pleasing an Effective Writing Program (1983) 2.50

Handbook for Taal i% Portuguese-Speaking Students (1983) 4.50

History-Social Science Framework for California Public Schools (1981) 2.25

Improving the Attractiveness of K-12 Teaching Profession in California (1983) 3.25

Improving the Human En of Schools: Facilitation (1984) 5.50

Improving the Human Environment of Schools: Problem' and Strategies (1979) 2.50

Improving Writing in Califoxpia Schools: Problems and Solutions (1983) 2.00

Individual Learning Programs for Lanited-English-Proficient Students (1984) 3.50

Instructional Materials Approved for Legal Compliance (1984) 6.00

Literature and Story Writing: A Guide for Teaching Gifted and Talented Children (1981) 2.75

Manual of First-Aid Practices for School Bus Drivers (1983) 1.75

Martin Luther King, Jr., 1929-1948 (1983) 3.25

Mathematics Framework and Addendum for California Public Schools (1984) 2.00

Physical Performance Test for California, 1982 Edition (1984) 1.50

Planning Vocational Home Economics Programs for Secondary Schools (1983) 2.75

Preschool Program Guidelines ((M) 2.70

Raising Expecattions: Model Graduation Requirements (1983) 2.75

Reading Framework for California Public Schools (1980) 1.75

Resources in Health Career Programs for Teachers of Disadvantaged Students (1983) 6.00

School Attendance Improvement: A Blueprint for Action (1983) 2.75

Science Education for the 1980s (1982) 2.00

Science Framework for California Public Schools (1978) 1.65

Science Framework Addendum (1984) 3.00Statement on Competeocies in English and Mathematics Expected of Entering Freshmen (1982) 2.50

Studies on Immersion Education: A Collection for U.S. Educators (1984) 5.00

Techniques for Preventing the Spread of Infectious Diseases (1983) 1.50

Time and kerning in California Schools (19$4) 1.50

Toward More Human Schools: Exemplary Efforts in Self-Concept. Human Values. Parenting,and School Climate (1961) 1.75

Trash Monster Environmental Education Kit (for grade six) 23.00

Visual and Performing Arts Framework for California Public Schools (1982) 125Wet 're Safe: Water and Boating Safety. Grades 4-6 (1983) 2.50

Wizard of Waste Environmental Education Kit (for grade three) 20.00

Orders should be directed to:------ California State Department of Education

P.O. Box 271Sacramento. CA 95802-0271

Remittance or purchase order must accompany order. Puichase orders without checks are acceptedonly from government agencies in California. Saks tax should be added to all orders-from Californiapurchttsers.

A complete list of publications available from the Department, including apprenticeship instruc-tional materials, may be obtained by writing to the address listed above.

A list of approximately 100 diskettes and accompanying manuals, available to member districts ofthe California Computing Consortium, may also be obtained by writing to the same address.

" 14

A

Part I

Financial Reporting

o meet the state's legal requirements governingthe submittal of school district budget and finan-cial information, school districts must submit twobasic fiscal reports at the end of each yeartheAnnual Financial and Budget Report, Form J-41,and the Supplemental Annual Financial Report,Form J41 A.

Annual Financial and Budget Report

The Annual Financial and Budget Report hasthree distinct sections: (1) Income by Source; (2)Expenditures by Object; and (3) Expenditures byProgram. Each section shall contain data for thepreceding fiscal year (actual); the last completedfiscal year (actual); and the ensuing fiscal year(budget).

1. Income by Source. The Income by Sourcesection is used to itemize Beginning Balance,Income by Source, and Incoming Transfers. Asaniple reporting document is Illustrated inExhibit 1-A.'

2. Expenditures by Object. The Expenditure byObject section is used to itemize the variousclassifications of Expense, Other Outgo, andEnding Balance. A sample reporting docu-ment is illustrated in Exhibit 1-B.'

3. Expenditures by Progrum. The Expendituresby Program section is used to summarize thecosts of Instructional Programs, Support Pro-grams, Auxiliary Programs, and Other Outgo.A sample reporting document is illustrated inExhibit I-C.' Program classification definitions are given in Exhibit I-D.

Supplemental Annual Financial Report

The supplemental Annual Financial Report pro-vides for a comprehensive report 'which displays thedistribution of costs to all programs at the sametime. This report also replaces various separatereports previously required. A sample reportingdocument is illustrated in Exhibit 1-E.1

A Sample Program Budget form, is given inExhibit 1-F. Districts will find the use of this formhelpful in the development of costs for programsand st,ecial projects. When completed, the budgetdocument should show projected expenditures byprogram or project and income by source of funds.

Districts should use the preceding year's indirectcost rate in the development of the program orproject budget.

+The actual Annual Financial Reports contain more specific informa-tion and instructions.

15

Exhibit I-A Income by Source

ANNUAL FINANCIAL AND BUDGET REPORT

BEGINNING BALANCE, JULY 1Cash in County TreasuryCash in Bank(s) (E.C. 52704)Revolving Cash Fund (E.C. 42800-42805, 42810)Cash Collections Awaiting Deposit (E.G. 41001-41021)Investments (at cost; E.C. 41015)Accounts Receivable (reported on Form J-43-A)StoresPrepaid ExpenseOther Current Assets

TOTAL CURRENT ASSETSLess: Current Liabilities and Deferred Into ,e (reported

on Form J-43)NET BEGINNING BALANCE (must ogre with Net Ending

Balance repnned for prior yowlAdjustments to Accounts ReceivableAdjustments to Current LiabilitiesADJUSTED NET BEGINNING BALANCE(Summary-Net Adjusted Beginning Balance)

RestrictedUnrestricted

INCOME BY SOURCE8100-8400 Federal Income8110 Maintenance and Operations (PL 81-874)8130 School Construction (Pt 81-815 and 91-600 amended)8140 Education Professions Development Act (PI 90-35) .8150 Economic Opportunity Act (PL. 88-452)8160 Elementary and Secondary Education Act (Pt. 89-10)8170 Job Training Partnership Act (PI 97-30018180 Special Education (PL 94-142)8220 Child Nutrition Programs8240 Vocational Education Amendments of 1976 (PL 94-

482 and 95-400)8310 Forest Reserve Funds8320 Flood Control Funds8330 U.S. Wildlife Reserve Funds8480 "Miscellaneous Funds"8490 Other Federal Income

Subtotal

8500 Combined Federal and State Income8530 Children's Centers8580 "Miscellaneous Funds"8590 Other State and Federal Income

Subtotal

LastPreceding completed Ensuingfiscal yaw fiscal year faecal year(Actual, (Acwsl aktd1101

Col. 1 Cot 2 Cot 3

====== 3=========

XXXXXXXX

Precedingfiscal year(Actual)Col. 1

Exhibit I-A (Continued)

Lastcompletedfiscal year(Actual)Col. 2

Ensuingfiscal year(BudgedCol. 3

8600 State Income8610 Principal Apportionment8620 Special Purpose Apportionment8630 Special Allowance.8640 Apportionment for School Facilities8850 Apportionment for Children's Centers8870 Tax Relief Subventkons X XXX8680 'Miscellaneous Funds"8690 Other State Income

Subtotal ===== ====illi=11

8700 Cc unty Income8750 Contract Services8760 County School Building Aid8780 "Viscellaneous Funds"8790 Other County Income

Subtotal

8800 Local Income8810 District Taxes8820 City and County Taxes8840 Sales

0841 Sale of Bonds8842 Sale of Equipment and Supplies8843 Sale of Land and Buildings8844 Food Service Sales8845 Sale of Publications8849 Other Sales

8850 Rentals and Leases8880 Interest8870 Fees and Contracts8880 "Miscellaneous Funds"8890 Other Local Income

Subtotal

8900 Incoming Transfers8920 Other Tuition8930 Interfund Transfers8940 Special Education Master Plan Transfers

from Districts8960 Special Education Master Plan Transfers

from County Superintendents of Schools8990 Other Incoming Transfers

Subtotal

TOTAL INCOME

TOTAL, NET BEGINNING BALANCEAND INCOME

6/14

=========1

=========I=

====sams cam=

17 1-3

Exhibit Expenditures by Object

ANNUAL FINAN1AL AND BUDGET REPORT

EXPENDITURES BY OBJECT1000 Certificated Salaries1100 Teachers' Salaries1200 School Administrators' Salaries1300 Supervisors' Salaries1400. Librarians' Salaries1500 Guidance, Welfare, and Attendance Salaries1600 Physical and Mental Health Salaries1700 Superintendents', Salaries1800 Certificated Salaries of Administrative

Personnel1900 Other Certificated Salaries

Subtotal

2000 Classified Personnel Salaries2100 Salaries of Instructional Aides for Direct

Teaching Assistance2200 Classified Salaries of Administrative Personnel2300 Clerical and Other Office Salaries2400 Maintenance and Operations Salaries2500 Food Services Salaries2600 Transportation Salaries2900 Other Classified Salaries

Subtotal

3000 Employee Benefits3100 State Teachers' Retirement System

3110 STRSTeachers3120 STRSOther Than Teachers

3200 Public Employees' Retirement System3210 PERSInstructional Aides3220 PERSOther Than Instructional Aides

3300 Social Security (Old Age, Survivors, Disability,and Health Insurance)3310 Social SecurityInstructional Aides3320 Social SecurityOther Than Instructional

Aides3400 Health and Welfare Benefits

3410 Health and Welfare Benefits for Teachersand instructional Aides

3420 Health and Welfare Benefits for All OtherEmployees

3500 State Unemployment Insurance3510 Unemployment Insurance for Teachers and

Instructional Aides3520 Unemployment Insurance for All Other

Employees

1-4

LastAvoiding completed Ensuingfiscal year fiscal yaw fiscal yaw(Actual) (Actual) (Budget)Cot I Col 2 Col. 3

"$4

3000 Employee (Continued)3600 Workers' ion Insurance

3610 Workers' Compensation Insurance forTeachers and Instructional Aides

3620 Workers' Compensation Insurancefor All Other Employees

3900 Other BenefitsSubtotal

4000 Books end Supplies4100 Textbooks4200 Books Other Than Textbooks4300 Instructional Materials and Supplies45(X) Other Supplies4600 Pupil Transportation Supplies4700 Food Services Supplies

4710 Food4790 Other

Subtotal .

5000 Services and Other Operating Expenditures5100 Personal Services of Instructional Consultants.

Lecturers, and Others5200 Travel and Conferences5300 Dues and Memberships5400 Insurance

5440 Pupil Insurance5450 Other Insurance

5500 Utilities and Housekeeping Services5600 Rentals, Leases, and Repairs5700 Interdistrict and Nonpublic School

Services5800 Other Services and Operating Expenditures5900 Support Costs (To Adult Fund Only)

Subtotal

6000 Capital Outlay;

6100 Sites and I of Sites \6200 Buildings and I meld of Building,6300 Books and Media for New School Libraritor Major

Expansion of School Libraries .6400 Equipment6500 EquOment Replacement

Subtotal

TOTAL EXPENDITURES (1000-0000)

Exhibit I-B (Continued)

LastPreceding completed Errata'',fiscal yaw fiscal year fiscal year(Actual) (Actual) (Budget)Col. 7 Col 2 Col. 3

19Is

0,06:0..- 41 0 :0e040:00.^.....0W-4',ToN a.

'Exhibit i43 (Continued/

4

7000 Other Outgo7100 Debt Service

7110 Annual Repayment on Account of PublicSchool Building Apportionment

7120 Annual Repayment on Account of StateSchool Building Apportionment

7130 Bond Redemption7140 Bond Interest end Other Service Charges7150 Repayment of State School Building Fund

Aid by Warrant to the State Treasurer forBond Sales

7160 Payments to Original District forAcquisition of Property

7190 Other Payments

7200 Outgoing Tuition7220 Tuition for Instruction Under Interdistrict

Attendance Agreements (E.C. 46616(b))...7250 Tuition for Re &nal Occupational Centers

or Programs (Current Expense)7260 Tuition for Regional Occupational Centers

or Programs (Capital Outlay)7270 Tuition Paid to School Districts for

Payment of Special Education Master PlanExcess Costs and/or Deficits

7280 Tuition Paid to County Superintendents ofSchools for Payment of Special EducationMaster Plan Excess Costs and/or Deficits

7290 Other Tuition

7300 Interfund Transfers7310 From the General Fund to the Child

Development Fund7320 Between the General Fund and the Special

Reserve Fund

7330 To the Public School Building Fund orto the State School Building Fund from AllOther Funds of the District

7340 From the Bond Interest and RedemptionFund to the General Fund

7350 From the Goners, Fund to the DeferredMaintenance Fund

LestPrecoding couplet& Ensuingfiscal year fiat year fiscal yaw(Actual) Maud) !Budget)Co4 t Col. 2 Col. 3

7300 Interfund Transfers (Continued)

7360 From the General Fund to theCafeteria Fund/Account for the Mettle forNeedy Pupils Program

7390 Other Authorized Interfund Transfers7400 Other Transfers

7410 Transfers from Funds of a Lapsed orReorganized School District to AnotherSchool District

7440 Transfers to School Districts for SpecialEducation Master Plan

7460 Transfer to County Superintendents forSpecial Education Master Plan

7490 All Other Transfers7900 Appropriation for Contingencies

Subtotal

TOTAL EXPENDITURES, OTHER OUTGO, ANDAPPROPRIATION FOR CONTINGENCIES

ENDING BALAN:;E, JUNE 301. Cash in County Treasury2. Cash in Bank(s)3. Revolving Cash Fund4. Cash Collections Awaiting Deposit5. Investments (at cost)6. Accounts Receivable7. Stores8. Prepaid Expense9. Other Current Assets

10. General Reserve, June 30

TOTAL CURRENT ASSETSLess Current Liabilities (reported on Form J-43)

Exhibit 143 (Continued)

LastPreceding annpleisd Ensuingfiscal 'mar fist* year fiscal year(Actual! (Actual, MatedCoL I Col. 2 Col. 2 ,

XXXX XXXX

SP211==== ===Z=====I=

XXXX XXXX

NET ENDING BALANCE ======== az=(Summary of Net Ending Balance)RestrictedUnrestricted

TOTAL EXPENDITURES, OTHER OUTGO, ANDAPPROPRIATION FOR CONTINGENCIES PLUSNET ENDING BALANCE

6/84 21 I-7

Exhibit I-C Expenditures by Program

INSTRUCTIONAL PROGRAMSGeneral Education:

Proforma'ElementarySecondary

Total General Education

ANNUAL FINANCIAL AND BUDGET REPORT

Special Education Master Plan

TOTAL INSTRUCTIONAL PROGRAMS

SUPPORT SERVICE PROGRAMS (DISTRICT TOTALS)Less: Support Provided to the Adult Education FundOnly(Fund VIII)Special Projects (Federal and State Categorical Aid

Programs)Instructional Support:

Instructional AdministrationInstructional MediaSchool Administration

Total Instructional Support

Pupil ServicesGeneral Support:

District and County Superintendents AdministrationMaintenanceOperationsTransportation

Total General Support

TOTAL SUPPORT SERVICE PROGRAMS

AUXILIARY PROGRAMSFringe Benefits Paid on Behalf of Retired PersonsCommunity ServicesFood ServicesFacility Acquisition and Construction

TOTAL AUXILIARY PROGRAMS

TOTAL INSTRUCTIONAL PROGRAMS, SUPPORTSERVICE PROGRAMS, AND AUXILIARYPROGRAMS

OTHER OUTGOTuitionAll Other Outgo

TOTAL OTHER OUTGO

LettPreceding completed Ensuingfie* twa fiscal yaw fiscal year(Action (Amen Muth!CoL 1 CoL 2 Cot 3

=1= ===== =========

amilm=si :=1111111 01111:0=1021022a101.1111

221-8 6/1141

Exhibit 14 (Continued)

Appropriation for Contingencies

Net Ending Balances

GRAND TOTAL, EXPENDITURES FOR *STEW-TIONAL PROGRAMS, SUPPORT SERVICEPROGRAMS, AUXILIARY PROGRAMS, OT EROUTGO, AND NET MING BALANCES

LastPm:Why ampiated Ensuingfiscal year fine Aver Meal yaw(Actual, (Amon (814100Cot I Cal, 2 Cal. 3

XXXX XXXX =1=

=====alr ====== =====r

23

4

Exhibit I-D

PROGRAM CLASSIFICATION DEFINITIONS

The following definitions are applicable to theprogram categories shown in Exhibit 1-C. Theexamples of direct charges are representative and ,are not all-inclusive.

Instrucdonal Programs

General Education. The general education in-structional programs include sweformal, elemen-tary, secondary, regional occupational centers orprograms, and adult education.

General education instructional programs areinstructional activities designed primarily to pre-pare pupils for the common activities as citizens,including occupational preparation. Direct instruc-tional program chwges include salaries of teachers,including amounts paid for chairing an academicdepartment; aides' salaries; employee benefits;textbooks; instructional **plies; equipmentreplacement; and additional equipment.

Examples of services excluded as direct chargesto instructional programs are maintenance ofequipment (to be charged to the maintenanceprogram); field trips (to be charged to the trans-portation program); and custodial services, utilities,and so forth (to be charged to the operationsprogram).

For exceptions to these examples, see thediscussion under Special Projects in this section.

Special Education Master Plan. Special educationinstructional programs are direct instructional activi-ties designed primarily for individuals with excep-tional needs placed pursuant to an individualizededucational program (SEP). The activities are similarto general education.

Transportation of special education pupils is to be adirect charge to the transportation program and sub-sequently transferred to the special education trans-portation program as a direct support cost.

Regionalized Services means those programs andservices provided pursuant to an approved local planfor Special Education Master Plan such as programspecialist services, personnel development, evalua-tion, management information systems, curriculum

I 0

development, program review, or any other regional-ized service provided for in the local plan.

Life or Grads Soo

Preforms! means those programs and servicesprovided by the district for children of prekinder-garten age.

Elementary means those programs and servicesprovided for pupils enrolled in kindergartenthrough grade six or kindergarten through gradeeight in unified tbstricts, and kindergarten throughgrade eight in elementary districts.

Secondary means those programs and servicesprovided for pupils in grades seven through twelveor nine through twelve in united districts, gradesnine through twelve in high school districts, orgrades seven through in high school districtsmaintaining junior higli s.

Regional occupations/ centers or programs(ROC/ROP) means those vocational or technicaltraining programs and services provided as definedin Education Code sections 52300-52330 andCalifornia Administrative Code, Title 5, Eaucation,sections 11500-1150S.

Support Service Programs

SPagal Protons

Special projects are projects and programs thatmay have their own project directors; are approvedand funded by state, federal, or private agenciesand require special project budgets and audits; andmay require financial reports. They usually areentirely in support of an instructional program oranother support program. Direct charges shall bemade to a special project when the expenditureclassification has been expressly funded by thedonor.

The charging of donor-authorized costs directlyto special projects means that the district maynever have available the total expenditures madefrom all funds for various support items such asadministration, pupil services, operation, mein-tenance, transportation, and so forth. Although itis not required for state reporting, the district

24 6 /1f

should display at the end of the fiscal year thetotal expenditures in each of these supportcategories by summarizing the expenditures madefrom general support and categorical aid support;this activity would be most helpful for localmanagement purposes.

Special projects include, but are not limited to,the following programs:

1 School Improvement Program2. American Indian Early Childhood Education3. Economic Impact Aid4. Miller-Unruh Bssic Reading Act5. Vocational Education Act6. Education Consolidation and Improvement Act,

Chapter 1 (Regular, Neglected, and Delinquent)7. Education Consolidation and Improvement Act,

Chapter 28. Job Training Partnership Act, Titles I, 11,,I11, IV,

and V9. Title VI, Education for the Handicapped Act, Part

B

Instructional Support

Certificated or classified employees assigned toinstructional support programs may not be classi-fied as teachers or instructional aides.

Instructional Administration. Instructional ad-ministration is the area of responsibility for theimprovement of teaching through a program ofleadership, guidance, and assistance to aid teachingstaff and to improve curriculum and curriculummaterials used by teachers. It consists of super-vising instruction, developing and improving cur-ricula and curriculum materials, guiding teachers inthe Ilse of instructional materials, administeringsabbatical leave, providing for in-service training,and so forth.

Normal direct charges to this program includethe salaries of director(s) or supervisor(s) of ele-mentary and/or secondary instruction or curric-ulum laboratories, clerks, employee benefits,consultants for inservice training, instructionalsupplies, office supplies, travel and conferenceexpenses for assigned personnel, equipmentreplacement, and additional equipment.

Expenses for those activities that have as theirpurpose overall general administrative responsi-bility for the entire school district or countysuperintendent's office are not charged here. Theseexpenses shall be charged to the district administra-tion program.

6/54

Exhibit 1-D (Continued)

Instructional Media. Instructional media is theprogram area consisting of those activities whosepurpose is to provide resources to support instruc-tion for a school or a school district. Included inthis category are the following:

School Library and Audiovisual. A schoollibrary and audiovisual program includes respon-sibility for organizing and nfanaging librarybooks and preparing, caring for, and makingavailable audiovisual equipment, materials,scripts, and other aids to teaching and termingthat have special appeal to sight and hearing.Activities include ordering, cataloging, process-ing, and circulating books and audiovisualmaterials and equipment; planning for the use ofthe library by teachers and pupils; selectingbooks and audiovisual materials; participating infaculty pianning for the use of books andaudiovisual materials; and guiding teachers andpupils in the use of the library.

Educational Television. An educational tele-vision program consists of such activities aswriting, programming, and directing educationaltelevision programs as a part of the instructionalprogram of the school or district.

Computer Assistance in Instruction. Com-puter assistance in instruction for a school or aschool district consists of such activities aswriting, programming, and directing ongoingcomputer-based instructional programs andinstructional management information pro-warns.

Direct charges to the instructional media pro-gram shall include salaries for librarians, libraryclerks, audiovisual personnel, personnel involved inwriting, programming, and directing ongoingeducational television and computer-based instruc-tional programs; employee benefits; library books,regardless of where they are placed in the district;audiovisual materials; replacement of and addi-tional audiovisual and library equipment.

Textbooks are not charged here; they "arecharged to the appropriate instructional program.

Computer assisted instructional activities of anexperimental nature are not charged here; they arecharged to instructional administration.

School Administration. School administrationconstitutes those activities that have as theirpurpose overall administrative responsibility for a

25

Exhibit 1-D (Cr.,tinued)

single school or several schools (but not a district).It consists of the activities performed by theprincipal, assistant principals, and other assistantsin the general supervision of all operations of theschool; evaluation of the staff members of theschool; assignment of duties of staff members;supervision of the records of the school; coordina-tion of school instructional activities with instruc-tional activitiikof the school district; and so forth.

Pupil Services

Attendance. Attendance includes those activitiesthat promote and improve school attendance ofpupils. Attendance services consist of such actin.ities as early identification of patterns of nonatten-dance, promotion of positive pupil and parentattitudes toward attendance, analysis of causes ofnonattendance, early action on problems of non-attendance, and enforcement of compulsory atten-dance laws. The mechanics of attendance recordingand reporting on a districtwide basis is charged tothe district administration program.

Welfare. Welfare includes those activities thatassist in the prevention or solution of the personal,social, and emotional problems of pupils involvingfamily, school, and community relationships whensuch problems have a bearing upon the quality ofthe schoolwork of pupils. It consists of suchprofessional services as diagnosing the problems ofpupils arising out of the home, school, orcommunity; undertaking casework services for thechild or parent or both; interpreting these prob-lems of pupils for other staff members; andpromoting modification of the circumstancessurrounding the individual pupil that are related tohis or her problem insofar as the resources of thefamily, school, and community can be brought tobear on the problem. These activities are usuallyassigned to such staff members as school socialworkers, visiting teachers, or directors of schoolsocial work. Programs providing wearing apparelfor children are included here.

Guidance. Guidance includes those activitiesthat help pupils assess and understand their abil-ities, aptitudes, interests, environmental factors,and educational needs; assist pupils in understand-ing educational and career opportunities; and aidpupils in making optimum use of educational andcareer opportunities through the formulation ofrealistic goals. Guidance includes such activities as

1-12

counseling pupils and parents, evaluating the abilities of pupils, assisting pupils to make their owneducational and career plans and choices, assistingpupils in personal and social adjustments, andworking with other staff members in planning andconducting guidance programs. Guidance alsoincludes administering psychological tests andmanaging and planning a program of psychologicalservices for the school system.

Counseling. Counseling covers those activitiesthat supplement the school system reservoir/ofinformation identifying the individuality of eachpupil, his or her capacities, achievements, interests,potentialities, and needs; study the individual pupilexperiencing acute problems of educational devel-opment to furnish diagnostic information; andsuggest programs concerning the psychologicalaspects of these problems.

Health. Health covers those activities that pro-vide physical and mental services not directlyinstructional, such as medical, dental, psychiatric,and nursing services.

Direct charges to the pupil services program shallinclude salaries of counselors, attendance ()Views,psychologists, nurses, physicians, psychiatrists, andother personnel authorized in the field of physicaland mental health who are employees of thedistrict; salaries of secrtaries and clerks; employeebenefits; office, medical, dental, and first aidsupplies; travel and conference expenses for per-sonnel employed in pupil services; contractualservices of personnel who are not on the payroll ofthe district; equipment replacement; and additionalequipment

General Support

Administration by the Office of the CountySuperintendent and the District. Those activitiesthat have as their purpose overall general adminis-trative responsibility for the entire county super-intendent's office or school district are classed ascounty/district administration. Direct charges tothis program include payments to and on behalf ofgoverning board members and staff; salaries of thesuperintendent, deputy, associate, area, and assis-tant superintendents; business managers; personneldirectors; and directors of pupil services for thegeneral direction and management of all affairs ofthe school district The cost of attendance record-ing and reporting on a district-wide basis is alsocharged to this program.

26sIg4

44.

Direct charges to this program shall also includesalaries of administrative secretaries and clerks andaccounting and pur acing personnel; employeebenefits for all emplo ees in this program; supplies;materials; travel and conference expenses; equip-ment replacement and additional equipment.

Salaries and other related costs of employingretired personnel shall be charged to the programsto which the persons are actually assigned.

Whenever possible, initial charges for insuranceshould be direct costs to the appropriate userprograms, such as: pupil insurance and drivertraining vehicle insurance to General Education;fidelity bonds and bond liability insurance todistrict administration; insurance on buses andpupil transportation vehicles to pupil transporta-tion; and insurance on food service vehicles to foodservices. Charges for general fire and liabilityinsurance should be charged as a direct cost to thedistrict administration program and allocated asdirect support to the user program. Costs ofinsurance which cannot be specifically identified toother purposes should be charged initially to thedistrict administration program until such identifi-

111 cation can be made.

Maintenance. Maintenance includes those activ-7- sties that are required to repair, restore, or renovate

school property, including grounds, buildings, andequipment.

Included as charges to this program are salariesand employee benefits for directors and supervisorsof maintenance, carpenters, painters, electricians,plumbers, and the like; necessary materials andsupplies; rental and replacement of maintenanceequipment; and contracts for repair, restoration, orrenovation of the grounds, buildings, or equip-ment, including regrading sites; repairing retainingwalls, walks, driveways, sprinkler systems, andplayground apparatus or equipment; reseedinglawns; repainting; repairing or replacing roofs,walls, heating and air conditioning units, andelectrical and plumbing installations; repairingbuilding fixtures; resurfacing and refinishing floors;moving movable walls or partitions; repairinginstructional and noninstructional equipment;repairing vehicles other than pupil transportationvehicles; equipment replacement and additionalequipment

4110Examples of items to be excluded are materials

which must be replaced frequently, such as light

6/84

Exhibit I-D (Continued)

bulbs and fluorescent tubes, fuses, and so forth.These items must be charged to the operationsprogram.

Changes of partitions (nonmovableptype), walls,and roof structures should be charged to thefacilities acquisitiOn and construction program.

Operations. Operations are those housekeepingactivities concerned with keeping the physicalplant open and ready for use. Included are cleaningand disinfecting; heating and lighting; communica-tions; maintenance of power; moving of furniture;caring for grounds; garbage and trash disposal;laur &icy and drycleaning service, including therental of towels; rental of equipment such as floorpolishers; soft water service; and such other hOuse-keeping activities as are repeated somewhat regu-larly on a daily, weekly, monthly, or seasonal basis.

Salaries and the employee benefits to be chargedto this program include those for directors andsupervisors of operations, custodians, guards,gardeners, telephone switchboard operators, truckdrivers, operations clerks, security personnel, andthe like.

Supplies normally charged to this programinclude brooms, brushes, disinfectants, fuses,garbage cans, light bulbs and fluorescent tubes,mops, wax, soap, toilet paper, towels, outdoorflags, weed killers, fertilizers, office supplies, equip-ment replacement, and additional equipment.

Pupil Transportation. Pupil Transportation meansthe conveying of pupils to and from school activities,either between home and school or between schools.

Direct charges to the transportation services pro-gram shall include salaries and the respective employeebenefits for directors and supervisors, bus drivers,clerks, and mechanics; gas, oil, tires, and parts andsupplies for the repair and maintenance of the buses;office supplies; insurance on buses and other pupiltransportation vehicles; contracts for outside repair;contracts with individuals, other districts, or firms fortransporting pupils; rental of buses; replacement ofthe buses and other equipment; and the purchase ofadditional equipment, including buses.

Repair and maintenance of othe6 district-ownedvehicles shall be a direct charge to the maintenanceprogram.

271-13

V

Exhibit I-D (Continued)

Auxiliary ProgramsA

Community Services. Community services arethose activities that have as their purposecommunity and schoe'. recreation and other activ-ities authorized by the Civic Center Act (EducationCode Section 40040 et seq.), the CommunityRecreation Act (Education Code Section 10900 etseq.), and Duty-free Lunch Periods for Teachers(Education Code sections 44813 and 44814).

Salaries and employee benefits for playgrounddirectors, noon supervisors, clerks, and otherinstructional or recreational personnel and thenecessary expenditures to conduct activities underthese acts are recorded as direct charges to thisprogram.

Fringe Benefits on Behalf of Retired' Parsons.Direct charges to this program include all fringebenefits paid on behalf of retired personnel.

Food Services. Food services indiudes manage-ment of the food services program of the school orschool district, including the preparation and serv-ing of regular and incidental meals, lunches, orsnacks in connection with school activities and thedelivery of fcod.

Direct charges to this program shall includesalaries and the respective employee benefits fordirectors and supervisors, managers, cooks, helpers,bookkeepers, and clerks; food; meals for needypupils; operating supplies; costs of purchase andoperation of vehicles used in the delivery of foodto various locations; auditing services; insurance onfood service vehicles; replacement of equipment;and additional equipment.

Facilities. Direct charges to facilities include allcosts of obtaining land and buildings; throughpurchase, lease, rental, or lease with option topurchase; major remodeling of buildings; construc-tion of buildings and additions to buildings; initial)installation or extension of service systems andother built-in equipment; initial improvements tosites; and books and equipment for new buildings.

Costs of leased or rented facilities shall bedistributed as direct support charges to the userprogram.

The salaries and other expenses of school districtemployees assigned specifically to the facilitiesprogram, or architects, engineers, and contractorshired for capital improvement projects arerecorded in this program.

1- 14

Expenditures for all repairs to building struc-tures (except repairs that add to existing facilities)are recorded in the maintenance program.

As a general guide concerning repairs to buildingstructures, ifchanges of partitions (non..iovabletype), the roof structure, or walls are not involved,the expenditures. are recorded in the maintenanceprogram; if such changes are involved, the expendi-tures are recorded in the facilities program.Expenditures for the initial installation and exten-sion of service systems and other built-in fixturesin existing buildings are recorded in the facilitiesprogram, and expenditures for repairs and replace-ments of service systems and other built-in fixturesare recorded in the maintenance program.

Expenditures for nonconsumable articles gener-ally classified as supplies, but necessary to start ormaterially expand the equipping of a school,classroom, a specified area other than a classroom,or another facility shall be charged as equipment tothe facilities program. Examples are small tools,dishes, utensils, pencil sharpeners, staplers, andlibrary books.

4ow

Other Outgo

Debt Service. Debt service consists of expendi-tures for the retirement of debt and for interest ondebt, except principal and interest on current loans(money borrowed and repaid during the sameyear).

Outgoing Tuition.' Outgoing tuition is tuition forjunior high school, tuition for instruction underinterdistrict attendance agreements, tuition forregional occupational centers and programs, andother tuition.

thier fund Transfers. Inter-fund transfers consistof Various transfers from the General Fund tovarious other funds and from the various funds tothe General Fund.

Appropriation for Contingencies. Appropriationfor contingencies is that portion of the :currentfiscal year's appropriation that is not deirignatedfor any specific purpose but is held subject tointrabudget transfers.

Site or Operational UnitInstructional and support programs may be

identified by school site, location, or operationalunit in order to provide additional managementinformation relative to the total operation of adistrict.

28 6/14

NORMAL OBJECT CLASSIFICATION OF EXPENDITURES BY MAJOR PROGRAM FUNCTIONS

Object by program

instructionalprogramsWawa/

andweciai

education)Specialprojects

Instructionaladministration

1000 Certificated Salaries

1100 Teachers' Salaries1200 fchool Administrators' Salaries1300 Supervisors' Salaries1400 Librarians' Salaries1500 Guidance, Welfare, and Attendance Salaries1600 Physical and Mental Health Salaries1700 Superintendents' Salaries1800 Certificated Salaries of AdMitleStfatiVe

Personnel.1900 Other Certificated Salaries

2000 Classified Personnel Salaries

2100 Instructional Aides for Direct Teaching Assistance2200 Classified Salaries of Administrative Personnel ...2300 Clerical and Other Office Salaries2400 Maintenance and Operations Salaries2500 Food Services Salaries2600 Transportation Salaries2900 Other Classified Salaries

3000 Employee Benefits

3110 STRS Tear. hers3120 SIRS- Other Than Teachers3210 PERSInstructional Aides3220 PERSOther Than Instructional Aides .....3310 Social SecurityInstructional Aides3320 Social SecurityOther Than Instructional Aides3410 Health and Welfare Benefits for Teachers and

Instructional Aides3420 Health and Welfare Benefits for All Other

Employees3510 Unemployment Insurance for Teachers and

Instructional Aides3520 Unemployment Insurance for All Other

Employees3610 Walkers' Compensation Insurance for Teachers

and Instructional Aides3620 Workers' Compensation Insurance for All Other

Employees3900 Other Benefits

29

Support service program

Instructianst-support Pupil services

Instruct:10nelmedia

larvaadministration

Attembnce*Whoa

Guidance/C041Inellf,

30. ts,s1 6.1.4 Alia'

NORMAL OBJECT CLASSIFICATION OF EXPENDITURES BY MAJOR PROGRAM FUNCTIONS

Object by prearem

instructional IprogramsMenem/

andWOW

ofueeffen1

&wort service programs

Specialprojects

1 notructional 114epport Pupal servioss

Instructionaledrelnietration

Instructionalawes

5-alonlnlstretion

A teandence/welfare

Gaitioneefcounseling,

4000 Seeks and Supplies

4100 Todbeoks4200 Seeks Other Than Taiedieeks4300 Instruction. lideterhas end Supplies4600 Other Sumba4000 Pupil Trensperteden Supplies4700 Feed ilifyigell Supplies

WOO Services sad Other *pewee, ilbspendihwee

6100 Pereenel Services el Instrustionet Conevaarns.Lectssars, and Others

1200 Travel and Conterences6300 Owes and Memberships6400 Wanes6500 Utilities and Neveekespine Service*14100 Rentals, Wades, and RepairsMOO Other ilaivieee and Operating mares

6000 Csollel Outlay

0100 Sims and Improtement of Sites6200 Suildirips and improvement if Staidinps6300 Seeks and Metes for New Settee, Libraries or

irepenelan of Scheel Libraries11400 Equipment6800 Equipmeot haptacement

ri 31

General support

114

.

District/county

stperimentientsedministrition

1000 Certcated Salaries

1100 Teachers' Salaries1200 School Administrators' Satirise1300 Supervieors' Salaries1400 Librarians' Salaries1500 Guidance, Welters, and Attendance Salaries1800 Physical and kismet Health Salaries1700 Superintendents Salaries1800 Certificated Sabots* of Adminietrative

Office Personnel .

1000 Other Certificated -Salaries

2000 Classified Personnel $ alaries

2100 Salaries of Instructional Aides for Direct TeachingAartistince

2200 Classified Salaries of Administrative Personnel2300 Clerical and Other Office Salaries2400 Maintenance and Operations Salaries2500 Food Services Salerise2000 Treneportetion Sal/rise2900 Other Claseffied Salaries

3000 employee illeneffts

3110 SIRSTeachers3120 SINSOther Than Teachers3210 PERSInetruotional Aides3220 PERSOther Than Instrucdonsi Aides3310 Social SecurityMetructional Aides3320 Social SecurityOther Than Instructionai Aides3410 Health and Welfare Benefit* for Teachers end

Instmetiensi As3420 Health and Welfare Benefits for AA Other

EmPloyees3510 Unemployment Insurance for Teachers and

Instructional Aides3520 Unemployrnent Insurance for Ali Other

emPlcrnote3010 Workers' Compensation Insurance for Teachers

and Instructional Aides3820 Workers' Compensation Insurance for AR Other

Employees3900 Other Senefits

7 33

WON.IWO*

jOpmrtions

MOM*POrtetiOn

Foodserviess

Facilitiessequisitloa

endconsevetien

-0

34

0. k?' k. , wf,

NORMAL OBJECT CLASSIFICATION OF EXPENDITURES BY MAJOR PROGRAM FUNCTIONS00 Cle======l=

Obiect NY Prollrein

&wan tarded PrOgrelniGeneral support Auxiliary programs

District/county

superintenairntsadministration

Menne-flanCe Operations

Trans- Cornmunitrportation services

Foodservice

Facilityacquisition

andconstructkm

4000 Book* and Sappho* nliPl--Inetti4100 Textbooks4200 Books Other Than Textbooks4300 Instructional Materiels end Supplies4500 Other Supplies4600 Pupil Trensportation Signifies

6000 Services and Other Operating Expenditures

5100 Pereonal Services of Instructional Consultants,LiCtirrOrt end Others

5200 'Travel and Conferences5300 Dues and Memberships5400 idduallfX*5600 Minim and thnissiteePihil Services5100 Rentals, Lessee. end Replan5700 Intmeistrict and Nonpublic School Services5800 Other Services and Operating Expenditures

6000 Capital Outlay

6100 Sites and Improvement of Sites6200 Suedings and Improvement of Buildings5300 Books and Media for New School Libraries

or Major Expansion of School Libraries6400 Equipment8500 Equipment Replacement

7000 Other Outgo

7100 Debt Service7200 Outgoing-Tuition7300 knerfund Transfers7400 Other Transfers7900 Appropriation for Contingencies

25

OdIrarale aweDepIrtment d Edam:leaFon. J-41-4 (Rev. 644)

Suppfeasental Annual Financial Report, IMMO.Port 1Ganaral Fund

(Form No. MIA)

School District, County, California

(FOR STATE USE ONLY)

IIf

TYPe of programDirect costs

Died supportcons

Ogg) In(*)2

Total directapd direst

nepport costs(Cot 1 + Cot 2)

3

Optional midi &Met(to be completed by nate)

Indirect coots

Prollogiland maid

project costs(rot 3 + Col. 4)

5

Capital outlayiNCIIIIINI Idiced coon

(Col. I)6

INSTRUCTIONAL PROGRAMSGeneral Education

Preformsl

Elementary

Secondary

Regional occupational center or program' .

Tatol, Gerund Uncork's:Special Frisartion Idestre Plan (rtriellhill

expenditures under Pt. 94-142):Special day class

Resource specialist

Designated instruction and services

NNonpublic schools

Regionalized services

Transportation

Thug Special Education

TOTAL, INSTRUCTIONAL PROGRAMS_

SUPPORT SERVICES PROGRAMSSpain Projects

School improvement program

Gifted and talented pupils

MillerUnruh Basic Reading Act

Job Train* Partnership ActVocational EA/cation Act (PL 94-442/95-40)

VOCILiMal educationBilk grant (Subpart 2)

Supportive services (Subpart 3)

i m

1 i j

120

121

130

200

210

220,230

240

250

260

270

275

290

290

295

(Doffs only)

1111111111111111111111111111111111.1111111.

111.111111=11111111111111111111111111111111

MIIIIIIIIIIMIIIIIIMIIIIIIIIIIIIIIIIIIIIMIIIIIIIIIIIIIIIII1111111111.11111111111111111111111111111111M

:.00IIIIIIIIIIIIIIIIIIIIMMMIIIIIIIIIIIIIMIimmimmiimIIIIIMIIIIIMIIIIIIIIIIIIIIIMIMIIII111111

11111111111111111==111111111111111111111.11111111111111.1111111111111

(DoBars only) (Dollars only) (Dollars only) (Dolersonly) (Dollars only)

1.1111111111111111111111111.1

11111111.111111111111111.11111111.1111111.1.1111111111111

MEIIIIIIIIIIII

11111111111.11

IIIIIIIIIIIIIIIIIIIIIIIMIIIIIIIIIIIIIII

IIIIIIIIIIIII

.11.11=11111.11111111.ME=111111111.111

111111111111111.1.1.1111111111

MIIIIIIIIIIIIIIII111111.11111111

111111111111111111111111111111IIIIIIIIIIIIIIII

300

305

IIIIIIIIIII.11111111111111

IIIIIIMIIIIIIIIIIIIIIIIIIIIII=I

Yob t... enrns ........4 W.. r....i.Ai.&.1..a

37 38

7

trf '471011-1x."."1"

Form ASIA (Raw. 6-84)

Type of prosiest

SUPPORT SERVICES PROGRAMSSpedgf Iketecte

Vocatimal Education Act (contented)Special prosissusterrices for

disaarestaged (Subpart 4)

Comma sad homemaidissWWII 5)

FlIFOIF, !MOW 115,'N'2.%* ^44 11 ''It,49.A?N*,1*Avrearit ,t

Promos for handicapped (Item and fedandfunds)

EC1A. ChapterRetailer

!kpiected and delinquent

Chapter U

Economic Impact Aid (EC 54028, 52168)

StAt Jevelopment t AB 551. Amick I) ....State hospital modems loggia! eduestson

All other protects

Total, Special fro/actsiniarectional Support

Instruction4ladounisivition .

Instructional media

School sdnunntraton .

Toed, histructiosai Support

Pupil Services

0, 4V

8uppletnentel AIM*, F10181811411 Report, 1983414Pert 1General Fund

Pass 2

Optional with &W et(to be completed by otate)

Total popsy Capital motleysad model Included in

point costs dtrect costs(Ca. 3 Col. 4) (Cal. I)

5 6(Donets only) (Dollars only)

le 39x

L 1 I 1

I 1 i 1 1

1 1 0

1 ,1_-11

1 1 V

.11 I

1

A

la X I

I 0 I

# 1 # A 1 I ,

I I

ti

1 I

1 1

11

/4

4;0; ,,0441"4.9kr #10,7; 4lari

/

d);;#,,z,i /41.; .1"."0

%/ha

monmomm=

1.1., 1

11 I

4:0qq/x0,egOe,

V

1 I I

;: ,/,;.

1

.4 .4 .:047 fizewavoc,

rr. 16/Ation

ytA'A/14/,'

r/

11

)

%.11VelF.1 :isTaFF4spa,iw.wimprrym?;,

Form J1A (Rua. 6-$4)

-r°!Y24.74.krArmswr

Suppionsantal Annual Financial Report. 1983.84Part 1-Bowan d Fund

The formula for determining the state and federal The formula for determining the nate and federal restricted indirect cost rate is:nonrestricted indirect con rate is:

Col. 310- nonrestricted indirect east rateCa 3 (a b c)

t 43

UrStir4i7nA

Page 4

Cal 3(d) Residual in Maintenance and Operations in Col. 3 s nsuiciod indirect east (kow &ciao! places rounded to mania ear Iran-li(sbc) Residual in Maintenance sad Operations in Cot 3 dredtb of one percent; e.g.. .0213: 2.13%)

CERTIFICA11001 DIM= SUFSINTIENDENT CatlIFICATION BY morn suremormreern

I hereby twt(fr that. to the best of my bowls* and belief thisreport is :nee wed I ham otemised this report mood Air certil), dart, A o the beet of my bowls**,altrea mod belief, ell infornattiots comosivied hem& Is corteeT end complete.

Signed Date Seined DateCity/district ouparhneadsat County mptsintteilant of who&

FOR SUFFLENENTAL INFORNATNIN. !PLEASE CONTACT

District employes Telephone number County employee Telephone number(Ares) Oeusabor) (Est) (Am) flikimbet) (Eat.)

44m

sr

4

SAMPLE PROGRAM BUDGET(for use in development t of program budget)

Special protect or program title

Exhibit I-F

Fiscal veer

PUPIL/EMPLOYEE DATA: Number

1. Enrollment2. Average daily attendance or participation data

a. Kindergarten and grades one through eightb. Grades nine through twelve

c. Total (2.a and 2.b)

3. Teachers (full-time equivalent)4. Other Certificated Employees (full-time equivalent)5. Classified Employees (full-time equivalent)

DIRECT COSTS:

6. Certificated Salaries7. Classified Salaries8. Employee Benefits9. Books and Supplies

10. Equipment Replacement11. Contracted Services (5100 and 5600)12. Other Operating Expenses (5200, 5300, 5400, 5500, and 5700)

13. Subtotal (lines 6 through 12)

14. Capital Outlay

15. Total Direct Costs (lies 13 and 14)

Amount

$

DIRECT SUPPORT 'CHAtIGES:

16. Instructional Support ( Instructional Administration, Media, and School Administration) .

17. Pupil Services18. General Support (District Administration, Maintenance, Operations, and Transportation) .

19. Subtotal (lines 16 through 18)

20. Auxiliary Services

21. Total Direct Support Charges (lines 19 and 20)

INDIRECT SUPPORT CHARGES:

22. Total Indirect Support Charges (percentage of remaining costs allocated to this program)(See page 1-22 for indirect cost rate formula.)

23. Total, Cost of Program (lines 15, 21, and 22)

'REVENUE SOURCES:

24. Federal25. State26. County27. Local

28. Total Revenue

6/114 45 1-23

1"11`*P"to-,, 4 4 -41:0 6, 1 or Pl!'7%

Part 11

Income

Income includes both revenue and ncsurvenuereceipts. Revenue receipts are additions to assetsfor which no obligations are incurred by the schooldistrict and may be used for expenditures at thediscretion of the governhig board of the districtRevenue receipts include money received throughstate apportionments and district taxes. Nonreve-nue receipts consist of money received in embossfor property of thi: school district or receipts forwhich the district incur; an obligation, such asmoney received throug1 loans or the sale of bonds.Bond or loan receipts must be used by thegoverning board of the district for the purposesoutlined at the time loans are seemed or bonds areissued.

The instructions in this"manual provide foruniform identification and classification of thereceipts for all the funds and_ accounts of a schooldistrict. The instructions should be followed in (1)the day-to-day accounting for receipts; (2) thepreparation of budgets; and (3) the preparation ofall financial reports. The instructions are applicableto the budgeting, accounting, and reporting of theGeneral Fund and of all special funds of everyschool district. The designation of the incomeclassification applicable to any particular receiptshall not be interpreted to mean that suds incomerepresents an income of the General Fund or ofany particular special fund. The selection of thefund must be made in accordance with theprovisions of law. In no case should designation ofthe income classification, such as 8100, FederalIncome, or 8700, County Income, be confusedwith the selection of the fund, sudi as the GeneralFund, Building Fund, or Cafeteria Fund.

School districts operating on a cash basisaccount for income when it is received. Districtsoperating on an accrual basis account for incomewhen it is earned. The school district budget formprescribed and the annual financial report form

6/84

supplied by the Superintendent of Public Instruc-tion contemplate the use of the accrual basis ofaccounting for expenditures and the partial accrualbasis of accounting for the into of schooldistrict funds, except for the Bond Interest andRedemption Fund. The accounting and reportingof a school district's Bond Interest and Redanp-tion Fund either on a cash basis or on an accrualbasis, as determined by the county auditor, areacceptable to the Superintendent of PublicInstruction.

Classification of Income

School districts are requited to classify incomeaccording to the major and subordinate classifica-tions outlined in this section. Major clasidficationsare printed in boldface roman capital and lower-case letters; for example, 8100, Federal Income.Required subordinate classifications are printed inboldface italic capital and lower case letters; forexample, 8110, MIthitenonee es d Operation (PublicLaw 81-874). Many school districts may find itdesirable to increase the number of subdivisions ofthe income classifications in accordance with localadministrative needs.

Major classifications of income are as follows:

8100-84998500-8599

8600 -86998700 --87998800-88998900-8999

Federal IncomeCombined State and Federal

IncomeState IncomeCounty IncomeLocal III conicIncoming Tninsfers

Instructions for Using Incomeawisifications

8100-8499 Federal Income

Record in the appropriate subordinate classifications allincome received from the federal government. Record

u-1 46

federal income for which the state or any other agencySOWS as the distributing agency. Identify the purposes forwhich income is received and account for the moneyreceived for each purpose.

8110 Maintenance and Operations (Public law81-874)Record amounts allowed for maintenance andoperation resulting from the identification ofstudents or parents in federally impacted areas inaccordance with Federally Impacted Aid programs.

8130 School Construction ( Public Laws 81-815and 91-600 amended)Record amounts allowed for school constructionand facilities acquisition.

8140 Education Professions Development Act,11-1 turd B-2 (Public Law 90-35)Record amounts received from federal agencies forthe Education Professions Development Act, Title1.

8150 Economic Opportunity Act (Public Law88-452)Record amounts received directly from federalagencies for Economic Opportunity Act programs.

8160 Elementary and Secondary Education Act(Public Law 89-10)Record amounts received from federal agencies forElementary and Secondary Education Act pro-gram.

8170 Job Training Partnership Act (Public Law97-300)Record amounts received from federal sourcesunder the provisions of the ComprehensiveEmployment and Training Act. including amountsreceived under provisions of the EmergencyEmployment Act of 1971 and Public EmploymentAct programs.

8180 Special Education (Public Law 94-142)

8181 Entitlement Aid Per Unchtplicated Count

8182 Grant Aid for Appnaval Projeds

8220 Child Nutrition ProgramsRecord amounts allowed for the school lunchprogram, special milk program, school breakfastprogram, food assistance program, and specialassistance program (free meals) received fromfederal sources.

11 -2

8240 Vocational Education Amendments vf ion(Public Laws 94-482 and 95-40)Record amounts allowed for Vocational Educa-tion Amendments 011976 programs from federalsources.

8310 Forest Reserve Funds (Education Code Sec-tion 2300)Record all income from forest reserve funds appor-tioned by the federal government but distributedto the district by the county superintendent ofschools with the approval of the county board ofeducation.

8320 Flood Control Funds (Education Code Sec-tion 1606)Record all income from flood control funds appor-tioned by the federal government but distributedto the district by the county superintendent ofschools with the approval of the county board ofeducation.

8330 U.S. Wildlife Reserve FundsRecord amounts received from U.S. Wildlife

Reserve funds.

8480 "Miscellaneous Funds" (Education CodeSection 41604)See explanation on page 11 -8.

8481 Royalties and Bonuies8484 Payments in Lieu of Taxes

8490 Other Federal FundsRecord all other federal funds received exceptfunds defined as "miscellaneous funds" by theCalifornia Administrative Code, Title 5, Education,Section 17261. These are to be recorded inclassification 8480, hfistrilaneous Funds.

8500 Combined State and Federal Income

Record in the appropriate subordinate classes of this majordais all income received that includes combined state andfederal funds and that is distributed by the state agencywith no indication of how the allowance is proratedbetween federal and state funds.

8530 Children's Centers (Education Code Section8206)Record amounts allowed for day care centers andmigrant day care centers.

47 6/84

8580 "Mbeeilaneosu Funds" (Education CodeSection 41604)See explanation on page 11.8.

8581 Royalties anillonstses

8584 Payments in Li;u of Taxes

8590 OtherRecord all other combined state and federal fundsexcept funds defined as "miscellaneous funds" bythe California Administrative Code, Title 5, Educa-tion, Section 17261. These are to be recorded inclassification 8580, "AffsreManeous Funds. "

8600 State IncomeRecord in the appropriate subordinate classes of this majorclass all state funds received. Do not record federal funds

trthuted by the state. These are to be recorded underf ral income. By law, any State School Fund apportion-

nt or allowance to a school district must be deposited in;General Fund of the school district.

such amounts should be accounted in terms of the grossamount apportioned. Deductions and withholdings made

eiby the State Controller as required by law must beaccounted as expenditures in the same moaner as if the fullamount had been received and a school district warrant hadbeen drawn for such purpose.Seventh and eighth grade tuition adjustment is made by thestate before gross apportionment is determined.hicome received in correction of a prior apportionment(Education Code Section 41341) or included in the FinalState Apportionment should be recorded in the class orclasses that define the original apportionment.

8610 Principal Apportionment

Record all aunts allowed under the PrincipalApportionmen't, including advance apportion-ments, basic and equalization aid, and final appor-tionments. Record also flat grant allowancesreceived from the following programs on a currentbasis:

6/84

8611 State Aid Portion of Revenue Limit

8612 Special Education Master Plan

8613 Special Ed catkin Master PlanTrans-portation

8614 Special Education Master MaPrograma Spedalists and Region-sized Services

8617 GOVed and Talented Pupils

8620 Speck! Purpose ApportionmentRecord amounts received dor the expenses ofmaintaining any or all of the following programsduring the preceding fiscal year:

8621 Driver Trebling

8622 TransportationRecord amounts received for transporta-tion, based upon records of expense andapproved capital outlay, of furnishing, dur-ing the preceding fiscal year, transportationof pupils between their homes and theregular full-time day schools attended bythem.

8624 Urban Impact Aid (Education CodeSections 54060-61)

8625 School Improvement Program andStaff Development (Education CodeSections 52013-14, 52049)

8626 SW/ Development

8627 Economic Impact Aid (EducationCode Section 54028)

8630 Special Allosences8631 Apportionment for the Elementary

School Reading ProgramRecord amounts received under the BasicReading Act of 1965 (Education Codesections 54100 54180).

8632 Allowance for InstructionalTelevision

Record amounts received under EducationCode Section 41920 for participation in aprogram for instructional television estab-lished pursuant to Education Code sections51870 or 51871.

4811-3

8633 Apportionment for Special TeacherEmploymentRecord amounts received under Chapter106, Statutes of 1966 (Education Codesections 54480-54486) for the specialteacher employment program.

8634 Alloueste for Densonstrution Pro.yams in Reading and MathematicsRecord amounts received under Chapter106, Statutes of 1966 (Education Codesections 58600 -- 58608) for demonstrationprograms in intensive instruction in readingand mathematicsit afor low-achieving pup

8635 ApportionmeM for Instructional Mate-risk for 11441 Schools (Education CodeSection 60247)

8636 Apportionment for InstructionalMaterials (Kindergarten ThroughGrade Eight)Record state special allowances for instruc-

tional materials for pupils in kindergartenthrough grade eight (Education CodeSection 60242).

8 637 Child Nutrition ProgramRecord amounts received as a result ofimplementation of the Duffy-Moscone Actof 1970 (Education Code sections49510-49520). Also record amounts

received under the Child Nutrition Act of1974 (Education Code Section 49536).

8638 Vocseional Education for HandicappedStudentsState Iffatdsheg Funds

8639 OtherRecord any special allowances not listedelsewhere,including allowances under theBilingual Education Act of 1972 (Educa-tion Code sections 52100-52114); one-time grants for schools converting to acontinuous education program (Education

11-4

Code Section 37644); and state grantsmade to school districts under the Profes-

sional Development and Program Improve-ment Act of 1968 (Education Code Section44643).

8640 Apportionment for School FacilitiesRecord any amounts allowed for school housingaid for compensatory education purposes and fordistricts impacted by seasonal agricultural employ-

Aleut (Education Code sections 16210-16234).

Also record amounts allowed through the StateSchool Building Aid Fund. These funds shag bedeposited in the State School Building Fund of theschool district for school building purposes.

8650 Apportionments for Childmn's CentersRecord amounts allowed for dificiren's centers.School district fiscal control may find it advisableto compote monthly the earned income from thissource. Apportionment in advance is based upsestimated attendance. Adjustments at the end athe fiscal year are usually required (EducationCode Section 8382).

8670 TeX Relief Subventions

8671 Reimbursement for Income LostBecame of Business InventoryExemptionsRecord amounts received for loss of in-come because of business inventory exemp-

tions (Revenue and Taxation Code Section219).

8672 Reimbursement for Income Lost Be-cause of Home Owners' ExemptionsRecord amounts received for loss of in-come because of bane owners' exemptions(Revenue and Taxation Code Section 218).

8679 Other Tar Relief SubventionsRecord amounts received for loss of in-come because of exemptions ari motionpicture films and wine and brandy prod-

19

ucts (Revenue and Taxa Code sections988 and 992; Education Code Section,41052) and severance aid forreal property acquired for sta highwaypurposes (Education Code Sec 41960).

8680 "Miscellaneous Funds" (Education*Section 41604)See explanation on page 11-8.

8681 Royalties and Bomases

8684 Payments In Lieu of Taxes

8690 Other State Income

8760 County School Building AidRecord income received for payments requiredpursuant to School Building Aid laws (EducationCode sections 16196, 16202, 16204, and 2503).

8780 "Miscellaneous Funds" (Education CodeSection 41604)Sec explanation on pep 11.8.

8781 Royalties and Bonuses

8784 Payments in Lieu of Taxes

90 OtherRecord all other county funds received exceptfunds defined as "miscellaneous funds" by theCalifornia Administrative Code, Tide 5, Education,Section 41200. These are to be recorded inclassification 8780, "Miscellaneous Funds."

8691 State PreschoolRecord amounts received for preschooleducation (Education Code Sections 8256and 8327).

8692 Reimbursement for Mandated CostClaimsRecord in the year received amounts forreimbursements of costs of legislativelymandated programs (Revenue and TaxationCode Section 2231).

8 693 Deferred Maintenance Allowancefrom State

8699 Other State IncomeRecord all other state funds receivedexcept funds defined as "miscellaneousfunds" by the California AdministrativeCode, The 5, Education Code Section41200 which are to be recorded in classifi-cation 8680, "Miscellaneous

8700 County Income

Record in the appropriate subordinate classifications of thismajor classification all county funds received. Do notrecord federal funds distributed by the county. These are tobe recorded as federal income.

8750 Contract Services (County School ServiceFund only)Record income received from contracts betweenthe county superintendent of schools and othercounty agencies.

41/ 114

8800 Local Income

Record in the appropriate subordinate classifications in thismajor classification all income from local sources. Identifythe sources of income and account for the income receivedfrom each source.

All income received from tax sources is to be accounted ona cash basis. Credits to the various district tax incomeaccounts are made upon receipt of an apportionment noticefrom the county superintendent of schools indicating thattaxes have been deposited in the county treasury.

8810 District Taxes

50

8811 Secured Roll (Education Code sec-tions 4364, 1624, 2500 et seq..42202, and 42230 et seq.)

Record income from taxes levied on thesecured tax roll.

8812 Unsecured RollRecord income from taxes levied on theunsecured tax roll.

8813 Prior Years' TaxesRecord income from tax levies of prioryears. Include secured and unsecured taxreceipts from redemptions and tax sales.

5

8814 Secured Taxes - Voted IndebteerestLevies

Certain tax rates in excess of the statutoryrates are authorized in the Education Codefor restricted purposes and for specialfunds of the school district.

8815 Unsecuredlfrior Years' Tates -Voted ladebtedaess Levies

8820 City and County Tares

8821 City TaxesRecord income from taxes from an advalorem levy for school purposes upon thereal and personal property located in, andassessed by, a chartered city, which levy isauthorized or required by the city charter.

8822 County Taxes

Record income from taxes from an advalorem levy for school purposes upon thereal and personal property under the juris-diction of the county superintendent ofschools.

8840 Saks

8841 Sale of BondsRecord income from sale of bonds at parvalue. The amounts received from the saleof bonds at par value must be deposited inthe Building Fund of the district (Educa-tion Code Section 15146).

8842 Sale of Equipment and SuppliesRecord income from the sale of suppliesand equipment no longer needed by theschools. The money received is to beplaced to the credit of the fund fromwhich the o expenditure for thepurchese of personal property wasmade (Educe Code Section 39522).

8843 Sale of Land and ,BuildbrgsRecord income from the sale of land andbuildings. Such income must be used forcapital outlay or repaid to the state ifunder the State Aid Building Program(Education Code sections 39360- 39363).

11-6

8844 Foot, Service SalesRecord income from the sale of mesh andother food items. This income is wsuidlyrecorded in the Cafeteria Fund or Cafeteria

Account.

8845 Sak of Publications. Record income from the sale of publi-

cations.

8849 Other SalesReCord income received from all othersales, such as farm products and printedforms.

8850 Rentals and Leases

Record income for the use of school buildings orportions thereof, houses. and other properties ofthe district.

8860 leterestRecord income credited or prorated by the countyauditor for interest on deposits of school districtfunds with the county treasurer and interestearnings (Education Code Section 41015).

Money received as premiums and accrued interestat the time of sale of bonds must be deposited inthe Bond Interest and Redemption Fund (Educa-tion Code Section 15146).

8870 Fees and Contracts

8871 Adult Education

Record income received from studentsenrolled in classes for adults under Educa-

tion Code Section 52612.

8872 Nonresident StudentsRecord income received from parents orguardians for the total cost of educatingforeign residents in the schools of thedistrict (Education Code Section 48052).

514/114

8873 Children's Centers!

Record income received from parents,guardians, or welfare agencies as fees for the

instruction and'care of children in children'scenters (Education Code Section 8249).

8874 Sef-Inainme Contributions/PresektnuRecord income received by a self-insurancefund from other funds of the district forinsurance protection, necessary reserves.or deductibk amounts.

8875 Contract Services

Record income received from a school dis-trict for contract services rendered by onedistrict or the office of the county superin-tendent of schools.

Sec "Note" on page 111-I I.

8879 Other Fees and Contract Services

Record income received from all other feesand contract services.

8880 "Miscellaneous Funds" (Education CodeSection 41604)

See explanation on page 11.8.

8881 Royalties and Bonuses

8884 Payments in Lieu of Taxes

8890 OtherRecord all oche? fICOMO from local sources, such aslibrary finei, con*Iiitioire, gifts, practice teaching,and so forth, except fun& defined as "miscellaneousfunds" by the California Administrative Code, Title5, Education, Section 41200. These are to berecorded in classification 8880, "MiscellaneousFunds."

8900 Incoming Transfers

Record in the appropriate subordinate classes in this majmclass all income received for incoming transfers. Identifythe sources of tuition payments and account for the incomereceived from each source.

6/84

8920 Other TuitionRecord tuition payments received from the follow-ing sources:

Interdistrice contracts for general or specific in-structional services. including transportation fordesignated pupils (Education Code sections46600-46613).

Governing boards or authorities in other states forthe total cost of education of elementary or highschool pupils whose places of residence are in theother states (Education Code Section 48050). NoCalifornia state aid is apportioned for such

All other tuition payments not identified above.

8930 Interfunti TransfersRecord the amount of money involved in each ofthe following transfers between funds:

To the Child Development Fund from the Gen-eral Fund (Education Code Section 41013 andCalifornia Administrative Code, Title 5, Educa-tion, sections 15050-15052).

Between the General Fund and the Special ReserveFund (Education Code sections 42840-42843).

From any fund of the district to the Public SchoolBuilding Fund (Education Code Section 15746) orto the State School Building Fund (EducationCole Section 16095). .

To the General Fund or to the Special ReserveFund from the Bond Interest and RedemptionFund after all principal and interest payments havebeen made (Education Code sections 15234 and15235).

8940 Special Education Master Plan Tranitfersfrom Districts

8950 Incoming Transfers of Funds from GeneralFund to Deferred Maintenance Fund. (Edu-cation Code Sections 39618-19619.5)

8960, Special Education Master Plan Transfersfrom County Superintendents of Schools

52

1

11-7

8990 Other hircoaim TrwsufmRecord income recessed from funds of talliedreorganized school districts and any other incomefrom transfers not otherwise chisified.

Miscellaneous Funds

Education Code Section 41604 coven "miscel-laneous funds" under classifications 8480 (federal),8580 (federal and state), 8680 (state), 8780(county), and 8880 (local). Sources of fundsclassified as miscellaneous under this section are(1) royalties and bonuses; (2) payments in lieu oftaxes.

Royalties and Bonuses

Record the total amount of payments of all or aportion of the royalties and bonuses received fromthe operation of any law under the terms of anyagreement. For example, royalties on federal min-eral deposits are accounted under 8481, "Miscel-laneous Funds" (federal). Classifications by sourceare as follows:

8481 Federal8581 Federal and state8681 State8781 County8881 Local

Payments m Lieu of Taxes

Record the total of all payments made in lieu oftaxes and received by the county superintendent ofschools or school district. Examples are levies onaircraft, baled cotton, or federal housing; head-daytax on livestock; and license fees on trailer coaches.Classifications by source are as follows:

84848584868487848884

FederalFederal and stateStateCountyLocal

Abatement of Income

When part or all of the income of a schooldistrict or office of a county superintendent ofschools must be returned to the source from whichit is received or prorated to participating districts

for a specific project, the transaction shall beaccounted as an abatement of income. In otherwords, abatement of income is the cancellation ofa part or the whole of any specific receiptpreviously recorded. Such cancellations of pv i-ously recorded receipts usually result from taxrefunds, refunds of money received from state orfederal sources, refunds of monies previouslyreceived in error, or the distribution of moniesreceived for otherfhe accounting for suchtransactions in this er keeps*th income andexpenditures in true Renpective fld maintainsproper balance of the two\

Uniformity in accounting for abatements ofincome is required to seciticmparable fiscalrecords and mikes of..school . Accuracy inthe records requires proper use of a correctaccounting procedure for the elimination from the'fiscal records of those items representing cancella-tions of previous fiscal transactions or parts ofthem.

Accounting Procedure

Payments that represent cancellations or reduc-tions of receipts must be accounted as abatementsof income previously recorded by abating suchpayments to such income account, thereby elimi-nating any charge to an expenditure account. Suchpaynients must be accounted by abating theincome account for the original source during thefiscal year in which the payments are made,irrespective of the fiscal year in which the originalzreceipt was recorded, even though such paymentsmay in some cases exceed the actual income of thefiscal year in which the abatement is made andthus result in negative balances in the accounts, orentries in reports. Abatements of income shall berecorded as they occur and shall not be acciunu-lated until the end of the fiscal year.

Because payments that constitute abatement* ofincome are not expenditures, they are not subjectto appropriation control. However, any abatethentof income that constitutes a major reduCtion ofincome in comparison with estimated incomeshould be recognized as requiring a correspondingreduction in estimated income and reserves, orrequiring a reduction in actual appropriations.

53 6/64

The following kinds of transactions shall beaccounted as abatements of income:

1. Tax refunds2. Rental refunds3. Tuition rekfunds

a. To students, parents, or guardiansb. To other districts on account of over-

payments4. Refunds of income from federal sources5. Refunds of income from state sources6. Refunds of other monies received in error7. Distribution or proration of monies received

by a local operating agency to operatingdistricts.

Income

Because it is often difficult to distinguish be-tween receipts that should be treated as abate-ments of expenditure and those that should betreated as income, a list of income receipts ispresented also. The following receipts must beaccounted as income (income classifications areshown in parertheses):

I. Tuition (8920)a. Adult education tuition (8920)

2. Fees (8870)a. Teachers' and employees' examination

fees (8879)b. Certificate fees (8879)c.. Transcript fees (8879)

3. Rentals ( 8850)a. Civic Center (all charges) (8850)b. Classrooms (8850)c. Easement leases (8850)d. Houses (8850)e. Sites (8850)

4. Collections foil use of swimming pools,tennis courts, and the like (8879)

5. Library fines (8890)

6. Receipts from sale of junk or salvagematerial no longer needed (8842)

7. Contributions and gifts (8890)

8. Receipts from sale of courses of study,printed forms, and the like (8845)

9. Amounts received from forfeitures ofsurety or indemnity bonds because ofnoncompliance with contracts (8890)

10. Interest on deposits and investments(8860)

1 I. Receipts from sale of land' and buildings(except that receipts from the sale either ofa portion of a new site or of buildings orimprovements thereon shall be accounted.as abatements of expenditure) (8843)

11 Receipts from teacher-training. institutionsfor practice teaching services (8890)

13. Amounts received from mandated costclaims (8692)

Accounting for Certain Apportionments(Loans)

Certain apportionments that the State of Cali-fornia currently authcirizes to be made tofrom the State General Fund are loans and do tcbnstitute grants or subventions. Because suchapportionments are nonrevenue receipts, whichincrease a district's liabilities, they should not beaccounted for as income. These apportionmentsare advances made to eligible districts for thefollowing purposes:

1. To aid newly organized elementary school,high school, or unified school districts(Education Code Section 41360)

2. To provide emergency apportionments (loans)) to school districts as provided by Education

Code sections 41310 and 41320-41324

When such an apportionment has been made bythe Superintendent of Public Instruction, a statewarrant is issued by the State Treasurer for theentire amount. The law specifies that the countytreasurer receiving such a warrant shall deposit it tothe credit of the General Fund of the districtdesignated in the apportionment. The districtrecords should reflect the receipt of the credit.

Example:Date Accounts Debit credit

4.10.71 Cash in County Treasury $6,300Account Psyshie, State(Long-Term Debt) S6,300

To record credit received for a ken from the Stet* Gemmel Fund

54 11-9

The repayment of the loan will be automaticallyaccomplished by the withholding of half of theamount from regular apportionments being cred-ited to the district during each of the next twofiscal years. The practice of the State Controller isto make the withholdings over a period of fourmonthsFebruary, March, April, and May. Accord-ingly, during each of those months (in 1973 in theabove example), one-eighth of the total loan willbe subtracted from the amounts otherwise due thedistrict from the State School Fund in accordancewith regular apportionment calculations. Thismeans that the credit to the distfict funds an-nounced by the county superintendent will besmaller by the sane amount than the announce-ments by the State Superintendent of PublicInstruction would indicate. District records mustreflect this transaction in each of the monthsnamed in each of the two years following the yearof the loan so that the liability will be properlycleared and the proper State School Fund appor-tionments credited. In the above example of aloan, the entry to be made by the district andrepeated seven times in the respective months is asfollows:

Date Accounts

2.20-72 Account Payable, StateBasic and Equalization Aid

Debit Credit

$670

$670

To record the withholding by the state of one-eghth of theamount of the longterm loan received 4.10.71

11 -10

Any statement of financial condition preparedfrom the district records during or at the dose ofthe fiscal year will show, if the foregoing proce-dures are used, the proper amount of liability tothe state. This accounting procedure is indicatedby the instructions that accompany the AnnualReport of Current Liabilities, Form J-43. Theproper recording by the district of amounts with-held by the state is also included in the specificaudit instructions to accountants conductingannual audits.

The repayment of a loan under Education Codesections 41320-41324 is done in the same man-ner, except that the principal repayment must beaccomplished over not more than a five-year period(Education Code Section 41323).

The interest and principal payment due annuallyon this emergency loan will be withheld from theschool district's regular apportionments. However,the district must record the amount due forclassification 5800, Other Services and OperatingExpenditures.

All loans; e.g., state emergency apportionments(loans), loans from a county board of supervisors,tax anticipation notes, and transfers (loans) fromspecial or restricted funds of the district(Education Code Section 42603) should berecorded in the same basic manner as described inthis section.

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Part 11$

Expenditures

The Education Code limits school district expen-ditures to the amounts appropriated for the severalmajor expenditure classes by the adoption andapproval of the school district budget or bysubsequent intrabudget transfer. Because of thisbudget or appropriation control of expenditures,the budget and all documents dealing with appro-priations must be prepared accoiding to the sameclassification plan as that employed in the account-ing of expenditures. Similarly, financial reports forlocal use as well as those prepared for county,state, or federal use should follow the sameclassification plan in order that their reliability forcomparative purposes is dot hnpahed.

Ai A basic classification by object is the most111. suitable instrument for the classification of expen-

ditures within a specified "program." Object classi-fications are for the most part self- explanatory,such as "teachers' salaries" or "custodians' *s-ties." The purpose or "function" that the employeeserves is covered by the program designation. Thenumbering system used is adaptable for use withmanual systems and with data processing equip-ment. The system is designed to be used either inits minimum required form or in expanded form toallow for as many subaccounts as desited.

County auditors and county superintendents ofschools who maintain detailed records of thefinancial transactions of school districts for budgetcontrol of expenditures or for any other purposeare required to use this manual as a guide.

Districts should identify the origin of eachschool district eXpenditure by designating theappropriate program and object classifications onthe orders or requisitions, commonly called war-rants or warrant registers. The officials of theschool district who have direct knowledge of thenature and purpose of each expenditure shouldmake decisions regarding the object classificationsto be used for each expenditure at the time that

VS4

conunitments are made. The account or accountsto be charged should be selected when goods orservices are ordered or when certificated or classi-fied employees are assigned or reassigned.

Insofar as it is feasible, notices of employment,copies of contracts, and other schod districtdocuments relating to expenditures or to commit-ments that will become expenditures should bearthe designation of the object for review andapproval of county superintendents of schools.This procedure permits any questions concerningthe classification of expenditutes to be settledpromptly. One decision tegrading object classifica-tions can thus serve for the several disbursementsto be made at future dates, such as monthly salarypayments. Furthermore, this procedure is neces-sary if the encumbrance plan of accounting isemployed by either the school district or thecounty superintendent of schools.

Whether or not object classifications are shownon commitment documents, such as notices ofemployment and copies of contracts, all schooldistrict orders should show the object classifica-tions applicable to such disbursement A part ofthe examination and approval of such orders bythe county superintendent of schools should con-sist of making sure that the object classificationsare correctly designated. County superintendentsof schools should serve as coordinating officers toensure that all school district officials understandand apply uniformly the definitions and instruc-tions contained in this manual. Where necessary,county superintendents should consult school dis-trict officials regarding each seemingly incorrectdesignation of the expenditure classification andadvise the school district of any changes made bythe office of the county superintendent.

County superintendents of schools, when draw-ing requisitions on the funds of school districts inthose relatively infrequent instances in which they

01_1

are authorized or required by law to initiate thedisbursements, should designate the object classifi-cations applying to such payments and inform the'district of the date, payee, purpose, amount, andobject classifications of each requisition so drawn.County superintendents should also notify the

' school district of the date, purpose, amount, andobject classifications of any amount withdrawnfrom the funds of the school district other than bydistrict order or county superintendent's requisi-tion and of the amounts withheld from apportion-ments of state funds that are to be treated asexpenditures, such as the amount withheld fordistrict repayments of school building apportion-ments.

The object classifications should be designatedon every warrant or warrant register so that countysuperintendents of schools may maintain theaccounting records of expenditures' necessary forbudget control of expenditures and for annualreport purposes.

The instructions in this part of the manual areapplicable to the budgeting, accounting, andreporting of the General Fund and of all specialfunds of every school district. The designation ofthe object classifications applicable to any partic-ular expenditure shall not be understood to meanthat such expenditure represents an expenditure ofthe General Fund or of any particular special fund.The selection of the fund for any particularexpenditure must be made in accordance with theprovisions of law; and if two or more fundsmay legally be employed, the determination of aparticular fund must be made by action of thegoverning board of the school district or of itsadministrators.

The instructions in this part of the manualprovide for the uniform identification and classifi-cation of all expenditures of school districts and inthe County School Service Fund fiscal operations.They should be employed in the day-by-dayaccounting of expenditures during a fiscal year, inthe preparation of the budgets of the CountySchool Service Fund and school districts prior to,or at the beginning of, the fiscal year, and in thepreparation of periodic financial reports, including

iCounty superintendents of schools are required to maintaincontrols of school district expenditures by objects under the pro-visions of Fducation ('tide sections 41014 and 42600.

111--2

annual financial reports at or after the close of thefiscal year. They should be used as guides in theaccounting of the district expenditures by allofficials of a district who have fiscal responsibilitiesand by county superintendents of schools andmembers of their staffs.

The school district and County School ServiceFund "Annual Financial and Budget Report"furnished by the Superintendent of Public Instruc-tion contemplates the use of the accrual basis forthe accounting of expenditures and use of a partialaccrual basis for the accounting of income of thefunds of school districts and the County SchoolService Fund, except for the Bond Interest andRedemption Fund. The accounting and reportingof school district Bond Interest and Redemptionfunds either on the cash basis 5r the accrual basis,as determined by each county auditor, is accept-able to the Superintendent of Public Instruction.

GENERAL INSTRUCTIONS

School districts and county superintendents ofschools are required to report expenditures accord-ing to the object classification plan presented inthis part of the manull

School districts ana county superintendents ofschools may establish subclassifications of requiredobject classifications to capture additional data fortheir own internal reporting requirements.

Objects of expenditure represent all the things,whether goods or services, that may be purchased.Examples are salaries, supplies, and equipment.

Objects of expenditure may be Classified inmany different ways. They may be grouped undersummary headings, or they may be presented ingreat detail. Grouping under summary headingsreduces volumeat the expense of clarity. Greaterdetail improves understanding but is costly toproduce. In actual practice, considerable detail isused in developing budgets and recording expendi-tures; then, for reporting purposes, this detail issummarized under more general classificationheadings.

All objects of expenditures listed in Part 111,Expenditures, must be maintained by all schooldistricts and county superintendents of schools intheir day-to-day accounting of expenditures duringa fiscal year. The use of these objects will facilitatethe preparation of budgets and the variods finan-

57 6/84

cial reports requested by federal, state, county, andlocal agencies.

Minimum budgetary control of school districts'accounts by offices of county superintendents ofschools must be maintained on the following majorobject of expenditure classifications:

10002000300040005000

600070007900

Certificated SalariesClassified Personnel SalariesEmployee BenefitsBooks and SuppliesServices and Other Operating Expen-ditures

Capital OutlayOther OutgoAppropriation for Con-

tingencies

SECTION AObjects of Expenditure Classifications,

Their Content, and InstructionsRegarding Their Use

1000 Certificated SalariesCertificated salaries are salaries for services that require acredential or permit issued by the Commission for TeacherPreparation and Licensing.

Salaries paid to an employee on leave of absence shallcontinue to be charged in the same manner and to the sameaccount classification as was applicable while the employeewas in active service for the district.

1100 Teachers' SalariesRecord the full-time, part-time, and proratedportions of salaries for all certificated personnelemployed to teach the pupils of the district orpupils in schools maintained by a county superin-tendent of schools. Include salaries for teachersof children in homes or hospitals, all special edu-cation resource specialists and teachers, substi-tute teachers, and instructional television teachers

The separate recording of teachers' salaries is

required by Education Code Section 41011 and islimited to salaries of certificated employees paid toteach the pupils of the district or pupils in schoolsmaintained by a county superintendent.

The following comments, interpretations, and defi-nitions are included to guide school officials in

6/144-78869

determining whether the total salary or a portionof the salary should be charged to classification1100, Teachers' Salaries.

The total salary is recorded in classification 1100,Teachers' Salaries, under the following conditions:

The teacher is an employee of the district/office ofthe county superintendent in a position requiringcertification qualifications. The teacher's dutiesrequire him to teach pupils of the district for atleast one full instructional period on each schoolday for which he is employed, and he is assigned noduties other than those that are connected with, orare extensions of, classroom teaching. Such activi-ties are limited to the following:

1. Preparation for and evaluation of classroomwork

2. Extracurricular activities that arise out ofclassroom work and are an extension of it(e.g., class or club sponsorship, supervision atschool functions, or Chairing of an academicdepartment)

3. Management and instruction in a study hall4. Duties that are ordinarily assigned to certifi-

cated personnel in connection with the cus-tody and control of pupils at recess, lunchtime, after school, or at other times

The salary must be prorated under the followingconditions:

If a certificated employee teaches at least oneinstructional period each day that he is employedto teach and is also assigned other duties neither inconnection with, nor extensions of, classroomteaching; his salary must be prorated and recordedin classification 1100, Teachers' Salaries, and in theother classifications that provide for recording theexpenditures for the other assignment. The amountrecorded in classification 1100, Teachers' Salaries,is the product of the employee's complete salaryand the fraction of the full-time school day of theemployee spent as a classroom teacher in theperformance of duties that are in connection with,or an extension of, classroom teaching, as limitedherein. The remaining portion is then charged tothe classification in which expenditures for theother assignment are recorded. It should be under-stood that some of the other assignments maypertain to work outside the field of teaching; and ifa teacher performs such assignments, it will be

58 111-3

necessary to prorate a portion of the salary to

subordinate classifications other than 1100,

TeaChers'Saktries.

The term other assignments includes, but is notlimited to, assignments usually and specificallyassigned to certificated persons employed in thefollowing types of positions:

I General supervisors, coordinators, directors,specialists, consultants, supervisors of special

subjects or grades, and certificated assistants

2. Principals, vice-principals, assistant princi-

pals, dear's, and assistant deans in individual

schools

3. Librarians, assistant librarians, audiovisual

personnel, counselors, nurses, psychologists,psychometrists, audiornetrists, and guidance

and attendance personnel

The term other assignments also includes, but isnot limited to, assignments usually and specificallyassigned to persons in the classified service em-ployed as school bus driver, custodian, secretary tothe governing board, and supervisor in transpor-tation.

1200 SchoolAdministrators' SalariesRecord the full-time, part-time, and prorated por-

tions of salaries of prii.cipals, vice-principals,

administrative deans in individual schools, andother personnel performing similar duties.

1 300 Supervisors' SalariesRecord the full-time, part-time, and prorated por-tions of salaries for certificated personnel engaged

in instructional supervision, including generalsupervisors, coordinators, directors, consultants.and supervisors of special subjects or grades and

their certificated assistants.

NOTE: The term supervision is used to designatethose activities having as their purpose the actualimprovement of instruction under the direction ofsupervisors and assistants. Such activities include (1)personal conferences with teachers on instructionalproblems; (2) classroom visitation; (3) group confer-ences with teachers; and (4) demonstration teaching.

1 400 Librarians' Sa es

Record the full-time, part-time, and prorated por-tions of salaries of all certificated personnel per-forming services of a librarian.

111-4

1500 Guidance, Welfare, and Attendance SalariesRecord the full-time, part-time, and prorated por-tions of salaries of social workers and all certifi-

cated personnel doing pupil personnel work;psychologists and psychometrists; and counselors.

1600 Physical and Mental Health SalariesRecord the full-time, part-time, and prorated por-tions of salaries in payment of health servicesrendered by physicians, oculists, dentists, and

dental hygienists, nurses, optometrists, school

audiometrists, psychiatrists, otologists, chirop-

odists, and such other personnel as are authorizedin the field of physical and mental health and whoare on the payroll of the school district.

1300 Superintendents' SalariesRecord the full-time, part-time, and prorated por-tions of salaries of superintendents and of deputy,

associate, area, and assistant superintendents in

districts and offices of county superintendents ofschools (Education Code sections 35028, 35030,

44065, 44066, 44069, and 35029).

1800 Cerifficated Salaries of Administrative Person-nelRecord the full-time, part-time, and prorated por-tions of salaries of certificated noninstructionalpersonnel. including administrative assistants and

rectors of administrative activities such as pupil

services or special projects.

1900 Other Certificated SalariesRecord full-time, part-time, and prorated portionsof salaries for all certificated personnel that do notfall within one of the categories specified (e.g.,special education and/ or other program special-ist, certificated civic center employee, resourceteacher not performing duties as classroom teacher,

and certificated noon playground supervisor).

2000 Classified Personnel SalariesClassified salaries are salaries for services that do not requirea credential or permit issued by the Commission forTeacher Preparation and Licensing.

Salaries paid to an employee on leave of absence shallcontinue to be charged in the same manner and to the same

59 6/14

account classification as was applicable while the employeewas in active service for the district.

2103 Salaries of Instructional Aides for DirectTeaching AssistanceRecord total salaries paid to instructional sideswho are required to perform any portion of theirduties under the supervision of a classroom teacheror a special education resource specialist teacher(Education Code Section 41011).

2200 Classified Salaries of Administrative Person-nel

Include governing board members and personnelcommission members. Record the full-time, part-time, and prorated portions of salaries of super-visory personnel who are business managers, con-trollers. directors, chief accountants, supervisors,purchasing agents, assistant superintendents, andsuperintendents. (For assistant superintendents andsuperintendents, see Fducation Code sections 35028,35030, 44065, 44066, 44069, and 35029).

2300 Clerical and Other Office SalariesRecord the full-time, part-time, and proratedportions of salaries paid to clerks, secretaries,accountants. bookkeepers. machine and compu-ter operators, and others in similar positions.

24(X) Maintenance and Operations SalariesRecord the full-time, part-time, and prorated por-tions of salaries paid to maintenance and operationpersonnel as follows:

Maintenance: carpenters, painters, plumbers, elec-tricians, and other similar positions.

Operations: custodians, matrons. general utilityworkers. fire fighters, dairy workers, guards, gar-deners. elevator operators, warehouse workers.deliicry personnel, truck drivers, and other sim-ilar positions.

2500 Food Services SalariesRecord full-time, part-time, and prorated portionsof salaries of nutritionists. cookS, helpers, and allother food service personnel except those engagedin the management of the food services program on

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a districtwide basis. The salary of a classifieddirector of food services at a single site is recordedunder object classification 2500.

The salary of a classified director of food services,if districtwide, is recorded under object classifica-tion 2200, Classtfied Salaries of AdministrativePersonnel.

The salary of a certificated director of food ser-vices, if districtwide, is recorded under objectclassification 1800. Certificated Salaries of Admi-nistrative Personnel

2600 Transportation SalariesRecord the full-time, part-time, and prorated por-tions of salaries pitsid to bus drivers, mechanics.field coordinators, gasoline pump attendants, andall other personnel whose assignments are relatedto the transportation of student.

2900 Other Classified SalariesRecord full-time, part-time, and prorated portionsof salaries not identifiable with object classifica-tions 2100 through 2600 (e.g., noon supervisionpersonnel, students, community aides, health aides,library aides, and building inspectors).

3000 Employee Benefits

Record employers' contributions to retirement plans andhealth and welfare benefits for employees, their depen-dents. retired employees, and board members.

31()0 State Teachers' Retirentenf System3110 STRSTetkhers3120 STRSOther Than Teachers

320() Public Employees' Retirement System3210 PERSlbstructional Aides3220 PERSOther Than InstructionalAides

3300 Social Security (Old Age, Survivors, Disabil-ity, and Health Insurance)3310 Social Security Instructional Aides3320 Social SecurityOther Than Instruc-

tional Aides

3400 Health and Welfare Benefits

3410 Health and Welfare Benefits forTeachers and instructional Aides

6oHi 5

3420 Health and Welfare Benefits for AllOther Employees

3500 State Unemployment Insurance

3510 Unemployment insurance for Teachersand Instructional Aides

3520 Unemployment Insurance for AllOther Employees

3600 Workers' Compensation Insurance

3610 Workers' Compensation Insurancefor Teachers and Instructional Aides

3620 Workers' Compensation Insurancefor All Oilier Employees

3900 Other Bewfits

4000 Books and SuppliesRecord expenditures for books and supplies, includingcost of sales use tax, freight, and handling charges.

4100 Textbooks (In accordance with state re-quirements)Record under the appropriate subclassificationthe total amount expended each year on (1) basictextbooks; or (2) supplementary textbooks; in-clude teachers' manuals and teachers' editions.Definitions to be employed in classifying theexpenditures follow:

ElementaryFor elementary school. including grades seven and

eight of junior high school, "state textbooks" arethose textbooks adopted by the State Board ofEducation for use in elementary schools.

A "basic textbook" is a volume intended for use bypupils as a principal source of study material forthe completion of a subject or course. In style,organization, and content it should meet the basicrequirements of the subject course for which it isintended.

A "supplementary textbook" is a volume thatcovers part or all of a subject or course but is notintended for use as a basic textbook. A supplemen-tary textbook is intended to supply information inaddition to, or in extension of, information pre-sented in the regular or basic textbook. Thegoverning board may purchase and adopt supple-mentary textbooks in addition to those free text-

III -6

books supplied to the district. "Supplementarytextbooks" shall be distinguished from reference orlibrary books by the fact that they are supplied inquantities permitting use by a group or the entire

class.

Teachers' manuals and teacher editions relate tothe specific basic or supplementary textbook in-tended for teachers' use rather than for pupils'use.

High SchoolFor high school, including grades nine throughtwelve, "textbooks" (as defined in the CaliforniaAdministrative Code, Title 5, Education, Section9540 (al) ) that are adopted for use as high schooltextbooks by the governing board of the districtunder provisions of Education Code Section 60400shall be recorded in classification 4100, Textbooks.

Education Code Secfion 60400 provides that onlytextbooks produced by publishers who have filed a

bond with the State Board of Education may beadopted by the governing board of a school districtfor use as textbooks in the schools of the district.

School officials should distinguish textbooks onthe basis of adoptions made by the governing board

of the district.

Teachers' manuals and teacher editions relate tothe specific basic or supplementary textbook in-tended for teachers' use rather than for pupils' use.

4110 Textbooks (General Purpose Funds)

Record regular purchases of textbooks.

4140 Textbooks (Education Code Section60242, Kindergarten Through GradeEight Only)Record purchases of textbooks with fundsapportioned by the state for instructionalmaterials purposes, under Education Code

Section 60242.

4150 Textbooks (Education Code ,Section60247)

4200 Books Other Than Textbooks

61

Record under the appropriate subclassificationexpenditures for (I) books that have not beenadopted by the proper authority for use as text-books; (2) books such as reference books that are

6/84

availabk for general use by students even thoughsuch books may be used solely in the classroom;and (3) all other books used for reference purposessupplied in quantities too small for group use. Inaccordance with state requirements, library booksare included.

Expenditures for periodicals. magazines, work-books, test materials, drill books, or exercise padsand Department of Education bulletins and the likeare recorded under object classification 4300,instructional Materiab and Supplies.

Expenditures for school library books for a newschool library or for material expansion are re-corded under object classification 6300, Books andMedia far New School LagWO or Major Expan-sion of School Libel:rift

4210 Books Other Than Textbooks (Gen-eral Purpose Funds)Record regular purchases of books otherthan textbooks.

4240 Books Other Than Textbooks (Edu-cation Code Section 60242)Record purchases of books other thanstate-adopted textbooks with funds appor-tioned by the state for instructional mate-rials purposes under Education Code Sec-tion 60242.

4250 Books Other Than Textbooks (Edu-cation Code Section 60247)

4300 Instructional Materials and SuppliesRecord under the appropriate subclassificationexpenditures for all materials and supplies to beused by pupils, teachers, and other personnel inconnection with the instructional program. Includeall tests, periodicals, magazines, workbooks, instru-tional media materials, audiovisual materials.and any other supplies used in the classroom orlibrary. Expenditures for rentals of materials arerecorded under object classification 5600 -Renick,Leases, and Repairs. Exclude any items of equip-ment as defined in Part IV.

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4310 instructional Materials and Supplies(General Purpose Funds)

Record regular purchases of instructionalmaterials and supplies.

4340 Instructional Materials (EducationCode Section 60242)

Record purchases of instructional materialswith funds apportioned by the state forinstructional materials purposes under Edu-cation Code Section 60242.

4350 Instructional MAIM& (Education CodeSection 60247)

4500 Other SuppliesRecord expenditures for supplies used in supportservices and auxiliary programs (except as definedin object classifications 4600 and 4700), such ascustodial, gardening, and maintenance supplies;supplies for operation. repair. and upkeep ofequipii)cm. buildings and grounds, and vehicles;and medical and office supplies.

4600 Pupil Transports:Ulan SuppliesRecord expenditures for fuel, oil, tires, parts forrepair. small 001S, and other similar items.

4700 Food Services SuppliesRecord under the appropriate subclassificationexpenditures for all food and supplies used infood service programs or in a particular programor project.

4710 FoodRecord expenditures other than for instruc-tional purposes for food used in food ser-vices programs: i.e., breakfast, snacks.lunch, and other similar items.Expenditures for food used for instruc-tion in a regular classroom (e.g., in a

cooking class) are recorded under objectclassification 4300. instructional Materialsand Supplies.

4790 Other Food Services Supplies

5000 Services and Other Operating ExpendituresRecord expenditures for services, rents, leases, mainte-nance contracts, dues. travel, insurance, utilities. legal.and other operating expenditures. Expenditures may heauthorized by contracrs. agreements, purchase orders,and so forth.

62 111-7

5100 Personal Services of Instructional Consul-tants, Lecturers, and OthersRecord under the appropriate subclassificationexpenditures for instructional. personal services.

5110 Personal Services (General PurposeFund)Record expenditures for personal servicesof consultants, lecturers, or others whoprovide direct assistance to teachers, pu-pils, or the curriculum or health pro-grams. Include the services of organizationssuch as the Western Association of Schoolsand Colleges (WASC). Service providedunder interdistrict agreements betweenschool districts and/or county offices ofeducation shall be recorded under objectclassification 5700. Inter trice and Non-public School Services.

5140 Personal Services (Education CodeSection 60242)Record expenditures for personal servicesof consultants to assist in the use of state-adopted instructional materials, with fundsapportioned by the state for instructionalmaterials purposes under Education CodeSection 60242. Record expenditures fornoninstructional personal services underobject classification 5800.

5200 Travel and ConferencesRecord actual and necessary expenditures incurredby and or for employees and other district repre-sentatives for travel and conferences (Education('ode sections 35044 and 44032).

5300 Dues and MembershipsRecord the membership fee of any district orschool in any society, association, or organiza-tion as authorized by Education Code Section35172.

Record the membership fee of the governinghoard in any organization as authorized by Edu-cation Code Section 35172.

5400 InsuranceRecord under the appropriate subclassification

III- ft

expenditures for all forms of insurances otherthan employee benefits.

5440 Pupil InsuranceRecord expenditures for accidental deathinsurance and medical and hospital insur-ance for pupils.

5450 Other InsuranceRecord expenditures for all forms ofinsurance, other than pupil insurance,such as fire and theft liability and fidelitybond premiums.

5500 Utilities and Housekeeping ServicesRecord expenditures for water, fuel. light power,telephone, waste disposal, laundry and dryclean-ing, and so forth. Include contracts for theseservices.

5600 Rentals, Le&ces, and RepairsRecord expenditures for rentals, leases (withoutoption to purchase), repairs or maintenance byoutside vendors of sites, buildings, and equipment.

Expenditures for leases (with option to purchase)should be recorded under the appropriate CapitalOutlay object of classification 6000.

5700 Interdistria and Nonpublic School ServicesRecord expenditures to nonpublic nonsectarianschools for the education of exceptional childrenfor whom no appropriate services are available orcan be provided. (These expenditures shall beexcluded from the current cost of education forthe teachers' salary computation.)lntcrdistrict and nonpublic school services arc toinclude all interdistrict, county superintendent orcooperative projects (except for joint powersagreements PPAs1 ), whether instructional ornoninstructional. Payment is not necessarily anabatement for county superintendents' offices.

Record expenditures for services such as health,administration, instruction, or transportation ser-vices provided to the pupils of one district byanotter district. (See "Note" page 111-11.)

Recad expenditures for regionalized services, inexcess of those required by law. provided byanother district or county superintendent of schools

6/84

its pursuant to an approved local plan for SpecialEducation Master Plan. (These expenditures shaltbe excluded from the current cost of educationfor teachers' salary computation.)

Expenditures for excess costs and/or decifits inthe Special Education Master Plan paid to pro-vider districts should be charged to object classifi-cation 7210. 7270, or 7280. (See special instructionsfor the Special Education Master Plan. bginningon page 111-22.)

5800 Other Services and Operating ExpendituresRecord expenditures for all advertising, includingadvertising for items such as bond sales, contractbidding, and personnel vacancies.

Record expenditures for judgments. penalties,legal advice, attorneys, hearing officers, elections.audits, and other similar costs.

Record expenditures for professional and per-sonal services related to noninstructional pro-grams.

Record expenditures for bus transportation ser-vices, audiovisual and library services, and ser-vices not otherwise designated. Expenditures forservices provided the pupils of one district byanother district are recorded under object classi-fication 5700. Inter&strict and Nonpublic SchoolServices.

Record assessments for other than capital im-provements. including state assessment for non-use of school sites.

Record expenditures for surveys and appraisalsof sites which are not purchased. Expendituresfor surveys, appraisals, and assessments in con-nection with site purchases and/or improvementsare recorded under object classification 6100,Sites and Improvement of Sites.

Record cspenditures not otherwise designated.such as payments of interest on loans repaidwithin the fiscal year; payments for damages topersonal property; expenditures for ti rprints,physical examinations, and X-rays re red foremployment: and other similar items.

5900 Support Costs (To Adult Fund Only)this object classification is used only to recordtransfers for interprogram debits and credits for

direct and indirect support costs within funds orbetween funds. This is not a budgetary classifica-tion for a fund, unless support is renderedbetween funds. (Sec discussion on support ser-vices accounting io. Part tit, Section 13.)

6000 Capital OutlayRecord expenditures for sites, buildings, books,and equipment, including leases with option topurchase.

6100 Sites and Improvement of SitesRecord expenditures for each of the following:

Acquisition of land and additions to old sites andadjacent mays. Include incidental expenditures inconnection with the acquisition of sites, suds asappraisal fees, search and. title insurance, surreys,and condemnation proceedings and fees. If a site isnot purchased after the appraisal or survey, recordthe expenditure in classification 5800, Other Ser-vices and Operating Expenditures. Include demo-lition costs for removal of o;r1 buildings on newlyacquired sites.

Improvement of new and old sites and adfacent*sr" include such work as grading, landscaping,seeding, and planting shrubs and trees; constructing

new sidewalks, roadways, retaining walls, sewers,and storm drains; installing hydrants; treating soiland surfacing athletic fields and tennis courts forthe first time; furnishing and installing, for the firsttime, fixed playground apparatus, flagpoles, gate-

ways, fences, and underground storage tanks thatare not parts of building service systems; and doing

demolition work in connection with improvementof sites.

Payment of special assessments. Include assess-

ments against the school district for capital improve-

ments such as streets, curbs, sewers, drains, andpedestrian tunnels whether on or off schoolproperty.

6200 Buildings and Improvement of BuildingsRecord costs of construction or purchase of newbuildings and additions and replacement of obso-lete buildings, including advertising; architecturaland engineering fees; blueprinting; inspection ser-vice (departmental or contract); tests and examina-

6/84

64111-9

tions; demolition work in connection with con-struction anew buildings; installation of plumbing;installation of electrical, sprinkling, or warningdevices; installation of heating and ventilatingfixtures, attachments, and built-hi fixtures; andother expenditures directly related to the construc-tion or acquisition of buildings.

6300 Books and Media for New School Librariesor Major Expansion of School LibrariesRecord expenditures for library books and mate-rials for new and expended libraries.

6400 EquipmentRecord expenditures for initial and additionalitems of equipment, such as furniture, vehicles,machinery, motion picture film, videotape, andfurnishings that are not integral parts of thebuildings or building system. Equipment is definedin Part IV of this manual.Piece-for-piece replacements of equipment arerecorded under object classification 6500. Equip-ment Replacement.

Initial additional built-in fixtures that are anintegral part of the building or building servicesystem are recorded under object classification6200, Buildings awed Improvement of Buildlisp.

6500 Equipment ReplacementRecord expenditures for equipment as defined inPart IV. replaced on a piece-for-piece basis.

Note

A district may use day labor or force account withinthe limits of the law (Education Code Section 39649) toimprove new or old sites, construct or improve buildings,and fabricate equipment. The expenditures for such daylabor or force account, including materials, shall be adirect charge to the Facilities program. Such expendi-tures may include salaries of maintenance personnel(object classification 2400,11! and OperationsSaltvies), fringe benefits (object classification 3000, Em-ployee Benefits), and necessary materials and supplies(object classification 4500, Other Stipples).

7000 Other Outgo

7100 Debt ServiceDebt service consists of expenditures for the

retirement of debt and for interest on debt, except

111-10

principal and interest on current loans (moneyborrowed and repaid during the same fiscal- year).

7110 Annual Repayment on Account ofPublic School Building AppOrtion-MCW

7120 Annual Repayment on Account ofState School Building Apportion-ment

7130 Bond Redemption

7140 Bond Interest and Other ServiceCharges

Record expenditures for bond interest andbond and coupon service fees.

7150 Repayment of State School BuildingFund Aid by Wanwnt to the StateTreasurer Out of Proceeds from Saksof Bonds (Education Code Section16058)

7160 Payments to Original District forAcquisition of PropertyRecord expenditures to cover the liabilityof a "newly organized district" to the orig-inal district for its proportionate share ofthe bonded indebtedness of the originaldistrict (Education Code Section 4147).

7190 Other Payments

7200 Outgoing Tuition7220 Tuition for Instruction Under Imer-

district Attendance AgreementsRecord expenditures for tuition underinterdistrict attendance agreements incurredas a result of a district realizing a reduc-tion of 25 percent or more PL 81-874funds if the average daily attendance ofpupils residing within the district werecredited to the district of attendance (Edu-cation Code Section 46616(b)).

7250 Tuition for Regional OccupationalCenters or Provanu (CurrentExpense)Record tuition paid (for current expenseonly) to those regional occupational cen-ters or programs operated under a joint

65 6/14

powers agreemoirei.4See object classifica-tion 7290, Mass, for regionaloccupational centers or programs operatedby other school districts.)

7260 Tuition for Regional OccupationalCenters or Programs (Capital Outlity )Record tuition paid (for capital outlayexpense only) to regional occupationalcenters or programs operated by otherschool districts or county superintendentsof schools; and regional occupational an-tens operated under a joint powers agree-ment.

7270 Tuition Paid to School Districts forPayment of Special Ethication Mas-ter Plan Excess Costs and/or Mlicits

7280 Talkies, Paid to County Superinten-dents of Schools for Payne* of Spe-cial Education Master Plan ExcessCosts and/or Dtlicks

7290 Other TuitionRecord tuition paid (for current expenseonly) to those regional occupational cen-ters or programs operated by other schooldistricts not under a joint powers agree-ment. Also record tuition not otherwiseidentified.

Note

Interdistrict payments for specific services provided byone school district for another, such as health, adminis-tration, instruction, or transportation services, excludingpayments for Special Education Master Plan excess costsand deficits, should be charged to object classification5700. Interdistrict and Notqmsbfic School Services. Vihcnsuch an interdistrict payment is received, it must beaccounted for and recorded on any financial reports ofthe district receiving the payment as an abatement of theexpenditure for such service.

Example:

Two school districts contract with each other forpupil transportation services. The following procedureis used in reporting such transactions:

District A, which receives pupil transportation ser-evices, charges object classification 5700. Imilertistrici

6/ $4

and Nospothlic School Services, and the Pupil Trans-portation program.

District 8, which performs the services, recordsincome (reimbursement from district A) as an abate-ment to the appropriate object of expenditure for suchservices and thereby reduces the expenditure chargedto the Pupil Transportation program. (Objects ofexpenditure abated for such income may include clas-sification 2600 for salaries, appropriate subclassifica-tions of the 3000 series for employee benefits. classifi-cation 4600 for supplies, classification 6400 for newequipment, classificatiti 6500 for equipment replace-ment, and any other classification for which costs areincurred in providing the service.)

if the actual expenditures for abatement purposes can-not be specifically identified, the total income receivedshall be isr.c4.16zed on a reasonable basis to object classi-fications 2000 3000, 4000, and 6000 accounts, as appro-priate.

7300 Interfered TransfersRecord the following transfers:

7310 From the amend Fund to the ChildDevelopment Fund

7320 Between the General Fund and theSpecial Reserve Fund (EducationCode rctions 42840-42843)

7330 To the Public School Building Fundor to the State School Building Fundfrom All Other Funds of the District(Education Code sections 15746 and16095)

Record transfers of any monies of thedistrict that are required to be expendedfor the project for which such apportion-ment was made.

66

7340 From the Road Interest and Redemp-tion Fund to the General FundRecord transfers of monies from the Bondinterest and Redemption Fund, after allprincipal and interest payments have beenmade, to the General Fund or to theSpecial Res'rve Fund (Education Codesections 15234-15235).

7350 From the \ General Fund to theDeferred latemance Fund. (Educa-tion Code Sections 39618-39619.5)

7360 From the General Fermi to the Cafete-ria Fund/Account for the Meals forNeedy Pagrils Program.

7390 Other Authorised Interfund Transfers

7400 Other Transfers

7410 Transfers front Funds of a Lapsed orReorganised School District to AnotherSchool District (Education Code Sec-tion 35724)

7440 Transfers to School Districts for Spe-cial Education Master Phut

7460 Transfer to County Superintendentsfor Special Education Master Plan

Note

See special instructions for Special Education MasterPlan, beginning on page 111-22.

7490 All Other Transfers

7900 Appropriation for Contingencies (formerlyUndistributed Reserve)Appropriation for contingencies is that portion ofthe current fiscal year's appropriation that is notdesignated for any specific purpose but is heldsubject to the intrabudget transfer; that is, transferto other specific appropriations as needed duringthe fiscal year. No expenditure shall ever berecorded under this classification; it is an appropri-ation classification only.

SECTION B

Direct Costs, Direct Support Costs,and Indirect Cost Distribution

The distribution of direct costs to all programsand the subsequent distribution of direct supportand indirect costs provides the means for assessingthe fiscal impact of operating all programs. Thiskind of cost identification is critical to the develop-ment of a meaningful management informationsystem.

Methods of allocation of direct costs and distri-bution of direct support charges and indirectcharges are presented herein for determination of

total program costs. Charges which are used bymultiple programs, such as data processing, dupli-cating, and reproduction costs, should be recordedas direct costs to each user program.

Direct Costs

Direct costs are those expenses which can becharged directly as a part of the cost of a productor service, of a department or operating unit, or ofa program. Direct costs are distinguished fromdirect support costs, which can be distributedamong one or more programs, and indirect costs,which must be distributed to all instructionalprograms, special projects and auxiliary programs.

All direct costs charge to programs are classi-fied as objects of expe lure. These objects ofexpenditure are discussed in detail in Part 11I,,

Section A. (See also Exhibit 1-D-1, Normal ObjectClassification of Expenditures by Major ProgramFunctions.)

Direct costs should be charged to the programmost clearly identified with the purpose for thecost. Examples of costs easily identified with aparticular program are teachers' salaries, busdrivers' salaries, and textbooks.

Other direct costs such as employee benefits,substitute teachers' salaries, and miscellaneousinstructional supplies-costs that are not so easilyrelated to specific programs-may be charged toholding (suspense) programs for subsequent real-location to using programs.

Direct Cost Prorations

Direct cost prorations may be defined as theassignment or distribution of costs to programs inproportion to the benefits such expenditures pro-vide in accordance with a formula or otherequitable procedure. Two kinds of direct costsrequire proration: those charged to a holdingprogram for subsequent reallocation and those splitbetween two or more programs at the time ofinitial recording of 'he costs.

Holdhig ProtiumThe holding program is a suspense account,

which holds the costs temporarily until they areassigned to the appropriate using program. Directcosts such as employee benefits, substituteteachers' salaries, and miscellaneous instructional

67 6/84

supplies are difficult to assign directly because theyare lump sum payments. The use of holdingprograms facilitates timeliness of detail accountingprocesses and allows for clear determination of theappropriate placement of charges. All charges toholding programs should be transferred to theappropriate programs on a monthly basis. In noinstance may a balance remain in a holdingprogram at year-end.

Substitute teacher salaries. There are threemethods of allocating substitute teacher salaries:by actual substitute assignments, by number ofcertificated teaching personnel, or a combinationof the two methods.

Actual substitute assignments. This method pro-vides that costs of short- and long-term subStituteteachers be charged to the programs in which theteachers actually substituted. Records of the pro-gram assignments are maintained for each teacherand the costs allocated according!, . The chargesmay be made directly to the appropriate programswhen paid, or allocated monthly from a holdingprogram.

Number of certificated teaching personnel. Thismethod of allocating the costs of short- andlong-term substitute teachers is based upon thenumber of certificated teaching personnel eligiblefor substitutes. Since the salaries of substitutesmay be considered a normal cost of all programs.both long- and short-term substitutes' salaries maybe charged to all programs on a pro rata basis.

Site Allocations. Using any of the above alloca-tion methods, collecting the costs by site may bepreferred so that the proration is relative toexperience at each site.

Employee benefits. It is recommended that aholding program for employee benefits be estab-lished. For example, the personnel program mightbe used for holding purposes. The proper object ofexpenditure is used with the initial charge to theholding program. (See the example, page III-14.)

Miscellaneous instructional supplies. Miscel-laneous instructional supplies that are not identi-fiable with specific instructional programs at thetime of purchase should be charged to a holdingprogram (subclassification of object of expenditureclassification 4300) in the instructional administra-tion or instructional media programs for subse-

quent distribution. The miscellaneous suppliesshould be allocated monthly to the instructionalprograms based on actual usage or on the ratio ofeach program's enrollment to the total accumu-lated enrollment of all instructional programs.

Description

Detailed expense code Amount

SitePro-gram Debit Credit

STRS Fund Ex.POWS Molding) 500 3100 xxx 920.000Cash in County

TreesurY 500 9100 xxx 920,000Instructional Pro-gram EmployeeBenefit Expense 181 3100 xxx 2,500STRS FundExpense(Holding) 500 3100 xxx 2,500

NOTE: The two entries represent (a) the initial recording*of a StateTeachers' Retirement System Fund disbursement in its properobject and holding program; and (b) the subsequent proration of ashare of the State Teachers' Retirement System Fund from theholding program to an instructional program. For purposes ofmaking this employee benefit expense allocation, factors may beestablished in the payroll system representing arncints per certif I.cated employee 'and amounts per classified employee. respectively.

Two or More Programs

Salaries of personnel. working in two or moreprograms are prorated on the basis of time spent ineach program. Equipment and services utilized, bymore than one program are prorated on the basisof equipment usage and the percent of serkiceprovided to each program.

Direct Support

Direct support charges constitute a reallocationof portions of the direct costs accumulated in thevarious support programs. In order to comply withthe requirements of the Annual Financial Reportof Programs as well as requirements of certainother programs for which these direct supportcharges are required for state reporting, eachdistrict superintendent and county superintendentshall allocate the portions of the direct costs in thesupport programs for services rendered to theinstructional programs, special projects, and auxil-iary programs. One or more of the followingcriteria shall be applied to identify a charge asdirect support:

1, The costs of services are readily and reason-ably identified as support to a particularprogram.

68III -13

The administrator of the using programusually has some control over, or respon-sibility for, the costs of services.

3. The costs of services in question would nolonger be necessary if the using program werediscontinued.

4. The costs of services from a support programfor which, by definition. all costs must bedistributed as direct support. (Applies toPupil Services and Pupil Transportation)

One example of a direct support charge is thecost for a field trip charged (debited) to aninstructional program and credited to the trans-portation program a service that was specificallyrequested for an instructional program beyond thenormal home-to-school transportation services pro-vided to students.

Another example is the salary, or proratedportion of the salary, of a psychologist whoprovides a specific service to a special educationi nst rust ional program.

Direct costs of support programs also may hecharged to other support programs as direct sup-port charges. For example. the instructional mediaprogram requests maintenance on its equipment.:!) cost of the time and material is shown initially

a direct cost of the maintenance program butsubsequently is distributed as a direct supportcharge to the instructional media program,

Auxiliary programs, such as food services. mayhe subject to the distribution of direct supportcharges to or from other programs. For example,the direct costs of special preschool meals initiallyare charged to the food services program andsubsequently distributed as direct support charges

the preschool program.As another example. the direct costs of custodial

services are initially charged to the operationsprogram and then distributed as direct supportcharges to the food services program.

If a support program's services directly benefitother programs such as transportation servicesprovided to an instructional program for a fieldtrip the costs should be charged to the usinginstructional program in much the same way thatan outside firm would charge for its services. Thecharge is actually a transfer of costs by the use ofan interprograni charge and credit transfer.

111 14

Several methods may be used to accumulate andallocate direct Support charges. The intent of thissection is to authorize sufficient alternativemethods to meet individual needs while at thesame time maintaining a system that developsreasonable comparable data among all school dis-tricts and offices of county superintendents ofschools. One or more alternative methods shall beavailable for each support and auxftry -program tobe used in determining direct support charges. Themethods are shown for each program in Figure111 -1.

Description of Methods

Thi7 following methods shall be used to allocatedirect support charges:

Time-and-materials method. (Appropriate for allprograms) The costs of salaries and benefits areaccumulated in proportion to the time spent andthe cost of materials used (if any ) on a givenassign

h:Campte:

The sala'y and benefits of the director of specialeducation are a direct charge to the district administra-tion program. The charges are prorated to each specialeducation program based on the time spent and the costof any materials used.

Rate per mile method_ ( Appropriate for Trans-portation program) Under the rate per milemethod, the total costs of operating a vehicle arcdivided by the number of miles driven. Thisformula may be based on the prior year's costs oron estimated costs for the current year.

Work order method (Appropriate for Instruc-tional Media. District Administration. and Mainte-nance programs) A variation of the time andmaterials method is the work order method where-by charges for time for a specific job performed fora program and the ..ost of the materials used areaccumulated on work orders by the servicingprogram. The total cost from the work order istransferred as a direct support charge to the usingprogram. For example. a printing departmentmaintains a work order system for each jobperformed for all other programs in the district.

When actual costs cannot he readily identified,then some method of proration must he used,

69

Support service pr AttainTime andmaterials

Instructional AdministrationInstructional MedraSchool AdministrationPupil Se( VCeSd°MIKA AdministrationMaintenanceOperationsTransportationa

Methodist Use one or a combination of methods as specified on this chart

Rate permile

Workorder

A .d.a. orenrollment

Number of classesteachers served

Oddib

c.

Timefloot area or Howquantity consumed concumpt Ion

d These (xi/Warns wilt have no residual costs eniaming to he distributed as indirect CoStS.actually transported.

cApplicable to master plan proArns only.dAppi,edble to grounds and water only.

Figure Methods of Allocating Direct S%pport Costs from Support Service Programsto Instructional Programs, Special Projects, and Auxiliary Programs

rerage daily attendance or enrollment method.(Appropriate for Pupil Services. Operations, andTransportation programs) The average daily atten-dance or enrollment method is a way of proratingcosts by taking the ratio of the pupils in anindividual program to the total pupils served by thesupport program. This method is appropriate whenpupils are served equally, or when required todistribute residual costs in the Pupil Services andTransportation Programs,

Exampie

A team of psychologists serves three special educationprograms Program A. with 30 students: Program B, with20 students: and Program C, with 15 students. A ratio isestablished between the number of students in eachprogram and the total number in the three specialeducation programs served by this ,team. The total costof the psychologists' salaries and benefits is S6,700 permonth, the cost is allocated among the programs, 40percent 0...2.(is0) to Program A: 27 percent (SI.SW) toProgram B: and 33 percent (S2,' 11) to Program C.

Number of (.Iasses/ teachers serred me thud " --t Appropriate for Instructional Administration.School Administration, and Pupil Services pro-grams) The number of elasws/teachers servedmethod is a way of prorating costs by taking theratio ot the number of classes; teachers (cull -timeequivalents) served in an individual program to thetotal number of classes/teachers served by thesupport prore1%.rrtt. This method is appropriate whenclasses teachers are served equally.

umphy\ school principal's office sears a staff of IS per-

6/84

sons, including 15 regular teachers and three specialeducation teachers. Thc School Administration sup-port program costs attributable to the special educa-tion program would be 3 IS x total school's adminis-tration program costs.

Time-floor area method. ( Appropriate for Oper-ations program) The time-floor area method isused to prorate experse to a given program on thebasis of the floor area occupied by the program inproportion to the total floor area and the percentof time such floor area is used.

hXtittipie:

The cost of treatment for an existing plant floor areaof 60,000 square feet is $1.000. Otte-third of the totalarea, or 20,00 square feet, is used for equal amounts oftime by classes for adults and classes for each of gradesnine through twelve. The classes for adults consumeone-fifth of the class time thetefore. the amount ofexpense distributed to classes for adults is one-filth ofone-third of S ,OOO, or S66.67,

The square footage of the floor area may hedetermined by actual measurement or by the"classroom units" basis. The "classroom units"basis involves allocating Direct Support Costs usingthe number of classrooms utilized by each pro-gram. Large spaces. such as cafeterias and audi-toriums. are allocated on an equivalent number ofstandard classrooms basis. For example. if a stan-dard ',classroom in a school is 070 square feet andthe cafeteria occupies 7760 square feet. the cafe-teria costs would be allocated as S classroom units.

70 Ill- 15

Example:

A school might contain the following "classroomunits":

Classroom Units14 Regular Classrooms 14

3 Special Education Classrooms 3

Cafeteria S

Total 25

In the allocation of Direct Support Costs usingthe "classroom units" basis, General Education pro-grams would receive 14/ 25 (56 percent), and SpecialEducation programs would receive 3/25 (12 per-cent) of the costs.

If, for instance, the cafeteria is used by morethan one program, the hour-consumption methodwould be used to further distribute the costs to theuser programs.

The "classroom units" basis assumes all commonspace, such as corridors, restrooms, offices, and soforth, benefit each room . in proportion to thefloorspace occupied by the room; such commonspaces are ignored for- purposes of computation.

Hour-consumption method. (Appropriate forMaintenance and . Operations programs) Prorationof an expenditure by the hour-consumptionmethod is made by charging the program inproportion to the length of time the program usesOw facilities.

Eta/Vie:Classes for special education use certain school

Expenditures for water, electricity, and heatare prorated..orrttrrbasis of the hours the building isused for classes for special education in proportion tothe amount of time the building is used for all types ofclasses.

QUalitity-constimed method. (Appropriate forOperations program) The quantity-consumedmethod is used to prorate expense to a givenprogram in proportion to the actual amount ofsupplies consumed.

f.Xaniple:

Naper towels are purchased at a cost of $1,000.One-tenth of the towels are used by recreational groupsin the community service program. Ten percent. orSI00. is a proper charge to this activity.

After an allocation of support program chargeshas been made, the cost of a support program will

111 16

appear as total direct costs plus direct supportcosts from other programs, less direct supportcharges to other programs. The cost of an instruc-tional program will appear as total direct costs plusdirect support charges.

Direct suppOrt program charges shall be distri-buted, but they should be shown separately and asan addition (debit) to the programs they directlysupport. As direct support program charges areadded to other progranis, a like amount will besubtracted from (credited to) the support programsfrom which the charges were distributed.

An additional method of allocating direct supportcharges is provided, using a combination of methodspreviously described and outlined in Figure 111-1.This procedure, in which a uniform allocationmethod of direct support costs is developed, utilizesa series of formulated factor sheets. Informationalfactor sheets and selected formulas are presented foruse by school districts or county offices of education.These sheets appear as Exhibit 111-B and 111-C.pages 111-29 through 111-46.

Application of Methods

Special Projects

Special projects are unique in that they havetheir own funding and are entirely in support of aninstructional program or another support program.The donor-authorized,support services have alreadybeen charged as direct costs to the special projects,so no further distribution necessary unless thedistrict provides local or general state aid supportfor these project's.

SPE( IAL NWT: The distribution of the special protects to theinstructional programs is at the discretion of the district and isnut required for state reporting. However, the special projectsshall net be distributed to the instructional programs until atterthe indirect costs have been applied.

The method of allocating district contributionsas direct support charges to speci;.I projects shall beas follows:

1. Salaries of the district director of projects,salaries of clerks, employee benefits, supplies,and other costs charged directly to the districtadministration program time and materialsmethod

:7. Instructional media service costs and mediaequipment rental time and materials or workorder method

71

t

6/84

3. Pupil services costs, such as salaries forpsychologists and nurses, employee benefits,special testing, and physical examinationstime and materials method

4. Custodial and other operations costs --timeand materials method, time-floor area meth-od, or quantity-consumed method

5. Food services costs-time and materials orquantity-consumed method

6. All other charges-time and materials method

('se of Categorical Funds

Part 35 (commencing with Section 63000) of theEducation Code clearly expresses the objective ofmaximising the level of direct services to pupils pur-chased with apportionments for seven specific cate-gorical programs. In keeping with that objective,Part 35 requires that at least 85 percent of theapportionments for the programs listed below shallbe budgeted and expended for direct services topupils at school sites. Direct services are deliveredwhere the pupil is the direct recipient or beneficiaryof the services. The apportionments covered by Part35 arc:

(I) Child care and development programs pursuant toChapter 2 (commencing with Section 8200) ofPart 6 [of the Education Code].

(2) School library programs pursuant to Chapter 2(commencing with Section 18100) of Part 11 [ofthe Education Code).

(3) School improvement programs pursuant to Chap-ter 6 (commencing with Section 52000) of Part 28[of the Education Code).

(4) Bilingual education programs pursuant to Article1 (commencing with Section 52000) and Article 3(commencing with Section 52160) of Chapter 7 ofPart 28 [of the Education Code].Economic Impact Aid programs pursuant toChapter I (commencing with Section 54(X)0) ofPart 29 [of the Education Code].

(6) The Miller -Unruh Basic Reading Act of 1965 pur-suant to Chapter 2 (commencing with Section54100) of Part 29 [of the Education ('ode].

(7) Compensatory education programs pursuant toChapter 4 (commencing with Section 54400) ofPart 29. except for programs for migrant childrenpursuant to Article 3 (commencing with Section54440) of Chapter 4 of Part 29 [of the EducationCode],

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(5)

Instructional %pioft

Costs of services that are readily and reasonablyidentifiable within the instructional4dministration,instructional media, and school administrationprograms, which support various instructional andauxiliary programs, shall be transferred to the usingprogram through the use of an interprogram chargeand credit transfer. Examples of such costs areelementary and secondary supervisors' and clerks'salaries and employee benefits; costs of services forthe use of instructional media and costs of mediaequipment rental for a particular program; prin-cipals' and clerks' salaries; employee benefits; andsupplies. All remaining costs shall be distributed asindirect costs as shown-oh' page 111-19, "SupportC s Aecolitifing.

Pupil Services

All pupil services costs shall be distributeff asdirect support charges through the use of aninterprogram charge and credit transfer. Noresidual costs will remain in this support service tobe distributed as indirect costs.

A ttendance and welfare. Attendance and welfarecosts shall be distributed on an enrollment or a.d.a.basis to all instructional programs. Exception:costs of attendance and welfare personnel thatare assigned to a particular plant, such as a highschool, shall be direct support costs based on thetime-and-materials method.

Guidance and counseling. Guidance and counsel-ing costs that are readily and reasonably identifiedshall be distributed on a time-and-materials basis.

Example:

A counselor is assigned to a given site, such as a highschool. The salary and employee benefits of thecounselor and the clerks and any materials used arecharged to the appropriate instructional programs.

That portion of costs for which the time-and-materials basis is not feasible shall be distributedon an enrollment or a.d.a. basis.

Health. Health costs shall be distributed on thebasis of time and materials. ExImples are salariesand employee benefits of psychiatrists and nurses,special testing, and physical examinations that aredistributed to the applicable instructional pro-grams. That portion of costs for which the time-and-materials basis is not feasible shall be distrib-uted on an enrollment or a.d.a. basis.

72III-17

NO! E: Some Special Education Master Plan categories (RSP pro-grams and certain DIS programs) do not generate a.d.a. or enroll-ment. All Direct Support Costs must be allocated to these programson a time and materials and or number of classes teachers-servedhams.

General Support

County superintendent and district administra-tion. District and county superintendent adminis-trative costs shall be distributed using the time-and-materials method for those costs that are readilyand reasonably identifiable. The work ordermethod shall be used for administrative servicessuch as noninstructional data processing, printing,and duplicating services.

The remaining adMinistrative costs shall bedistributed as indirect costs, as described on page111 -19.

Maintenance services. All maintenance servicesthat are readily and reasonably identifiable shall betransferred to the using program by the use of aninterprogram charge and credit transfer. Thecharges shall be the actual costs of providing theservice, based on a work order system and/or atime-and-materials basis of charges.

Examples of maintenance services are main-tenance and repair of driver training vehicles andequipment; maintenance and repair of instructionalequipment used in the classroom; and maintenanceand repair of food service equipment.

The remaining maintenance costs shall be distri-buted as indirect costs, as described on page 111 -19.

Operations services. Operations SE ;vices that arereadily and reasonably identifiable shall be trans-ferred to the using program by the use of aninterprogram charge and credit transfer. Operationsservices that shall be charged as direct support tothe using program include site custodial salaries,employee benefits, supplies, utilities, laundry anddry cleaning, uniform repair, and other servicesperformed for the benefit of a particular program.As applicable, the time and materials, time-floor'area (using acreage instead of square feet forgrounds), quantity consumed, hour-consumption,a.d.a. or enrollment (for grounds and water only),or a combination of these methods shall be used.

The remaining operations costs shall be distri-buted as indirect costs, as described on page 111-1 9.

Transportation services. Costs of transportationservices shall be transferred as direct support costs

Ill lS

to all the programs and projects utilizing theseservices by the use of an interprogram charge andcredit transfer in the following manner:

1. All field trips shall be charged to the usingprogram based on one of the followingmethods:

a. Actual charges from the bus contractorb. Fixed rate per mile based on prior year

costs or estimated costs for the currentyear

c. Fixed rate per mile plus hourly rate chargesper trip

2. Transportation costs for students in specialday classes under special education----and costsfor transportation of any of those students toCalifornia state schools or to the school dis-tricts other than their own--shall be chargedto the special education subprogram, transpor-tation, by one of the following methods:

a. Actual charges from the bus contractor oractual costs computed by the school district

b. Fixed rate per mile, based on prior yearcosts or estimated costs for the currentyear, multiplied by the number of miles perday for each program, multiplied by thenumber of school days

c. Fixed rate per mile, plus hourly charges,multiplied by the number of miles per dayfor each program, multiplied by thenumber of school days

3. Other transportation, not home-to-school,such as transportation to athletic events,delivery of regional occupational programstudents to place of employment, and trans-portation from school to school, and to andfrom E.A.S. meetings shall be charged as instep (2).

4. The remaining transportation charges (home-to-school costs for the district preformal, ele-mentary, secondary, and regional occupationalcenters or programs and pupils in special edu-cation not requiring special transportation) aredistributed as follows:

a. Divide the total remaining transportationcosts by the total number of studentstransported.

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b. Multiply the rate obtained in substep 4(a)by the number of students transported ineach category.

c. Transfer these amounts as direct supportcharges to the various programs involved.

No residual costs will remain in this supportservice to be distributed as indirect costs.

SPECIAL NOTE: All charges for transportation services toorganizations outside of the district, such as parent-teacherassociations, recreation districts, senior citizen groups, and soforth shall be abated to the tnssuportation program by the use ofa contra account. These charges are based on the methodsindicated for field trips in step (I).

Awidiary Programs

Community services Community services shallnever be distributed as direct support charges;however, this program *i receive direct supportcharges, such as custodial service, utilities, main-tenance service, and instructional media suppliesand charges, if applicable, from the facilitiesacquisition and construction program.

Fringe Benefits on Behalf of Retired Persons.Costs of fringe benefits paid on behalf of retiredpersonnel shall neither receive direct supportcharges from other programs nor be distributed asdirect support charges.

Food services. Donor-authorized food servicesexpense shall be a direct charge to the specialproject. Food services expenditures that are districtcontributions for special projects shall be distrib-uted as direct support cotts to the projects. Allother expenditures shall remainfin the food servicesprogram. However, this program shall receive directsupport charges, such as custodial services, utilities,and maintenance of equipment.

Facilities. Expenditures charged to the facilitiesprogram for leased or rented facilities shall bedistributed as direct support charges to the userprograms.

Indirect Support

Each school district and office of the countysuperintendent of schools shall allocate indirectcosts to all instructional programs, special projects,and auxiliary programs. The following methodshall be used to allocate the indirect costs:

1. Total the remaining Logs in all the supportprograms after other funds are charged. Exclude

6/845-78569

any remaining costs in special projects andother outgo.

2. Total the direct and direct support costs ofthe instructional programs, special projects,and auxiliary programs.

3. Divide the total determined in step (1) by thetotal in step (2), and carry to six decimal places.

4. Apply the rate obtained in step (3) to thetotal of the direct and direct support costs ofeach instructional program, special project,and auxiliary program.

NOTE: A sample reporting document is illustrated in Exhibit I-Eon pages 1-19 through 1-22.

Support Costs Accounting

An interprogram charge and credit transfer pro-cess is to be used to transfer direct support chargesfrom the support service programs to the instruc-tional programs, special projects, auxiliary pro-grams, and other funds. This transfer can beidentified or coded in several ways, particularly forelectronic processing. Four ways are given herewhich may be used to transfer, for example, salariesof elementary principals, vice-principals, and clerks;employee benefits; and office supplies from schooladministration to direct support costs of the generaleducation elementary program.

Example 1. Use object of expenditure classifica-tion 5900, Support Costs:

5910 General Education, Elementary (SchoolAdministration) (dabIt)

5990 School Administration (GeneralEducation, Elementary) (crodir)

Example 2. Establish a direct support codeusing the first two digits of the object code with 98as the last two digits for the debit and 99 for thecredit:

1298 General Education, Elementary (SchoolAdministration) idabiti

1299 School Administration (GeneralEducation, Elementary) (credit)

Example 3. Establish a direct support codeusing the first two digits of the object code with analpha notation for the last two digits, such as DDfor the debit and DC for the credit:

1200 General Education, Elementary (SchoolAdministration) (debit)

120C School Administration (GeneralEducation. Elementary) (credit)

74 111 1 9

Example 4. Use a code system preceding theobject of expenditure, and assign code numbers toeach type of support program and the respectivedebit and credit codes as follows:

0100 Special Projects

0110 Debit0115 CIIIdit

0200 Instructional Support

0210 Instructional Administration-Debit0215 Instructional Administration-Credit0220 Instructional Media-Debit0225 Instructional Media-Credit0230 School Administration-Debit0235 School Administration-Credit

0300 Pupil Services0310 Attendance/Welfare-Debit0315 Attendance/Welfare-Credit0320 Guidance/Counseling-Debit0325 Guidance/Coumeli rig-Credit0330 Health-Debit0335 Health-Credit

0400

0500

General Support

04100415042004250430043504400445

District Administration-DebitDistrict Administration-CreditMaintenance-DebitMaintenance-CreditOperations-DebitOperations-CreditTransportation-DebitTransportation-Credit

Auxiliary Support

0510 Community Services-Debit0615 Community Services-Credit0520 Food Service-Debit0525 Food Service-Credit0530 Facility Acquisition and Construction

-Debit0535 Facility Acquisition and Construction

-Credit

This method will help to identify the source ofthe transfer along with a brief description of theaction:

0230 General Education, Elementary (SchoolAdministration) (debit)

0235 School Administration (GeneralEducation, Elementary) (credit)

Indirect Costs Distribution

Only the methods illustrated in Example 1 andExample 4 can be used to distribute the indirectcosts. In Example I, change the description incodes 5910 and 5990 to Indirect Costs. Example 4requires the addition of codes 0600, Indirect Costs;0610, Indirect Costs- Debit; and 0615, Indirect

ill 20

CostsCredit. In either case all the instructionalprograms, special projects, and auxiliary rrogramsshall be debited in the manner as described forcomputing the indirect costs as illustrated on pageIII-19, and each support program (instructionalsupport, pupil services, and general support) shallbe credited with the remaining amount after alldirect support charges have been allocated.

Witldn-Fund and Between-Fund Support

Within a fund, all direct and indirect supportdebit and credit transactions must net to zero. Forthis reason, at the fund level the 5900 account mustbe zero, with no budget balances, for the supportactivity between funds.

Between funds, support activity shall result in acredit balance for the fund providing the supportwith a negative budget amount; and the fund receiv-ing the support shall record a debit balance with apositive budget amount.

Therefore, a 5900 account balance at the fundlevel may occur, but only for the amount ofbetween-fund support. The following specific rulesapply for between-fund support:

I. Only one object account within 59XX series isto be used for indirect support between funds.

2. Objects within the 59XX series used for directsupport between funds shall not be the same asthose objects used for within-fund support, inorder to separate between-fund and within-fund direct support.

3. A fund receiving 59XX support charges maybudget an amount within the 59XX series suf-ficient only for between-fund support charges.

4. The general fund providing 59XX support toanother fund may budget a negative amount inthe 59XX account(s) and adjust the budget formajor account 5000.

5. Direct or indirect support shall not be chargedbetween funds, except for the following:a. Adult education fund (shall be charged)

6. Indirect support provided to the adult educa-tion fund shall be computed by using the pre-vious fiscal year's nonrestrictive indirect generalfund support rate, applied to the total expendi-tures of the adult education fund, objects 1000through 6000. Payments shall result in a creditto cash or liabilities and a debit to the indirectsupport 59XX object within the fund receivingindirect support.

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7. Indirect support charges made by the generalfund shall result in a debit to cash or receiva-bles and a credit to the indirect support 59XXobject within the Indirect Support HoldingProgram in the general fund.

The Indirect Support Holding Program is to bemaintr.ined in the general fund, along with theInstructional Support and General Support pro-grams, with a negative balance equal to the amountof indirect support charged to other funds. This neg-ative amount, with positive amounts for Instruc-tional and General Support, will produce a netundistributed indirect support cost amount whichmust be used for general fund indirect supportdistributions.

SECTION C

Miscellaneous Accounting Procedures

Methods of accounting for cooperative projectsoperated among districts, accounting by funds,accounting for stores, and abatements of expendi-tures including use of contra accounts are includedin this section.

II/ Cooperative Projects

California school districts and offices of cow-aysuperintendents of schools often pool their re-sources and operate certain federal and stateprojects on a cooperative basis. This procedureusually calls for one school district or countysuperintendent of schools to operate the projectfor one or more other school districts or countysuperintendents. The operating school agency isusually referred to as a local educational agency orlocal operating agency.

The Annual Financial and Budget Report, asspecified by the State of California, is used tocollect fiscal data for comparative and managementpurposes. Current expense and the costs of edu-cation are developed on the basis of cost per unitof average daily attendance (a.d.a.). if valid com-parative data are to be obtained, each schoolagency must report its own share of the incomeand expenditures when the agency is involved in acooperative project.

District and county superintendents participat-ing in cooperative projects must report the incomeand expenditures resulting from their involvementin the project in the following manner:

I. Each participating district or county recordsits share of the project entitlement in theappropriate income classification. If it is anESEA, Title I, project, for example, theincome will appear in classification 8160,Elementary and Secontiwy Education Act.

2. Each participating district and county recordsits share of the cost of the project in object ofexpenditure classification 5700, ltderdistrktand NonpubNc School Services, when it paysthe district that operates the project. Its shareof the cost will normally be equal to its share ofthe income.

3. The operating district must account for all ofthe costs of the cooperative project in theappropriate expenditure classifications duringthe project year. The operating district shouldbill each participating district periodically orat least by the end of the year for its share todate and then abate the cooperative projectobject of expenditures by the amount ofincome received from each of the participat-ing school agencies. The net costs will bereported on the Annual Financial and BudgetReport of the operating district.

Some cooperative projects are established onlyto meet specific federal entitlement requirements.Such projects usually require that one district serveas the applicant district for purposes of disbursingfederal funds to the other participating districts.The participating districts are operating their ownprojects in this situation. In the implementation ofthis type of cooperative project, quarterly cashadvances may be made directly to the administra-tive agent of the applicant district for deposit anddisbursement. Applicant districts should deposittheir prorated amounts in an account under in-come classification 8100, Elementary and Sec-ondary Education Act, and the prorated amountsfor participating districts under classification 8490,Other Federal Funds. A copy of the cooperaf cagreement filed with the county superintend., twill serve to authorize payineat to the participai zdistricts. Disbursement transactions by the operat-ing district should be handled as abatements toclassification 8490. Participating districts shouldrecord income under classification 8160. Allexpenditures arc to be recorded in accordance withthe California School Accounting Manual.

6034

6111 21

7

Special Education Master Plan

Special instructions apply to the Special Educa-tion Master Plan (Education Code sections 5630056369 and 56700-56820).

1. Certificated employees performing designatedinstructional services (DIS) shall be charged to1100, 1500, or 1600, depending on the servicesperformed, as a direct cost of the DIS program.

2. Instructional aides shall be charged to objectof expenditure 2100, Salaries of InstructionalAides for Direct Teaching Assistance. Brailleaides and mobility aides providing direct assis-tance to students are charged to object ofexpenditure classification 2100.

3. Professional specialists, as required by Educa-tion Code Section 56336, shall be charged toobject of expenditure classification 5100, Per-sonal Services of Instructional Consultants,Lecturers, and Others.

4. A school district or the county superintendent,can be the "Administrative Unit" (AU) in agiven local plan area.

5. Apportionments other than regionalized ser-vices are described as follows:

Method One

For the Special Education Master Plan, if thelocal plan area has elected for the apportion-ments to be made to the AU, the AU shallrecord the apportionment in income classifica-tion 8612, Special Education Master Plan.The AU shall transfer the operational funds tothe participating agencies by expenditure clas-sification 7440 for .monies to be received bydistricts and by expenditure classification 7460for monies to be received by county superin-tendents. Districts or county superintendentsreceiving transfers shall record the income inincome classification 8940 if received from adistrict, or in 8960 if received from a countysuperintendent.

Method Two

If the Local Plan Area has elected for SpecialEducation Master Plan apportionments (otherthan regionalized services) to be made directlyto the participating agencies, each districtand; or county superintendent shall record theapportionment in income classification 8612.

NOTE: hi either-Method, apportionments forSpecial Education Master Plan Transportationshall be recorded in income classification 8613.

6. Apportionments for Program Specialists andRegionalized Services shall be made directly tothe AU, which shall rqord the apportionmentin income classificatW8612. The AU maycontract to have participating agencies providethe regionalized services.

The AU shall transfer the regionalized servicefunds to the participating agencies by expendi-ture classification 7440 for monies to be receivedby districts and by expenditure classification7460 for monies to be received by countysuperintendents. District or county superin-tendents receiving transfers shall record theincome in income classification 8940 if receivedfrom a district, or in income classification 8960if received from a county superintendent.

7. Any district or county superintendent of schoolsbilling for and receiving payment for specialeducation excess costs and/or deficits or scial education transportation excess costs and/or deficits shall record the income received as-8920, Other Tuition. Any district or countysuperintendent of schools paying these excesscosts, and/or deficits shall record these pay-ments as 7270 for amounts paid to districtsand 7280 for amounts paid to county superin-tendents. These expenditures for Special Edu-cation Master Plan are not considered to be acurrent cost of education but rather a transferof encroachment, commonly known as thelocal general fund contribution.

8. Any district or county superintendent of schoolsproviding regionalized services pursuant toany approved local plan in excess of regional-ized services required by law may bill for andreceive payment for these services, recordingthe income received as 8875, Contract Ser-vices. Any district or county superintendent ofschools paying for these services shall recordthese payments as 5700, Interdistrict and Non-public School Services.

9. Any district or county superintendent of schoolsreceiving income under PI. 94-142 as entitle-ment aid per unduplicated count shall recordthe income as 8181, Entitlement Aid Per

111- 22 6/84

77

Unduplicated Count, and shall record theexpenditures as direct costs of Special Educa-tion Master Plan.

Any district or county superintendent of schoolsreceiving income under PL 94-142 as a grant-in-aid for an approved special project shallrecord the income as 8182, Grant Aid forApproved Projects, and shall record the expen-ditures as a direct cost in Special Projects.Any AU receiving monies for PL 94-142 oreither type to be distributed to a district orcounty superintendent of schpols shall abateits. account for the income so distributed.

Accounting by Funds

Separate, balanced records should be maintainedfor the General Fund and for each special fund.The General Fund may be used for nearly all of thepurposes shown in this outline. Special funds arehighly restricted by law as to their usage.

Examples of special funds are the following:Bond Interest and Redemption Fund

The Bond Interest and RedeMption Fund willinclude only the following objects of expenditure:classification 7130, Bond Redemption; classifica-tion 7140, Bond Interest and Other ServiceCharges; and classification 7300, Interfund Trans-fen. Responsibility for this fund is vested in thecounty auditor.

Building Fund

The Building Fund is established to receive fordeposit the proceeds of the sale of bonds; proceeds-/from the sale of real property; federal subventionsfor capital outlay purposes, including any fundsreceived under Public Law 81-815; and insuranceindemnities. Exclude from this fund monies de-rived from local taxes for capital outlay purposes,because these expenditures must be budgeted andexpended from the General Fund. Charges may bemade as follows (object of expenditure classifica-tions shown in parentheses):

Project director (2200)Building inspector (2900)Employee benefits (3000)Services and other operating expenditures (5000):

Rentals, leases, and repairs (5600)Construction insurance (5800)

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Advertisements of bond sales and other costsrelating to the sale of bonds (5800)

Capital outlay expenses (6000)Repayment of state schoc! building aid (7150)

Special Reserve Fund

The Special Reserve Fund is to be used only forcapital outlay purposes and for the GoverningBoard's established restricted reserves of the district.The income is derived by transfer from the GeneralFund, interest earned on deposited funds, and fed-eral subventions for capital outlay purposes, includ-ing funds received under Public Law 81-815.

State School Raiding Fund

The State School Building Fund is establishedfor the deposit of funds apportioned for sitepurchase and building purposes as provided byEducation Code sections 16000-16414. The dis-trict may be required to transfer any availablemonies from all other funds as the district contri-bution to a particular project. Federal subventionsfor capital outlay, including funds received underPublic Law 81-815, may be deposited in this fund.Expenditure classifications authorized in this fundare the same as for the Building Fund.

Cafeteria Fund

The Cafeteria Fund or Account shall be usedonly for the income received and expendituresmade to operate the cafeterias. The income isderived from the following sources (income classifi-cations shown in parentheses):

National School Lunch Program (8220)California Child Nutrition Act of 1974 (8630)Sale of food (8844)Interest earned on deposits (8860)Incoming transfers (8990)

Objects of expenditure shall be those that arenecessary to record the expenditures for the foodservice operation.

Child Development Fund

The Child Development Fund shall be estab-lished in each school district that maintains childdevelopment programs as authorized by EducationCode sections 8200- -8383. Income may be derivedfrom the following sources (income classificationsshown in parentheses):

78 111. -23

Economic Opportunity Act (8150)National School Lunch Program (8220)Children's centers (8530)Child Nutrition Program (8637)Apportionment for school facilities (8640)Apportionment for children's centers (8650)Tax relief subventions (8070)District taxes (8810)Interest (8860)Interfund transfers (8930)

Expenditures shall be those that are necessary torecord the charges for the Child Developmentprogram made to expenditure account classifica-tions 1000-6000, except classification 1700,Superintendents' Salaries. Charges in the 7000series are limited to classification 7390, OtherAuthorized Interfund Transfers; and 7410, TAMS-fers from Funds of Lapsed or Reorganized Dis-tricts.

Adult Education Fund

The Adult Education Fund, per Education CodeSection 42238(g)(4)(D), shall be established in eachschool district that maintains an adult program.Adult means those programs and services providedfor adults, as defined in Education Code Section52610 and in California Administrative Code, Title5, sections 10500- -10591.

Deferred Maintenance Fund

The Deferred Maintenance Fund is for the pur-pose of major repair or replacement of plumbing.heating, air conditioning, electrical, roofing, floorsystems, and exterior and interior painting of schoolbuildings or such other items of maintenance as maybe approved by the State Allocation Board (Educa-tion Code sections 39618- 39619.5).

Self-Insurance Funds

Separate funds shall be established for each typeof self-insurance activity; e.g., Workers' Comperza-lion Self-Insurance Fund, Health and Welfare Self-Insurance Fund, Deductible Property Loss Fund,and so forth, as authorized by Education Code Sec-tion 39602 (K- -12) or by 81602 (Community College).

Amounts transferred to a Self-Insurance Fundfor self-insurance shall be treated as expenditures ofthe fund providing the amounts. For example, aGeneral Fund contribution to a Self-Insurance

Workers' Compensation Fund would be recordedunder General Fund object classification 3600, Waft-ers' Compensation Isawanc4 and within the Workers'Compensation Self-Insurance Fund as income underobject classification 8874, 54-Insurance Carr -dons /Premiums. A General Fund contribution to aSelf-Insurance Property and Liability Fund wouldbe recorded under General Fund object classifica-tion 5450, Other hesstrance, and within the Propertyand Liability Self-Insurance Fund as income underobject classification 8874, Sefloommince Conbibatkon/Premiums.

Other similar expenditure accounts, descriptive ofthe type of insurance being provided, are to be usedto record the expenditure in the fund which pro-vided the contribution/ premium. The income is tobe recorded under object classification 5874, Sef-Insurance Contrimstions/Prenikuts, in the appro-priate Self-Insurance Fund.

The cost of excess insurance to provide coverageover and above self-insurance capabilities should berecorded as an expense of the Self-Insurarx Fundunder object classification 5450, Other Insurance.

Payments for claims or judgments and paymentsto independent contractors for administrative ser-vices shall be recorded under object classification5800, Other Services and Operating Expendkures,in the appropriate Self-Insurance Fund.

A trust account may be established for the pay-ment of claims by a contracting firm and recordedin General Ledger Account 9130, "Revolving CashFund," within the Self-Insurance Fund. It shall bereplenished by amounts equal to claims paid andrecorded within the Self-Insurance Fund underobject classification 5800, Other Services and Oper-ating Expenditures.

School districts that incur costs related to provid-ing services for a joint powers agency, such as salarypayments of an administrator or other related admin-istrative service costs, should record reimburse-ments made by the joint powers agency under objectclassification 8875, Contract Services, in the appro-priate district fund which incurred the losses. How-ever, payments by a joint powers agency for insuredlosses shall be abated to the district fund which'incurred the losses.

Reimbursements made by a Self-Insurance Fundto another fund of the district shill be abated to therespective accounts receiving the reimbursements.For example: The salary of a self-insurance adminis-

III- 247 9

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trntor may be paid from the General Fund and sub-sequently reimbursed by abatement and then recordedas salary expense within the Self-Insurance Fund.

Workers' Compensation payments received bythe employee and endorsed over to the district shallbe abated to the appropriate General Fund salaryaccounts.

Amounts contributed to a Self-Insurance Fundare lawfully restricted for insurance purposes. If theamounts held in a Self-Insurance Fund are consid-ered to be in excess of the amounts required, asdetermined on an actuarial basis, current and/orfuture contributions may be reduced by the contrib-uting fund(s).

Other Special Funds

Any other special fund may be maintained if it isauthorized by law and maintained exactly as pro-vided by law. Some examples of such special fundsare ( I) Retirement Tax Fund (Education Code sec-tions 24800 and following); (2) Property Use TrustFund; and (3) Deductible Insurance Fund (Educa-tion Code Section 39602). The pattern for maintain-ing the funds shall be the same, as appropriate, as forthe other special funds described in this section.

Accounting for Stores

Payments for the purchase of "stores" (seePart V of this manual), defined as goods on hand incentral storerooms subject to requisition, are simi-lar to expenditures but are not classified as such.These payments constitute the increase of an assetaccount, Stores, equal to the reduction in anotherasset account, Cash in County Treasury.

The issuance of stores must be accounted in therecords of the school district as a reduction of theasset account, Stores, and as a charge to theappropriate expenditure object and program forwhich the stores were issued. Such accountingshould be continuous in the records of the schooldistrict, and, to the extent that the countysuperintendent of schools maintains correspondingrecords, summaries of the issuance of stores shallbe reported to the county superintendent by theschool district periodically, preferably not lessfrequently than monthly. In any event, the balancein the Stores account at the end of each fiscal yearshould represent the value of the stores in thewarehouse of the school district.

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Abatements of Expenditures

Abatement of expenditure is the cancellation ofa part or the whole of a charge previously made,usually owing to refunds, rebates, resale of mate-rials originally purchased by the school district, orcollections for loss or damage to school property.Abatement of expenditure applies to both currentexpense and capital outlay expenditures from allfunds. Tuition receipts, fees, and rentals shall notbe treated as abatements of expenditure. Thisdefinition must be observed in making all decisionsas to whether a receipt is to be reported as incomeor as an abatement of expenditure.

The basic distinction that must be borne in mindis that an abatement of expenditure must alwaysrepresent a receipt that cancels a part or the wholeof a determinable item of previous expenditure. Ifa receipt cannot be substantiated as a cancellationof a specific expenditure, it must be rer 'rted asincome.

The term receipt, as used here, is to be consid-ered as referring to the receipt of cash, except inthose school districts in which the accounting is onan accrual basis. Districts operating on an accrualbasis enter an abatement of expenditure prior tothe receipt of cash, that is, as an account receiv-able. Adjustments between expenditure accountsto correct errors in the distribution of chargesshall not be considered as abatements of expendi-ture.

Accounting; Instructions for Abatements

Receipts that represent cancellations a expen-ditures must be accounted as abatements of expen-ditures previously incurred by crediting suchreceipts to the respective expenditure accounts,thereby eliminating any credit to income accounts.

Receipts representing abatements of expen-ditures must be accounted by abating the appro-priate expenditure accounts during the fiscal yearin which the receipts and the expenditures occur.In no case may receipts of a current fiscal year beaccounted as abatements of expenditures of a priorfiscal year, unless such receipts were accrued bythe establishment of an account receivable in theprior fiscal year. If an abatement does not occur inthe same year as the expenditure or a receivablehas not been set up, the receipt should be shown as

III .25

a receivable when it occurs and will, therefore, be prepare their budgets on the basis of net expendi-an adjustment to the beginning balance. It should tures and attach supporting schedules indicatingnot go into either income or expense. the anticipated gross expenditures and the andel-

Abatements of expenditures must be accounted pated reduction by reason of abatements of suchas such at the time that the receipts occur expenditures. 1

throughout the fiscal year by immediately credit- principal Types of Abatements of Expenditureing the receipts to the appropriate expenditure The following receipts must be accounted asaccounts instead of crediting them to any income abatements of expenditure if receipt and expendi-account. tune occur in the same fiscal year:

Except as the accounting is maintained on acurrent basis in the records of the county superin-tendent of schools and the school district, andexcept for city school districts that supply month-ly or annual reports of income and expenditures tothe county superintendent of schools on the basisof net data, districts must report to the county /superintendent at the end of the fiscal year on all/abatements of expenditures.

All appropriations, apportionments, subsidies, prgrants-imaid from any governmental unit mot beaccounted as income receipts,, pot as abatemeles ofexpenditure.

Use of Contra Accounts

Whenever abatements of any particular type arenumerous, and especially if considerable amountsare involved, it is recommended that the credits bemade to a contra account instead of directly to theexpenditure account. The contra account shouldbe identified as "Abatements of " (insert-ing the name of the expenditure account to whichit relates). It should be maintained adjacent to thecorresponding expenditure account in the expendi-ture (or appropriation) subsidiary ledger. Thecontra account will receive only credit entries forabatements. By this procedure, the undesirablefeatures of a "mixed" account are avoided, andgross expenditure, abatements, and net expendi-ture can be determined easily at any time.

Rdationship of Abatements of Expenditureto Appropriation Control

Regardless of whether abatements of expendi-ture are treated as direct credits to expenditureaccounts or as indirect reductions of expenditureby the use of contra accounts as described underthe preceding heading, the control of expendituresmust be in terms of net expenditures. Districts thatanticipate abatements of expenditure items should

t[1 -26 91

1. Receipts from sales of supplies an I new.materials at cost (a) to students for per-sonal ownership (e.g., art and shop mate-rials); (b) to students by means of vendingmachines dispensing articles supplied bydistricts; or (c) to other governmentalunits, including school districtsNOTE: Some of these sales may be credited to Waresaccounts instead of being abated to expenditure ac-counts, depending on the local accounting methodsemployed.

2. Refunds of overpayments (a) from teach-ers and other employees; or (b) fromvendors and other payees

3. Refunds for return of containers, oildrums, wire spools, and the like

4. Reimbursement of cost of repairs or re-placement of damaged or lost property (a)from pupils, parents, or guardians for lossof books or damage to school property; or(b) from contractors or any other individ-uals for damage to or loss of schoolproperty

5. Refunds from a transportation companyfor unused portions of carfare books,tickets, and the like

6. Refunds of gasoline tax for nonhighwayuse

7. Cancelled warrants (not outlawed warrants)8.

9.

Receipts from sale, in lieu of trade-in, ofused equipment being replaced, such asautomobiles, typewriters, and the like

Refunds of insurance premiums

10. Receipts from settlements of insuranceclaims on account of building, supply, andequipment losses (a) of any amount re-ceived for loss of a building requiringreplacement or reconstruction within the

6/84

current fiscal year; or (b) any amountreceived on account of a loss of supplies orequipment.NOTE: The total amount recorded as an abatement ofexpenditures made for repair or replacement of suppliesor equipment kisses shall not ,exceed the amount ex-pended for this purpose during the same fiscal year

1 1 . Receipts from the sale either of a portionof a new site or of buildings or improve-ments thereon

b/S4

12. Receipts from subleasing an unused por-.tion of premises that the district had torent as a whole to obtain the portiondesired for school purposesNOTE: Any amounts received in excess of the relatedexpense shall be recorded as miscellaneous revenue(income), and not as abatements.

82

1

III -27

Exhibit III -A

Salary object classefic.ation

ANALYSIS OF SALARIES

Position title

Certificated Salaries

1100 Teachers

-

1200 School Administrators

1300 Supervisor

Salary object classification

Teacher, Assistant'Teacher, Rewire.Teacher, Resource Specialist(Special Education)

Teacher, SpeechTeacher, Adaptive PhysicalEducation'

Teacher. Student'Teacher, SubstituteTeacher. Tutor'

r)eanDean, AssistantPrincipalPrincipal, VicePrincipal, AssistantRegistrar"

1400 Librarians

1500 Guidance,tVelfare, andAttendancePersonnel

1800 Physical andMental HealthPersonnel

1700 Superintendents

1800 CertificatedAdministrativePersonnel

1900

Consul .antCoordinatorDirectorSpecialistSupervisor GeneralSupervisor, SpecialSupervisor, Assistant

LibrarianLibranan, Assistant

Counselor, Pupil/ParentPsychologistPsychometristSocial Worker

AudiologistAudiometristChiropodistDentistDental HygienistNiirseOculistOptometristOtologistPhysicianPsychiatrist

(District and countyadministration)

Superin9ndentSuperintendent, AssistantSup ,- -intendant, AssociateSuperintendent, Deputy

Administrative AssistantDirectorDirector, Assistant'

Other Civic Center EmployeeCertificated Consultant'Personnel Progrdm Specialist (Special

Education Included)Recreation Worker'Resource Teacher OtherSpecial Education

.POSItiOn tin fit ,doti in object

III 28

Than

2100 InstructionalAides----

2200 ClassifiedAdministra.iye

H

Position title

Classified Salaries

2300 Clerical AndOther OfficePersonnel

2400 MaintenanceandOperationPersonnel

2500 Food ServicePersonnel

Instructional Aide

Accountant, ChiefBusiness ManagerControllerDirectorGoverning Board MemberPersonnel Commission MemberPurchasing AgentSuperintendentSuperintendent, AssistantSupervisor

AccountantBookkeeperClerkComputer OperatorMachine OperatorSecretarySwitchboard Operator

CustodianCustodians HelperDelivery PersonElevator OperatorFire FighterGardenerGuardMaintenance EmployeeMatronOther Housekeeping PositionTruck DriverUtility Worker GeneralWarehouse Worker

CookDirector (Single site)HelperManagerilutritiomstSupervisor

2600 TransportationPersonnel

2900 Other ClassifiedPersonnel

33

Bus DriverField CoordinatorGasoline Pump AttendantMechanicOther

Building lnspr ":torHealth AideLibrary AideNoon Playground SupervisorRecreation WorkerStudent

6/84

6/S4

Exhibit 111-B

Factor Sheet InformationStep One

Obtain the following from the appropriate local offices:1. Teacher distribution by full-time equivalents (FTEs)2. The number of individual district employees on the payroll by program category3. A.d.a. from J-18-P2 and J-19-P2 enrollment forms, including all programs even

though they may not be required to be reported on these forms (Special consider-ation must be made for enrollment of students in one-period or two-periodclasses.)

4. The square footage of district facilities, including the square footage of roomswithin each location

Maintaining the progression of distribution sheets is essential to the success of theproject.

Step TwoUsing the items listed above, record the appropriate information -as required for

preparing the factor sheets included in this section. On each factor sheet, identify inColumn 1 the programs that are applicable to your individual district. Record the totalsof each individual program in Column 2, with a grand total at the bottom of the column.In Column 3 establish the individual program percentages as they relate to the total.

After you have completed your percentage calculations, you are ready to proceedwith the distribution sheets.

64III- 29

Exhibit 111-B (Continued)

Factor Sheet OneTeacher Distribution

SourcesPayroll, personnel, and accounting records

A check and balance system should be maintained throughout the project to ensureaccuracy.

Expenditures should occur in object account code 1100 and/or 1900.

Programs Total Program FTEsPercent of Total FTEs

by Program

PreformalElementarySecondaryRegional occupational center

or programSpecial day classResource specialistDesignated instruction and

servicesSchool improvement programGifted and talented pupilsMiller-Unruh Basic R,ading

ActStaff developmentECIA, Chapter 1Vocational Education Act

Totals 100 Percent

NotePossible teacher categories are defined in the list given above. Your district mayrequire any or all of these categories, or it may extend beyond them if the appro-priate expenditure category is identified in the "Direct Costs" column of FormJ-41-A.In the event your district operates special education classes with classified per-sonnel, as legally and appropriately defined in the Special Education Master Plan,you must expand your teacher distribution to include the FTE for such employees;e.g., instructional aides or designated instruction and services (DIS). Record staff-ing within major program areas to provide the most effective check and balancesystem; e.g., by location.

Program teachers Percent of total FTEsTotal teacher FTEs

The calculated percentages shown above will be applied to "Distribution SheetSix, Instructional Admidistration" and to "Distribution Sheet Nine, SchoolAdministration.""Percent of Total FTEs by Program," Column 3 listed above X applicable "DirectCosts," Column 1 of Form J-41-A, = "Direct Support Costs."

S5IU 30 6/84

Exhibit Ill -B (Continued)

Factor Sheet TwoNumber of District Employees by Program

SourcePayroll and personnel records auditable to accounting record expenditures

Program Areas Number of Employees

Percent of TotalEmployeesby Program

Preformal education teachers'Instructional administration'Instructional mediaSchool administrationDistrict administration

BusinessSuperintendent and so forth.

MaintenanceOperationsTransportationCommunity servicesFood services

Totals 100 Percent

Note111 Possible employee categories are defined in the list given above. 'low district may

require any or all of these categories, or it may extend beyond them if the appro-priate category is identified in the "Direct Costs" column of Form J-41-A.Include the average number of monthly substitutes and hourly or other temporaryhelp in the appropriate program area; e.g., elementary teacher substitutes. Testpayroll months may be used to establish an average number of nonregularemployees.

Number of employees by program= Percent of total employees

Total number of employees

The calculated percentages shown above will be applied to "Distribution SheetOne, Personnel /Payroll /Negotiations."Percent of Total Employees by Program" x applicable "Direct Costs," Column 1of Form J -41 -A, = Direct Support Costs.

,

6/84 IIi 31

86

Exhibit. Ill-8 (Continued)

Factor Sheet ThreeP2 A.D.A. Distribution

Sources

J-18 elementary, J-18 and J-19 unified, and J-19 and J-19E high school stateattendance reports

Programs A.D.A Percent of Total A.D.A.

Regular a.d.a.Special a.d.a. by category

Totals 100 Percent

NotePossible categories are defined in the list given above. Your district may requireany or all of these categories, or it may extend beyond them if the appropriateexpenditure category is identified in "Direct Costs," Column 1 of Form J. 41-A.Record the 8.8.a. as it applies to program areas in Column 1 of Form J-41-A; e.g.,General EducationPreformal, Elementary, Secondary, and so forth.

Program a. d. a. = Percent of total a. d. a.Total a. d a.

Percent of total a.d.a. by program x applicable "Direct Costs," Column 1, FormJ-41-A, = "Direct Support Costs."Since all students do not generate a.d.a., you may choose to use only enrollmentfor distributing costs.

87HI 32 6/34

Exhibit Ill -B (Continued)

Factor Sheet FourP2 Enrollment

SourceCounty or local monthly district attendance reports correspond with the J-17-P2elementary, J-18-P2 and J-19-P2 unified, and J-19-P2 and J-19E-P2 high schoolstate attendance reports

Programs

Regylar enrollmentSpecial enrollment by

category

EnrollmentPercent of Total

Enrollment

Totals 100 Percent

NotePossible categories are defined above. Your district may require any or all of thecategories given above, or it may extend beyond them if the appropriate category--is identified in "Direct Costs," Column 1 of Form J-41-A.Record the enrollment as it applies to program areas in the Form J-41-A "DirectCosts" column; e.g., General EducationPreformal, Elementary, Secondary, andso forth.

Programenrollment Percent of total enrollment

Total enrollment

The percentages calculated above will be applied to "Distribution Sheet Seven,""Distribution Sheet Eight," and "Distribution Sheet Ten.""Percent of Total Enrollment" by program X applicable "Direct Costs," Column 1,Form J-41-A, = "Direct Support Costs."

Special Education/Master PlanP2 Enrollment

Enrollments of special education students are wired on "Distribution SheetSeven." Complete the percent of total enrollment for special education students only.

Example

Program EnrollmentPercent of Total

Enrollment

Special day classDesignated instructional

services (DIS)Resource specialist (RSP)

Totals 100 Percent

Special program enrollment - percent of total enrollmentTotal enrollment

6/84 88 111-33

Exhibit 111-13 (Continued)

III 34

Factor Sheet FiveSquare Footage Distribution

SourcesFacility blueprints, state CFIS Form 100.2, raw profile data collection, and facili-ties reports

Locations Square FootagePercent of TotalSquare Footage

Square footageclassroomsSquare footageadministrationSquare footagecafeteria

Total Square Feet 100 Percent

Category of square footage Percent of total square footagecategoryTotal square footage

The areas given above may be expanded toiclude the library, audiovisual area, andso forth. However, these costs at the school level will basically become part of the perstudent cost. Therefore, it is important to evaluate time on task and the value derivedthereof.

If the actual square footage is not available, totals can be calculated by using typicalclassroom square footageusually 900 to 950 square feettimes the number ofrooms on site.

Do not include the square footage of the district administrative office facilitiesunless it is allocated to specific programs. The total percent of square feet of thedistrict office facilities used for maintenance and operations, counseling, nursing ser-vices, and so forth would be recorded on a distribution sheet for the purpose ofprorating back to the identified program area. The administrative district facilities' costwould become an indirect cost for the distribution to all programs.

Determine the value of one-fourth room, one-half room, one room, and two rooms.This percentage value can be applied to the teacher staffing by program (see "FactorSheet One"). Assume one FTE classsroom teacher would require five or six periodsper day. The percentage calculation applied would be the value of one classroom; e.g.,ten FTE would require ten classrooms or 10 X the percent calculated for oneclassroom.

Typical classroom square footage = Percent of total square footageTotal square footage . applied for a typical classroom

99 6/114

6/84

6-78569

Exhibit III-B (Continued)

Factor Sheet SixRoom Utilization Instructional Programs

FTE by Program Classrooms RequiredPercent of Total

Information from "FactorSheet One"

Number of FTE or portionthereof equals classroomvalue.

.--..

Grand total percentmust equal Section1, square footageclassrooms.

If your district allows classrooms to be used for other than the regular instructionalprogram; e.g., community use, adult use, and to forth, a total hourly use must beestablished prior to developing the "Percent of Total Classrooms" in Column 3, listedabove.

The following may be used for that purpose:1. Assume six periods a day utilization by teachers x 65 minutes per class period

(includes passing time) = minutes 60 minutes = hours/day/teacher.

Daily hours x total teacher staff x days in teaching year = total teaching hours(see "Factor Sheet One" for teacher FTEs).

2. Yearly teacher hoursPlus recreation civic hoursPlus other yearly hours

Percent of total hours

Percent of total hours

Total classroom hours Percent total

Specific category hours= Percent of total hours

Total classroom hours/year

Apply the percentage by category as determined in item 2 listed above to the percentof facilities used for classrooms.

ExampleProgram Percent of Use

Regular day teachers 91Special day teacher 1

Federal teacher 1

Other 1

Total teaching classroom use 94Civic center use 1

Contracted use 1

Total classroom use 96Administration 3Cafeteria 1

100

90111 -35

V"

Exhibit III-C

111-36

Distribution SheetsForm J-41-A Column 1, "Direct Costs," establishes the total program cost as

requirred for distribution sheets one through five.1. Complete distribution sheets one and two.2. Post the percentage of dollars calculated on distribution sheets one and two to

sheets three, four, and five.3. After completing the steps given above, prepare a matrix and post the applicable

percentage of dollar totais to the appropriate direct cost on distribution sheets sixthrough ten.

4. You have now established your adjusted direct support costs for distribution toColumn 2 of Form J-41-A.

5. Post all costs from distribution sheets one through ten to the appropriate directcost program in Column 2 of Form J-41-A.

6. Add and/or subtract Column 1 and Column 2 of Form J-41-A. The total equalstotal direct costs and direct support costs.

7. The residual costs become indirect support costs.

91 6/114

6/84

Exhibit III-C (Continued)

Distribution Sheet One

General Support

Personnel/Payroll/NegotiationsIdentify the total program cost for personnel/payroll/negotiations included in

Column 1 beside "District Administration" (EDP 400) of Form J-41-A. Apply the calcu-lated percentages from "Factor Sheet Two, Number of Employees by Program" to theidentified program total which then establishes the dollar distribution.

Program Area Percentage Total Support Costs

Regular classroomTransportationMaintenanceOperations

Totals.

100 PercentTotal progrm dollars

Expand or delete the program areas listed above to conform with your district'sindividual needs.

All costs should be added to the appropriate category prior to distribution; e.g.,transportation, maintenance, school administration, and so forth. There should be noresidual program costs; however, personnel/payroll costs, as they relate to districtadministration, will remain a part of the cost of EDP 400.

111-37

Exhibit III-C (Continued)

Distribution Sheet Two

General Support

InsuranceTotal insurance included in "District Administration," EDP 400 (Column 1, Form

J-41-A)(Less transportation insurance)(Less district maintenance)(Less district operations)(Less district office)*Adjusted total to be distributed

Apply "Factor Sheet Five, Square Footage Distribution," percentages to the total.

Program Area Percentage Total Support Costs

Totals 100 Percent Total dollars to bedistributed

Individual programs defined as instructional and operating at the district officerequire insurance costs to be reduced and prorated, based on square footage requiredfor that specific program; e.g., special education, counseling service, or health service,

*The residual cost is the remaining district office insurance,

93Iii 3t4 6/34

Exhibit III-C (Continued)

Distribution Sheet Three

General Suppert

MaintenanceTotal for "Maintenance," EDP 405 (Column 1, Form J-41-A)(Less district maintenance)*Plus insurance ("Total Dollars to Be Distributed" from "Distribution Sheet Two")Plus payroll cost ("Total Program Dollars" from "Distribution Sheet One")Adjusted total to be distributed

Apply "Factor Sheet Five, Square Footage Distribution," percentages to the total tobe distributed.

Program Area Percentage Applied Program Support Dollars

Totals 100 Percent Total dollars to bedistributed

Direct costs for "Maintenance" and "Operations" may be combined and adjusted asappropriately required. Percentage calculations from "Factor Sheet Five" may be ap-plied to the adjusted totals for "Maintenance" and "Operations" for distribution.

The residual cost is the remaining district maintenance.

946/34 111-39

Exhibit III-C (Continued)

Distribution Sheet Four

General Support

OperationsTotal for "Operations," EDP, 410 (Column 1, Form J-41-A)(Less district operations)* \

Plus insurance ('Total Doll s to Be Distributed" from "Distribution Sheet Two")Plus payroll costs ("Total P am Dollars" "Distribution Sheet One")Adjusted total to be distribut\ed

Apply percentages from "Factor Sheet Five, Square Footage Distribution Sheet," tothe total. The cost incurred i identified for the adjusted operations program.

Program Area4

Percentage Applied Pr Support Dollars

Totals 100 Percent Total dollars to bedistributed

.._

"Maintenance" and "Operations\" direct costs may be combined and adjusted asappropriately required. Percentage alculations from "Factor Sheet Five".may be ap-plied to the adjusted totals for "M intenance" and "Operations" for distribution.

*The. residual cost is the remaining district operations.

9111-40

56/$4

Exhibit III-C (Continued)

Distribution Sheet Five

General Support

TransportationTotal Transportation Costs, "Direct and Direct Support Costs," EDP 415 (Column 1,

Form J-41-A)Plus personnel/payroll ("Total Program Dollars" from "Distribution Sheet One")Plus insurance ("Total Dollars to Be Distributed" from "Distribution Sheet Two")Plus Maintenance ("Total Dollars to be Distributed" from "Distribution Sheet Three")Plus Operations ("Total Dollars to Be Distributed" from "Distribution Sheet Four")Total Cost of Transportation

The total should be adjusted to include costs as required, and distribution should becompleted based on the actual expense, as reported on the J-141 and J-141S, statetransportation reports.

The rate per mile method may be used as a primary allocation method. The totalcosts of operating vehicles is divided by the number of miles driven. The costs are nowidentified by the program. Multiply the number of miles times the cost per mile toequal the total cost per activity. Home-to-school costs must be divided by the numberof students served in "Elementary," "Secondary," and "Regional Occupational Centeror Program" categories.

Actual charges for contracted buses are identified and charged to the applicableuser program.

The total dollar value of the J-141 support cost is distributed to "Elementary,""Secondary," or other applicable programs in Column 1, Form J-41-A, EDP numbers110, 115, 120, and 121.

Field trips should be a direct cost to the user program, and the cost is calculated oncompletion of the activity. There is no residual for indirect cost allocations.

6/S4 In -41

96

Exhibit (Continued)

Distribution Sheet Six

Instructional Support

Instructibnal AdministrationTotal direct program costs for "Instructional Administration," EDP 375 (Column 1,

Form J-41-A)Plus general sur cost distribution (from distribution sheets one through five)Adjusted total direct cost for distribution

Apply percentages from "Factor Sheet One, Teacher Distribution."

Program Percentage Total Support Costs

i

Total'

...

100 Percent Total programdollars

Rationale for distribution: "Instructional'Administration" funds are provided for theimprovement of teaching through program leadershi , through guidance and assis-tance to the teaching staff, and through the improve nt of the curriculum and curric-ulum materials used by teachers. It is recommend that there be no residual cost.

9 7111-42 6/84

y

11/64

Exhibit III-C (Continued)

Distributioli Sheet Seven

Instructional Support

Special. Education Master Plan AdmitiistrationThe total direct cost is adjusted for distribution.Specie: Education Master Plan Administration shall be computed separately and shallbe reported as a portion of the total "School Administration," EDP 385 (See "Distribu-tion Sheet Nine," EDP 385.)

Secure special education enrollments from "Factor Sheet Four, P2 Enrollment"(special calculation).

Program Percentage Total Support Costs

Totals ......) 100 Percent Total programdollars

Rationale for distribution: Special education administration serves only those stu-dents enrolled in special programs; therefore, costs are distributed as support to EDPnumbers 200, 210, 220, and 230.

98 111-43

Exhibit 111-C (Continued)

III-44

Distribution Sheet Eight

Instructional Support

Instructional MediaTotal direct program costs for "Instructional Media," EDP 380 (Column 1, Form

J-41-A)Plus general support cost distribution (from distribution sheets one through five)Adjusted total direct cost for distribution

P pply the percentages from "Factor Sheet Four, P2 Enrollment."

Program Percentage Total Support Costs

Totals 100 Percent Total programdollars

Rationale for distribution: Instructional media programs directly affect all studentsenrolled. It is recommended that there be no residual costs.

Recommendation: The work order method should be used throughout the year todebit the requesting program and to credit the appropriate media program for mediamaterials that become classroom supplies. This method allows expenditures and/ortransfers to be completed prior to the end of the fiscal year. The remaining media costsare those costs that relate to the total student population.

99 6/114

Exhibit 111-C (Continued)

Distribution Sheet Nine

Instructional Support

School AdministrationTotal direct 'program costs for "School Administration," EDP 385 (Column 1, Form

J-41-A)Plus general support cost distribution (from distribution sheets one through five)Adjusted total direct cost for distribution

Apply percentages from "Factor Sheet One, Teacher Distribution."

Progrwn Percentage Total Support Costs

Totals 100 Percent Total programdollars

Rationale for distribution: School administration involves those activities that dealwith administrative responsibility for a single school or for several schools, but not fora district. School site administrators provide for the direct supervision and evaluationof staff members who are coordinating an effective program that provides services tostudents by way of teacher effectiveness. It is recommended that there be no residualcost.

1006 /$4 U1-45

Exhibit 111-C (Contitued)

Distribution Sheet Ten

Instructional Support

Pupil ServicesTotal direct program costs for "Pupil Services," EDP 395 (Column 1, Form J-41-A)Plus general support cost distribution (from distribution sheets one through five)Adjusted total direct costs for distribution

Apply percentages from "Factor Sheet Four, P2 Enrollment."

Program Percentage Toted Support Costs

Totals

11111117111MMIMMIIIMMINMPIM,

100 Percent Total programdollars

Rationale for distribution: Pupil services provite direct assistance to the student forimprovement of attendance, welfare, guidance, counseling, and health. There are noresidual costs.

111111-46 6/114

Part IV

Supplies, and Capital Outlay, Including equipment,Sites and Improvement of Sites, Building

F;xtures, and Service Systems

Some of the most perplexing problems in schoolaccounting are those of distinguishing betweensupplies and equipment; between, equipment andimprovement of grounds; and between equipment/building fixtures and service systems. Nevertheless,in accounting for school expenditures, districtsmust correctly identify each expenditure if thenecessary uniformity of accounting is to be main-tained.

Whether an item should be considered as equip-ment or as supplies can be determined on the basisof the length of time the item is serviceable and onits contribution to the value of the plant. Forexample, supplies are constantly being consumedand replaced without increasing the value of thephysical properties of the school district. Equip-ment has relatively permanent value, and itspurchase increases the value of the physical proper-ties of the school district.

Expenditures for equipment, improvement ofsites, building fixtures, and service systems areusually charged as capital outlay; those for sup-plies, as current expense. The original purchase ofequipment or of additional equipment either as adirect purchase or lease purchase must be recordedin object classification 6400, Equipment. Expendi-tures for piece-by-piece replacement of equipmenteither as a direct purchase or lease purchase mustbe charged to object classification 6500, EquipmentReplacement.

In accounting for expenditures, all school dis-tricts must use the same plan for making therequired decisions. This plan must contain clearlystated criteria regarding the distinguishing featuresof the items to be accounted for; that is, criteriathat can be used in determining correctly thedisposition of the charges to accounts.

6/34

Criteria for Distinguishing BetweenSupplies and Equipment

Supplies are items of an expendable nature thatare consumed or worn out, deteriorate in use, orare easily broken, damaged, or lost.

Examples: paper, pencils, cleaning materials,nails, scissors, test tubes, thumb-tacks, and keys

Items that have a relatively short service life (lessthan two years) and, therefore, must be replacedfrequently are charged as supplies.

Examples: brooms, chamois, and rubberstamps

Repair parts for buildings, equipment, andgrounds, regardless of cost, if purchased for use bythe district, must be charged as supplies.

Examples: plumbing fixtures; compressors, ifpart of a larger unit; bus transmis-sions; engines; timer devices forsprinkling systems.

Some articles clearly do not belong to either ofthe two preceding groups. They have the character-istics of equipment but they have a low unit costor are frequently lost, broken, or worn out andreplaced in normal use. To obtain uniformity, theclassifier should assign items to the various classifi-cations on the basis of the answers he must give tothe questions in the following list. If the answer toany one of these five questions is yes, the itemshould be classified as a supply item, and theexpense should be recorded under the object sub-classifications within 4000, as appropriate. If allanswers are no, the item should be classified underobject classification 6400, Etpdpment, or 6500,Equipmatt Replacement.

-102

Computer software shall be classified as suppliesor equipment on the basis of the criterion that if anyof the five listed questions is answered yes, then thesoftware should be classified as a supply item; but ifall the answers are no, then the computer softwareshall be classified as equipment.

I. Does the item lose its original shape andappearance with use?

2. Is it consumable, with a normal service life ofless than two years?

3. Is it easily broken, damaged, or lost in normaluse?

4. Is it usually more feasible to replace it with anentirely new unit than to repair it?

5. Is it an inexpensive item, having the character-istics of equipment? Does the small unit costmake it inadvisable to capitalize the item?

Criteria for Identificationof Capital Outlay

Capital Outlay expenditures are those that resultin the acquisition of capital assets or additions tocapital assets. They are expenditures for sites;improvement of sites; buildings; improvement ofbuildings; building fixtures; service systems; andpurchase of initial or additional equipment.

EquipmentEquipment includes movable personal property

of a relatively permanent nature and/or of signifi-cant value.

Examples: Furniture, machines, musical in-struments, and vehicles

NOTE: Nonconsumable articles generally classifiedas supplies should be classified as equipment if theyare purchased to start or expand materially theequipping of a school, classroom, library. or otherfacility. If equipment is constructed by districtemployees, the cost of the materials and labor as wellas indirect costs should be recorded as the total costof the item produced (See Note following classifica-tion 6500, Part Ill.)

Equipment must be recorded under object classifi-cation 6400, Equipment, or 6500, EquOment Replace-ment.

New Sites and Improvement of SitesNew Sites and Improvement of Sites includes

acquisition of land, improvement of new and okisites and adjacent ways, and acquisition of physicalproperty of a permanent nature attached to land

Examples: land, curbs, grading, playgroundsurfacing, retaining walls, side-walks, storm drain systems, land-scaping, driveways, parking lots,fixed playground apparatus, andflagPoles

New sites and improvement of sites must berecorded under object cbssification 6100.

Buildings

Buildings includes the construction or purchasecost of new buildings and additions, includingadvertising costs, architectural and engineeringfees, blueprints, inspection, tests and examinations,demolition, the razing of existing obsolete or oldbuildings to clear sites for new buildings, buildingfixtures and service systems, and any other expen-ditures directly related to the construction oracquisition of buildings.

Buildings must be recorded under object classifi-cation 6200.

insprovanestt of Buildings

Improvement of Buildings includes alterations,remodeling, renovations, and replacement of build-ings in whole or in part. Improvements include thereplacement of an existing building unit or con-struction of an improved or superior unit, usuallyresulting in a more efficient or longer-layingproperty. Significant improvement should be con-sidered as capital outlay expenditures.

Improvement of buildings must be recordedunder object classification 6200.

Beading FixturesBuilding Fixtures include attachments to build-

ings that are not subject to transfer or removal,presumably function as an integral part of thebuilding, and have a fairly long and useful life.Such fixtures are generally accepted as real pro-perty and lose functional identity as separate units.

Building fixtures must be recorded under objectclassification 6200.

Service SystemsService Systems include any parts of a building

that are intended to serve a single functionthroughout the building; are usually included as apart of the original construction or subsequentlyadded in whole or in part; are built as an integralpart of a building; and are expected to have a long

and useful life. Such systems are generally acceptedas real property and lose identity as separate units.

Examples: intercommunication systems orair-conditioning systems

Criteria for Identification of BuildingRatans and Service Systems

The following criteria provide a uniform basisfor the identification of building fixtures andservice systems. To be classifi ed as either a buildingfixture or a service system, an item must conformto five criteria:

I. The item is attached permanently to thebuilding.

2. The item functions as part of the building.3. Removal of the item results in appreciable

damage to the building or impairs the de-signed use of the facility.

4. The item is generally accepted as real prop-erty (not personal property).

5. The item loses identity as a separate unit.Service systems must be recorded under object

classification 6200.

1Purchase, Rental, Lease, or Lease with Option to Purchase

Fixed assets can be acquired by purchase, rental,lease, or lease with option to purchase. Theseacquisitions are accounted for as follows:

Purchase of a fixed asset is charged 3.; any otherpurchase for which title passes upon receipt ofpayment.

Rental of a fixed asset does not increase the assetsof the district and therefore is not charged to a capi-tal expenditure account. Rentals are charged to5600--Rentab, Leases, and Repairs. Exception: Ifequipment is rented for a specific capital outlayProject (e.g., a tractor for a major landscaping proj-ect), the amount paid should be added to that projectas a capital expenditure.

Lease of a fixed asset is usually fora period of oneyear or more. Title does not pass to the district, andcharges are to 5600--Rerd4s, Leases, and Repairs.

Lease with option to purchase a fixed asset ischarged to the appropriate subclassification underobject classification 6000 Capital Outkry.

List of Supplies, Equipment, Improvement of Sites,Building Fixtures, and Service Systems

The letters after the items in the following listof items classified as supplies, equipment, improve-ment of sites, building fixtures, or service systemsare to be interpreted as having the followingmeanings:

E = EquipmentS = SuppliesI = Improvement of SiteBF = Building FixturesSS = Service SystemsThe following list is only a guideline, and

individual items must be given consideration,depending on the district's answers to the fivequestions relative to cost, life, and repairability.

Many of the items listed as equipment wouldhave to be considered as materials for the improve-ment of sites if they were attached to the land;building fixtures if they were attached to thebuilding; or service systems if they were integralparts of such systems.

AbrasivesSAbsorbent cotton -SAccount booksSAccounting forms -SAccounting machines -E

6/14

If an item cannot be found in the list, anotheritem of similar nature can be found and the sameclass used for both items.' in some instances theitem must be identified by associating it with oneof the general classes of items included in the list.For example, the item can be identified byassociating it with one of the following classes ofsupplies: chemicals, cloth, clothing, compounds,dishes, drugs, food, games, glassware, machines(small hand), medicines, paint, parts (repair), sta-tionery, tableware, tools (hand, not in sets), andutensils; or by associating it with one of thefollowing classes of equipment: apparatus, appli-ances (household), cabinets, furniture, implements(farm), livestock, machines (large), tool sets(hand), and tools (power).

2An additional source is Handbook II (Revised, -Hamada!Accounting aossifielnion and Standard Ternsiolosy for Load andState School Systems. Washington. D.C.: Office of Education, U.S.Department of Health, Education, and Welfare, 1973.

Acetylene SAchievement tests SAcids ---S

Adding machine ribbonsSAdding machine tapesS

104

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1V-3

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casement -EAir gauges, tire -SAir hoists- EAlbums SAlcohol-SAlidades, telescopic-EAlignment gauges, camber,

toe-in- EAmmeters EAmmonia SAmpules -SAnatomical charts -SAnatomical models -EAndirons--EAnemometers --EAnesthetics -SAniline dyes -SAnimal boxes-SAnnunciators -EAntifreeze -SAntiseptic gauze --SAntiseptics-SAntitoxins -SAnvils -EApparatus cabinets-EApparatus, medical, scientific,

electronic, photographic,arc- welding -E

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measure -SArmature growlers -EArrows-SArt canvases 0Art crayons -SArt erasers SArt paints -S

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capped persons --SAutomobile defrosters--SAutomobile fuel tanks-SAutomobile heaters-SAutomobile lifts-EAutomobile signals SAutomobile tires and tubes- -SAutomobiles -EAwards-SAwls-SAwnings, fixed-BFAwnings, removable -EAxes --SRabbit metal-SBackboards, indoor, fixed -BFBackboards, outdoor, fixed-IBackboards, portable-EBackstops, fixed-IBackstops, portable -EBadges-SBadminton rackets- SBags --SBaking pans-SBaking powder--SBaking soda-SBalances, beam--EBalances, small spring- SBaling presses, compression

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6/847-78569

BlowersEBlowpipesSBlueprint vsachinesEBlueprint paper --SBluingSBoards, breadSBoards, bulletin, fixed --BFBoards, bulletin, portable --EBoards, carromSBoards, checkerSBoards, drawingSBoards, emerySBoards, gamesSBoards, boning --EBoards, ironing, built-inBFBoards, lumber --SBoards, mounting ---SBoards, sandwich --SBoards, washSBoats or canoesEBobbins ---SBodiqs, bus- -EBodiqs, truckESBo cleaners --SBoiler compounds ---SBoiler firing tools ---SBolt cutter - -SBoltsSBond paper - SBook cardsSBook jacketsSBook pockets --SBook recordsSBook stacksEBook bucksEBookbinding machineryEBookcases, portable ---EBookcases, sectionalEBookclothSBookcovenSBookends ---SBookkeeping forms --SBookkeeping InachinesEBookplatesSBooks --SBooks, cash --SBooks, compositionSBooks, libraryE

106

Books, looseleaf note --SBooks, recordSBooks, textSBootsSBoring machines, precision, table

or vertical types ---EBottle syphons --SBottlesSBowling alley pins --SBowlsSBowls, water closet --SBows, archerySBox tiles, cardboardSBoxesSBoxes, electricalSBoxing glovesSBoxing rings, completeEBoyle's law apparatus,

complete unit EBrake lining - -SBrake lining machinesEBrakes and folders, hand or

powerEBrakes, complete replacement units --SBrass polishesSBrass rodsSBrass sheetsSBread knives --SBread pansSBread slicers, mechanical --EBread toasters, electricEBreadboardsSBreakers, circultSBricksSBridges, wheatatone and

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Chemicals-5Chemistry glassware --SChemistry rubber goods-SChimes, Mme--EMimes, small --SChinaware --SChisels, in sets --EChisels, not in sets-SChoppers, food, hand-operated-SChoppers, food, power --ECircuit breakers --SClamps --SClay-SClay modeling tools ---SCleaners, fltse-SCleaners, steam vapor-ECleaners, vacuum --ECleaning compounds --SCnometers, photoelectric --EClippers, electric --EClippers, land- -SClips ---S

Clock systems, program,electric-SS

Clocks, desk -SClocks, wall -ECloth --SCloth binding-SCloth cutting machines--ECloth nets --SClothes baskets-SClothes brushes ---SClothes dryers-EClothes hooks --SClotheslines --SClothespin.s-SClothing-SClutch rebuilding apparatus-ECoat hangers- SCoat hooks-SCocoa mats --SCoffee cans --SCoffee grinders-ECoffee percolators, electric-ECoffee pots-SCoffee urns-ECoin, currency, and :,..heck

handling machines-EColanders -S

6/114

Collapsible tables- -EColored pendls-SColorimetrn-EColotbv4 dYes-S

bins -E -

Combs-SCombustion analyzers --E

Companies, blackboard -S.Compasses, drawing- --SCompasses, magnetic --ECompasses, magnetic, pocket-SCompounds-SCompressed air-SCompressors, air-ECowin:tins madvines-ECondensers, electronic-SCondensers, ignition

distribution --SCondiments --SConduit boxes-SConduits and fittings-SConnecting rod alignen-EConnecting rod boring

machines-EConnecting rod rebabbiting

jigs --EConnectors, wire --SConstruction paper --SContainers-SConveyors --ECookers, pressure-ECooking stoves-ECooking utensils -SCoolers, water --ECoping saw blades-SCopper-SCoppers, soldering- -S

Copyholden-SCord --SCords, electric-SCores, valve --SCork-SCorkscrews-SCornices, metal --S

4.4 fluid, stencil SCo es-SCorrugated paper--SCostumen-E

108

Costumes, theatrical --SCots-ECotter pins ---SCotton, absorbent -SCotton gauze --SCouches-ECounter freezers-ECounters, fixed-BFCounters, revolution and

broke --SCountersinks --SCouplinSs-SCoveralls-S'Covers --SCrayons --SCrockery-Shocks --SCoss-section pape -SCnscibles -SCrude oil--SCrushed rock-SCrystals, watch-SCues, carrom-SCultivaton-ECulverts, sheet metal -SCup hooks-SCupboards-F.Cups- -S

Cups, grease -SCurbs-ICurling irons - -S

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IV-7

Dampers --SDate stamps --SDaters-SDating machines --EDecorations-SDeep fat fryers --EDeep freezes --EDental abrasive points-SDental benches-EDental' cabinets-EDental chairs-EDental charts --SDental drilling apparatus-EDental drills-SDental instruments, small -SDeodorizers --SDesk blotters -SDesk lamps-SDesk letter baskets-3Desk pads-SDesks-EDevelopers, photr,graphic-SDeveloping tanl,. -SDextrin SDextrose --SDiaries-SDictating machine cylinders,

discs, and tapes -SDictating machines EDictionaries, abridged-SDictionaries, large

unabridged -EDictionary stands ---EDies, in sets--EDies, not in sets -SDiesel engines, integral

parts of larger units -SDiesel engines for use in

classrooms -EDiploma covers--SDiploma ribbons--SDiploma seals -SDiplomas-SDiscs, optical-EDiscs, phonograph-SDish brushes --SDish cloths- SDish pans -SDish trucks-E

IV-8

Dishes-SDishwashers, fixed-BFDishwashers, portable-EDisinfectants-SDispensers, soap ---S

Display cases-EDisplay mounts-SDissecting sets-S

water-SDistilling apparatus-EDistributor boxes --SDisttibutors-SDitto machines --EDividers --SDollies-5Dollies --SDolls-SDoonnats-SDoors-SDowels-SDrafting instruments ---SDrafting machines-EDraglines-SDrain cleaners-SDrain pans --SDrain plugs ---SDrain plungers-SDrain tile-SDrainpipe flushers-SDrapery-BFDrapery cloth-SDrawing boards --SDrawing compasses-SDrawing instruments-SDrawing paper -.SDrawing pens --SDrawing,tables-EDressers, emery wheel-SDressings, belt- -SDrier, ink-SDrier, paint--SDrier, varnish--SDrift meters--EDrift pins, all sizes-SDrill bits-SDrill points-3Drill presses, bench, floor,

or radial-Ehand --S

1 0 9

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electric or ice -EDriveways-IDrugs --SDrums, bass, kettle, snare-EDrums, fiber --SDrums, metal --SDrums, other than musical -SDry cells-SDry measures-SDryeis-EDryers, clothes-EDryers, hair-EDrygoods-SDrying units, infrared-EDumbbells-SDuplicating machine brushes-SDuplicating machine ink- -SDuplicating machine paper-SDuplicating machine parts ---SDuplicating machine rolls-SDuplicating machines-EDustcloths-SDusters --SDustpans- SDyes ---SEarthenware -SEasels, large-EEasels, small - -SEdge tools, except cutting

dies --SEdgers, lawn --EEducational tests-SEggbeaters, electric -EEggbeaters, hand- SElastic --SElectric batteries SElectric clippers, sheep,

horse-EElectric cords --SElectric dishwashers- EElectric floor scrubbers- EElectric fuses-SElectric hot plates --EElectric irons --EElectric lamp bases-SElectric light bulbs-SElectric mixers-E

6/84

Electric sanding machines-EElectric switches-SElectric toasters-EElectric tube testers --EElectric vacuum,deaners-EElectric waxing ;machines-EElectric welding apparatus-EElectric wires-SElectrical boxes --SElectrical systems-SSElectrodes --SElectrolysis apparatus --EElectromagnets, laboratory-SElectronic components-SElectronic deviation meters-EElectronic frequency meters-EElectronic power supply and

voltage, regulatois -EElectronic recording devices,

graphical and visual-EElectronic tubes-SElectronic volt-ohnuneters-EElements, battery-SEmbossers-E

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larger units-SEnlargers-EEnvelope sealers - -EEnvelopes-SEpsom salts--SEradicator, ink-SErasers, electric --EErasers, hand --SExhibit cases-EExposure meters, camera --E

6/114

Extensometers-EExtinguishers, fire-EExtractors-E

, Extracts-SEye charts-SEyelets-SFabrics-SFace and eye shields-SFaces, archery-SFalling weight rammers -EFans, electric, portable -,

Fasteners-SFasteners, apparel-SFaucets, combination or single-EFeldspar-SFelt-SFences-IFencing foils-SFerrules-SFertalizers-SFiber rod-SFiber sheets --SFiber tubes-SFiberboard-SFigures, geometrical, models,

in sets-EFile boxes-SFile cards --SFile folders-SFlits, wood and metal working --SFiling cabinets ---EFiling machines-EFdings-SFillers, battery-SFillers, ink SSFillers, paint --SFillers, wood-SFilm-SFilms, motion picture -EFilms, photographic-S

Filter paper-SFilters, small --SFingers, rubber ---SFilmstrips-SFirearms--EFire axes-SFire extinguisher refills-S

110

Fire extinguishers --EFire hooks -,SFire safety systems-SSFire shovels-SFire tongs-SFireplace fixtures-EFittings, lubrication-SFirst aid kits --SFlagpole bases-IFlagpoles-IFlags,Flags, canal --SRashlights-SFlasks-SFlatirons, electric-EFlavorings -SFlaxxed-SFlexible cord sets --SFlexible metal hose-SFlexible metal tubing --SFloats, hydrometer-SFloats, plumbing-SFloodlights, portable-EFloor covering, wall -to-wall-BFFloor oil-SFloor scrubbers, electric --EFloor waxes-SFlour-SFlower bulbs --SFlowerpots --SFlowers-SFlue cleaners-SFluorescent lamps-SFluorescent starters-SFluoroscopes-ERushers, drainpipe--SFlush valves-SFlux-SFly Sys -SFolders-3Folding chairs-EFolding tables --EFood --SFootball dummies, tackling-SFootball shoes-SFootball uniforms-SFootballs --SForceps --SForges-E

Forks, silverware --SForks, spading-SForks, tearing -SFormaldehyde --SForms, dress-EForms, geometrical, model;

in sets-EForms, printed-SFoundry machinery --EFrames, blueprint -EFrames, door-SFrames, mirror --SFrames, ophthalmic-SFrames, picture-SFrames, saw-SFrames, window --SFreezers -EFreezers, ice cream-EFrequency meters-EFriction tape ---SFruits-SFuels-SFumigants -SFumigators ---SFungicides -SFunnels-SFurnaces-EFurnaces, heat treating --EFurnaces, laboratory -EFurnaces, remelting, type

metal- -EFurniture -EFurniture polish -SFuses -SGages, tire-SGalvanometers- EGalvanoscopes -EGames--SGarbage cans -SGarden hose-SGarden tools-SGarments --SGarnet paper -SGas compressors - -EGas cylinders-EGas mantels ---SGas meters, laboratory type -EGas plates - -EGas stoves-E

Iv-10

Gases-SGaskets-SGasoline-SGasoline dispensing pumps,

electric-EGasoline dispensing pumps,

hand operated-SGates-IGauges, alignment, cambers,

toe-in-EGauges, tire-SGauze-SGear cutting machines-EGears --SGelatin-SGelatin duplicators-EGelatin pads-SGenerators, integral parts

of larger units-SGenerators, not integral parts

of larger units -EGeographic globes, large

stand type-EGeographic globes, small

desk type-SGlass -SGlass, watch ---SGlass cutters-SGlass wool --SGlasses, drinking-SGlasses, magnifying-SGlasses, ophthalmic -SGlassware-SGlaze ---SGlides-SGlobes, electric light -SGlobes, geographic, large

stand type-EGlobes, geographic, small

desk type- -SGloves, rubber ---SGlue --SGlycerin-SGoalposts -1Goggles-SGrading-IGraduated measures -SGraph paper-SGraphite-S

111

Grass seed-SGrass shears, hand operated-SGrass shears, power operated -EGrates, stove --SGravel --SGrease-SGrease guns, air, gun only -SGrease guns, hand-SGrinders, coffee-EGrinders, hand operated-SGrinders, power operated-EGrinding compounds -SGrinding wheels- --SGroceries-SGrowlers, armature --EGuards, arm ---SGuards, lamp-SGuards, shin-SGummed cloth --SGummed figures-SGummed labels-SGummed seals --SGummed tape-SGuns, starting-EGym shoes-SGypsum --SGyroscopes-EHacksaws ---SHair clippers, electric-EHair clippers, hand-SHair dryers-EHairpins ---SHall trees --EHammers, autobody, pneu-

matic--EHammers, ball peen -- -SHammers, electric, hand -EHammers, light forged- -SHammers, power- EHammers, sledge -SHampers --SHand bags-SHand saws-SHand stamps-SHand tools, in sets -EHand tools, not in sets-SHand tools, power driven,

pneumatic and electric- EHand trucks --E

b/S4

HandballsSHandbooksSHandlesSHandscrews, wood and ironSHangers, clothingSHangers, hardwareSHardwareSHarnesses EHarrowsEHat blocks ---SHatchetsSHeadlightsSHeatersEHeaters, portableEHeating padsSHeating systemsSSHectographsEHemp fibre ---SHingesSHoes, gardenSHoistsEHoists, electric or pneumatic --EHolders, blotter --SHolders, changeSHolders, copySHolders, dictionaryEHooks ---SHorizontal bars, portable- -EHorns, motor vehicleSHorsesEHorses, gym equipment --EHorseshoesSHose, apparelSHose, flexible metal -SHose, garden SHose clamps ---SHose nozzles -SHot plates -EHot water bottles --SHurdlesEHydraulic jacks, garage typeEHydrometer floats SHydrometersSHygrometersSHypodermic needlesSHypodermic syringesSIceSIce bagsSIce cream cabinets, ice or

electricE

e /$4

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electricalEInstruments, surgical, smallSInstruments, surveyingEInstruments, testingEInsulatorsSIntelligence testsSIntercommunication systemsSSInterferometersEInterval timersSIodine SIodoforrnSIron filingsSIron gauze SIroner/1EIron, sheet --SIron wedgesSIroning boardsSIrons, electricEJackets, bookSJacks, garage type, hydraulic--EJacks, mechanical --SJarsS

112

Jointcn EJoints, plumbing -SJuice extractors, electricEJump standards --EKerosene --SKettlesSKey racks ---EKey rings --SKeysSKeyboards, piano, paperSKeyhole sawsSKilns --EKitchen tablesEKitchen utensilsSKits, first aidSKnee padsSKnivesSLabels --SLaboratory balances, beamELaboratory fittings, plumbing --SLaboratory furnitureELaboratory glasswareSLaboratory models --ELaboratory mounts --SLaboratory tools, small handSLacingSLacquersSLactoseSLadders, large --ELadders, smallSLadlesSLagserewsSLamp basesSLamp bulbs -SLamps ---ELamps, desk --SLamps, drafting table -SLamps, electric floor --ELandscapingILantern slide cabinetsELantern slidesSLanten iS 1LathesELathes, braki drum --ELathes, hark, or automatic

screw mlachinesELathes, wood turningELaths --SLawn mowersELawn rollersE

IV-11

Lawn sprinklers, movable -SLawn sprinklers, traveling --ELawn sprinkling systems -ILawns-ILead-SLead pencils ---SLead, red-SLead, slug and rule casting

machines, elrod- ELeather-SLeather briefcases --SLeatherworking tools, hand-SLectems-ELedgers-SLenses-SLetter baskets--SLetter files-SLetter openers- SLetter scales -SLetterheads --SLettering pens-SLetterpresses-ELevels, precision machinist's --SLevels, small or carpenter's --SLevels, surveying --Elibrary books ---Elibrary furniture-ELibrary trucks-ELifts, vehicle-ELight bulbs --SLight globes-SLight systems-SSLighting units, blueprinting-ELime-SLine =ten, large push type- -ELine markers, small-SLinens-SLiners, staff, music --SLiners, type-SLining, brake ---SLining, cloth --SLinoleum-SLinotype metals-SLinotypes -ELinseed oil -SLiquid bronzing-SLiquid polishes-SLiquid soaps-SLitmus paper --S

1V-12

Livestock-ELoam-SLocker, built -in-BFLockers, movable --ELocknuts-SLocks, small, not built -in -SLooms -ELooseleaf binders --SLooseleaf notebooks-SLubricants-SLubricating oil -SLubrics"111 fittings --SLugs, soidering-SLumber -SMachine tools-EMachinery, canning-EMachinery, cement- making --EMachines, adding --EMachines, addressing-EMachines, billing -EMachines, bookkeeping --EMachines, brake lining-EMachhies, calculating -BMachines, check handling-EMachines, coin handling --EMadrines, coin operated-EMachines, dating, power-EMachines, dating, small hand-SMachines, dictating-EMachines, dishwashing-EMachines, drafting --EMachines, drycleanhtg-EIelachhres, duplicating-EMachines, huge-EMachines, laundry-EMachines, mimeograph-EMachines, mixing -EMachines, numbering, power-EMachines, numbering, small

hand --SMachines, polishing- -EMachines, pressing-EMachines, sanding-EMachines, scrubbing-EMachines, sewing-EMachines, small, hand-SMachines, stamping, power-EMachines, stamping, small

hand-S

113

Machines, tabulating -EMachines, washing --EMachines, waxing-EMagazine covets -SMagazine racks, large stand --EMagnets, laboratory -SMagnifying glasses --SMail boxes-SMallets-SManicuring tools -SManila files --SManila folders-SManila rope-SMap tracks-SMaps, large--EMarkers, line, large push-type-EMarkers, line, small-SMatches-5Matrix, type --SMats, door and bath --SMats, gymnasium, tumbling,

wrestling-EMattocks --SMattresses-SMauls --SMeal-SMeats-SMechanical drawing instnunents-SMechanical, pencils --SMedals-5Medical instruments, small-SMedicine balls-SMedicine cases-EMedicines --SMegaphones-SMemo books --SMending materials --SMesh, steel wire --SMetabolism apparatus -EMetal polishes-SMetal working machinery-EMetal working tools, small,

"hand operated --SMetals, die casting-SMetals, laboratory --SMetals, linotype-SMeter sticks-SMeters, watt, laboratory type --E

0114

Microfilm readersand ,warsfor office use- -E

Micrometers, in sets --EMicrometers, not in sets -SMicroprojectors-EMicroscopes ---EMilk cans-SMilking machines-EMilliammeters-EMilling machines, bench or

floor-EMillivoltmeters-EMimeograph machines-EMimeograph paper -SMineral wool-SMina*, laboratory-SMinute`bmks-SMirror frames --SMirrors, large wall-EMirronk, small-SMitre bcxes-EMixers, eketric-EModeling c`lay-SModeling tools-SModels, dress --Ei Models, shop and laboratory--EMolding, metal -SMop pails --SMop trucks-EMop wringers - -SMops -SMortar-SMortisers-EMoss ---S

Motion picture cameras-EMotion picture films --EMotion picture projectors --EMotor analyzers-EMotor generator sets ---EMotor vehicle parts-SMotor vehicles-EMotorcycles-EMotors, integral parts of

- larger units-SMotors, not integral parts of

larger writs --EMounting boards-SMousetraps --SMowers, lawn-E

Mucilage --SMultimedia sets --SMusk stands -EMusk, sheet --SMusical instruments-EMuslin --SMustard-SNail polishes-SNails --SNapkins-SNapkins, sanitary-SNeatsfoot oil- -SNeedles --SNeedles, hypodermic-SNegative racks -SNegative tanks --SNets, cloth --SNets, steel-ENewspapers-SNibbling machines-ENickel polishes-SNoise and field strength

meten-ENotebook covers-SNotebooks-SNotebooks, stenographers-SNozzles, hose-SNumbering machines, power-ENumbering machines, small

hand --SNuts-SOakum --SOurs --SOffice composing machines,

Varitypes-EOffice furniture -EOhmmeters -EOil-SOil ClUIS -SOilcloth -SOintments --SOleomargarine-SOpeners, letter -SOphthalmic frames-SOptical discs --EOrgans-EOsdllators-EOsdllographs-EOsdlloscope-E

114

Outlets, electrical-SOutline maps-SOutput meters-EOvens --EOvenware dishe3- -SOxygen-SPacking-SPadding-SPadlocks-SPads, chair --SPads, desk ---SPads, ink ---SPads,. stamp-SPads, typewriter-SPads, writing-SPails -SPaint drier-SPaint remover-SPaint spraying outfits-EPaintbrushes-SPaints-SPalettes-SPamphlets-SPans, large-EPans, small-SPantographs-SPaper-SPaper clips --SPaper cups --SPaper cutters --EPaper fasteners-SPaper napkins-SPaper punches-SPaper towels --SParaffin-SParts, automotive-SParts, radio, resistors, tubes,

transformen-SParts, repair-SPaste --SPaste brushes-SPasteboard-SPasteboard boxes --SPastries-SPastry cutters -SPatching compounds ---SPatterns-SPaving-IPeat moss-S

IV-13

Pexters, electrical -EPeelers, hand-SPen points-SPencil sharpeners-SPencils --SPencils, mechanical-SPenetrometers, soil-EPenholders --SPenknives-SPennants-SPens-SPercolators, coffee, electrlc-EPerforators, large-EPerforators, small ---SPeriodicals-SPermanent waving machines-EPestles --SPhonograph needles - --SPhonograph record albiims-SPhonograph records --SPhonographs-EPhotocopying apparatus --EPhotoelectric cell --SPhotoengraving apparatus --EPhotograph mounts-SPhotographic lenses --SPhotographs-SPhotometers -EPiano parts-SPianos-EPicks --SPicture frames-SPicture wire-SPictures, small-SPictures, wall, large -EPigments-SPillows-SPing -gong sets-SPinking shears -SPins -SPipe-SPipe dies, in sets-EPipe dies, not in sets-SPipe fittings- SPipe, steel-SPipettes-SPiston rings--SPitons -SPitchers-S

IV-14

Pitch pipes ---SPitchforks-SPlane cutters-SPlaners, power-EPlanes, hand --SPlaning machines, photo-

engravers-EPlaques, permanent -EPlarbameters-EPlaster --SPlaster, adhesive-SPlastic wood-SPlate glass-SPlates-SPlates, addressing machine-SPlates, battery-SPlates, bench-EPlates, book-SPlates, hot-EPlates, lantern slide-SPlates, photographic --SPlatforms-E

Posts, fixed-IPot cleaners-SPotato peelers, large,

macitine-EPots, large --EPots, small-SPottery --SPowders-SPower sprayers and dusters-EPreservatives-SPresses, arbor-EPresses, book, bookbinders-EPresses, cylinder, flat bed,

printing-EPresses, engraving --EPresses, letter --EPresses, lithographic or offset

printing- -EPresses, mechan*-EPresses, power --EPresses, punch, foopower-EPressure cookers --E

Playground equipment, fixed-I Printed materials --SPlayground equipment, movable- printing camas --EPlayground surfacing-I Printing frames -EPliers-SPlows, field-EPlows, snow- -EPlugs, drain-SPlugs, spark-SPlumbing and heating valves --SPlumbing fixture fittings

and trim --SPlumbs --SPlungers, drain --SPockets, book-SPointers --SPoints, drill --SPolarimeters -EPolariscopes-EPoles --SPoles, climbing-SPoles, vaulting, bam*--SPoles, vaulting, metal --EPolishes --SPortfolios, leather-SPostal meters-EPosters --SPosts-S

115

Printing ink- -SPrinting materials --SPrinting presses-EPrinting sets, rubber-SPrinting type --SPrisms --SProjectors --EProtectors, check-EProtractors-SPnmers, hand --SPruners, power --EPsychrometers-SPublic address systems,

installed -SSPublic address systems,

portable-EPulleys -SPumice-SPumps, large-EPumps, small ---SPunches-SPunches, electrical --EPush buttons-SPushcarts-E

6/14

',fly,PyrometersEQuivers, arrowSRackets, badminton --SRackets, tennisSRacks, bicycle, fixedIRacks, bicycle, portable --ERacks, large standERadio receiving sets --ERadio transmittersERadio tubes --SRadios --ERaffiaSRagsSRakes, gardenSRakes, window ---ERams, hydraulic --ERanges, cooking --ERaspsSRattanSReamersS

'3 ReceptaclesSRecord booksSRecord formsS

lip Record playersERecorders, soundERecording tape and wire -SRecords, phonograph SReeds --SReels, hose -SReels, motion picture film- SReference books --EReflectors, parabolic --SRefracting apparatusERefrigeratorsERegisters, cash--ERegisters, printed SRegulating valves --SRegulators, voltageSRelief maps --SRepair partsSReport forms SRectors --SReSpimtorsSRetorts, glass laboratory SRheostatERibbons, adding machine S

Amk Ribbons, addressing machineSup Ribbons, clothS

Ribbons, typewriterSRingtoss gameSRings, bnningERings, carromSRings, flyer --ERings, keySRivetsSRobesSRock, crashed --SRoller bearingsSRollers, inkSRollers, lawn ---ERoofing materialsSRope SRosinSRottenstoneSRougeSRouter --ERouters, plate, photoengravingERowboats --ERubber bandsSRubber goodsSRubbish cansSRugs, room sizeERugs, scatter ---SRulers --SRules, shrink and circum-

ferenceSSaccharimetemESafes --ESafety belts, window-workingSSafety glass --SSafety pinsSSalts ---S

SandSSanders, electric -ESandpaper\-SSandwich boardsSSanitary napkinsSSanitary systemsSSSash, combination screen and

stone --SSash cords --SSash, screenSSash, stormSSaucers --SSaw bladesSSaw framesSSawdustS

116

SawhorsesESaws, band --ESaws, circularESaws, handSSaws, powerESaws, power hack. --EScales, .beam balanceEScales, draftsmen SScales, springSScalpelsSSci ssors- -SScoop shovels, hand --SScouring powdeisSScrapers, hand --SScreen doors --SScreens, irojection, built-inBFScreens, projection, movableEScreens, windowSScrew extractorsSScrew eyes --SScrew hooks --SScrewdrivers ---SScrewsSScrubbing compounds --SScrubbing machinesEScythes --SSealers, envelope, mechanical FSeasonings ---SSeatsESectional bookcasesESedativesSSeed, grans --SSeparators, battery --SSeparators, milkESerumsSServing trays --SSetteesESewer systemsI or SSSewing machines --EShades, windowBFShakers, laboratory --EShakers, powerEShampooSShapers, bench and floorEShapers and routersESharpeners, electrical --ESharpeners, pencil ---SShears, hand-operatedSShears, poweroperatedE

IVIS

Sheaves-SSheet metal -SSheet music- SSheeting-SShellac-SShelves, kiln- -SShelving-BFShelving materials --SShingles-SShock absorbers--SShoes and boots-SShopcoats-SShorthand writing machines -EShovels, hand-SShower fittings-SShrubs-IShrubs-SShuffleboard sets-SShuttlecocks --SSidewalks-ISiding, sheet metal-SSifters --SSigns, large-ESigns, small ---SSilk screen printing apparatus,

complete units-- SSilver polishes -SSilverware-SSink fittings- SSkeletons ---ESkillets-SSkis-SSlats -SSledgehammers -SSlicers, bread, mechanical -ESlide rules-SSlides, lantern -SSlides, microscope -SSlides, projector SSnaps-SSneakers-SSnips-SSnow shovels, hand --SSoap dispensers-SSoaps--SSoccer balls --SSoccer shoes --SSocket wrench sets-ESockets, wrench-S

IV- 16

-Socks, pairs-SSoda, baking-SSodding-SSoftballs -SSofteners, water, chemical-SSoil- -SSoil penetrometen-ESoil test molds-ESoldering coppers --SSoldering materials --SSolvents-SSound recorders-ESound systems-SSSpades-SSpading forks-SSpark plug cleaning machines-ESpark plugs ---SSpatulas-SSpecimens, laboratory-SSpectroscopes-ESphygmomanometers --ESpikes-SSpirits --SSpirometers-ESplints-SSpokes --SSpokeshaves-SSponges-SSpoons --SSpotlights-SSpray mixtures-SSprayers, hand --SSprayers, power-ESpreaders, manure-ESpreaders, tiro --ESpreads, bed-SSprings ---SSprings, furniture-SSprinklers, lawn, movable-SSprivklen, lawn, traveling-ESprinkling systems, lawn-ISprockets-SSquares --SSqueegees-SStacks, book-EStadia rods-EStadiometen-EStaff liners, music-SStain removers --S

117

Stains-SStakes-SStamp pads --SStamping machines, power --EStamping machines, small hand-SStamps, rubber-SStandards, jump-EStands, calendar ---SStands, chart --EStands, dictionary --EStands, engine repair --EStands, umbrella --EStaplers, foot- or power-

operated-EStaplers, small hand-SStaples --SStarch-SStarters, electric-SStationery-SStatuary --ESteam vapor cleaners-ESteam, packing-SSteel measuring tapes --SSteel, sheet --SSteel wool-SStencil correction fluid --SStenals-SStenographers notebooks ---SStereoscopes-ESterile gauze ---SSterilizers-ESlicks, composing-SSticks, hockey -S

sport-SStitchas-EStock records-SStockings --SStones, printers -EStools --EStop watches-SStoppers --SStops, bends -SStorage batteries --SStory drain systems-IStoves-EStraightedges --S

Strainers --SStraws, drinking-SStretchers-S

6/114

Strings-SStriking bag outfits --ESty -SSung lass frarires-SSunglasses-SSupply cases-ESupporters, athletic-SSurface hardened blocks-SSurgical instruments, small-SSurgical powders-SSwages --SSweepers, carpet, electric-ESweepers, hand-SSwitch boxes-SSwitches, electric-SSynchronizers, camera-SSyringes --SSyrup --STable protectors STable tennis balls-STable tennis rackets--STablecloths --STableware-STables-ETables, computing-S

MIPF Tablets, medicinal-STablets, writing-STabs, index --STabulating machines-ETack hammers-STackling dummies, football STacks--STags-STalcum powder-STanks, bulk storage -ETape --STape measures-STapes, measuring -STaps--STar roofing and siding ---STargets, archery --STeam uniforms --STelephone systems-SSTelevision cameras -_-ETelevision sets-ETelevision tubes--STennis balls-STennis court nets, cord-STennis court nets, steel-E

6/114

Tennis rackets- STents, wall-ETents, shelter-STerminals, battery --STest tube brushes --STest tube racks --STest tubes-STests, addevement-STextbooks --STheatrical costumes --STheodolites and tripods --EThermographs-EThermometers --SThermostats --SThimbles ---SThinners --SThreads --SThroat applicators-SThumb tacks --STickets --STile, drain --STune clocks, watchmen -ETuners, -ETuers, small-STin cans-STin cutters-STinware ---STire chains -- -STires and tubes-STissues, cleansing-SToasters, electric-EToggle bolts --SToilet paper --STokens --STongs ---STongue depressors --STool sets, hand --ETools, hand, not in sets-STools, power-ETopsoil --ITow bars-STowels-SToys, large-EToys, small -STracing cloth-STracing paper-STractors-ETrammels-STrampolines-E

118

Transformers, laboratory ---STransit, engineen-ETransmissions, integral parts

of larger units-STransmissions, not integral

parts of larger units-ETransmitters --ETrays --STrees-ITrees, hall-ETriangles, drafting ---STrimmers, hedge, hand -STrimmers, hedge, power-ETripods-ETrophies-STrowels --STruck chassis-ETrucks, hand-qETrucks, motor --ETubes, Inner --STubes, radio --STubes, television --STubing materials -STumblers, glass-STuning forks-STunnels, models, wind-ETurf-ITurpentine-STweezers -STwine --SType cases --EType casting machines--EType cleaner --SType liners --SType, matrix ---SType, printingi-STypewriter brushes-STypewriter covers --STypewriter desks --ETypewriter ribbons --STypewriters-EUmbrella stands --E

Unguenb-SUniforms-SUpholstering materials-SUrns, coffee --EUrns, flower-SUtensils-SVacuum bottles --S

W-17

Vacuum cleaners -EVacuum tube voltmetersEValve parts ---SValves, large, automatic -EValves, small ---SVaporizers, electricSVarnish driers --SVarnish removersSVarnishesSVasesSVaulting polesSVegetablesSVending machinesEVentilatini systemsSSVessels, lase --EVessels, small --SVibrographsEVideo cameras --EVideo recordersEVideo tapes --SVinesSVises, benchEVises, small handSVision charts --SVolleyball nets --SVolleyballs -SVoltmetersEWagons --EWall brushes -SWallboard SWallpaper -SWalls, retaining I

Washbasins -SWashclothsSWashers and/or dryers -..EWashers, rubber and leather -S

IV-18

Washers and dryers, photo-gralthic E

Washing machinesEWashing powdersSWashtubs --SWaste, machinistsSWastebasketsSWatch crystalsSWatches, stopSWatclunens time clocksEWater coolers --EWater, dueled SWater glasses --SWater meters, laboratory type ---EWater softenersSWater systems SSWatercolor brushesSWattmeters, laboratory

typeEWavemeters and wave

analyzers --EWax crayons --SWaxes, liquidSWaxes, paste --SWaxes, sealingSWaxing machinesEWeaving machinesEWeighing scales, beamEWeighing scales, small

springSWeightsSWelding apparatus ---EWelding rodsSWheel straightening

apparatusEWheelbarrowsE

119

Wheels, automobile --SWheels, emerySWheels, pottery--EWhetstones SWhiskbroomsSWhistlesSWindow glassSWindow screensSWindow shadesSWindow-working safety beltsSWipersSWireSWood fillersSWood, plastic --SWood preservativesSWood stainsSWool --SWool, glass --SWool, steel --SWork benchesEWork tables --EWraPping paper SWrenches, in setsEWrenches, not in setsSWringers, clothSWringers, mop, largeEWringers, mop, smallSWriters, checkEWriting paperSX-ray machines -EYard benches -EYard brooms -SYardsticksSYarnSZinc --S

4/114

Part V

Stores System Procedures, Controls, and Accounting

A central stores system enables a school districtto take advantage of the economies of quantitybuying and to fill requisitions for standard suppliespromptly. However, no set rules can be establishedto determine when it would be to the best interestof a school district to adopt a stores system.Availability of material, facilities for storing anddelivering merchandise, and the size and number ofplants in a school district all must be taken intoconsideration. Costs of receiving, storing, anddelivering stock items, as well as costs of stockcontrol, should be included in the total cost of astores system (as compared to the cost of directpurchasing) in deciding on the desirability of thestores system.

Optional Methods of Financing,Accounting, and Controlling

Either of two accounting methods may be used:

Stoles Account Method

The establishment and maintenance of a storessystem by the use of a Stores account carriedwithin the General Fund is a long-established prac-tice. Stores accounts may also be maintainedwithin other funds.

Revolt* Fund Method

Education Code sections 42830-42834 autho-rize and prescribe procedures for the establishMentof a revolving warehouse stock fund for schooldistricts. Permission Is also given for two or moredistricts to establish a common revolving fund forthis purpose. The amount of the :evolving fundshall not exceed an amount from the General Fundof the district or districts equal to the average dailyattendance of the district or districts for the nextpreceding year multiplied by fifteen dollars(S15.00) plus such amounts as the governing board

or governing boards may appropriate from otherfunds of the distrkt or districts, as outlined inEducation Code sections 42830-42834.

Types of Sufflies In a Stews System

Items purchased for a stores system should bethose that are used in sufficient quantity to Justifythe cost of establithing them as stock items. Initialpurchase of a new item should be conservative asto quantity to test its turnover, thereby establish-ing a basis for determining the quint* needed.Committees composed of usas of the various itemscan be helpful in determining standard items to bewarehoused and in encouraging their use. Thetypes of items most frequently stocked are includedin the list that follows:

Instructional supplies, including paper, pencils,chalk, paste, art supplies, and the like

Office supplies, inchiding typewriter ribbons,duplicating supplies, desk files, and the like

Cwitodial suppliesMaintenance supities, including lumber, small

took, electrical supplies, paints, sandpaper,and the like

NOTE: Many of doom items s frequently toqoantionod ibr saein tbo school *opt Sonartines It is neconary to cony noon thanow Quad,' of NW* fog this PorPcoe

Food and related suppliesPrinted fon=Equipment (When it is known that items sudi as

typewriters, scrubbing machines, and the likewill be needed in the near future, it issometimes eccmanical to purchase this equip-ment in quantity. It is not recommended thatequipment items such as these be maintainedon a minimums-maximum basis as are items ofsupply.)

120

Essentials of a Stores System

The essential features to be provided in connec-tion with the establishment and operation of astores system are presented in this section.

Devices for Control of Purebases

Provision for numbering, cataloging, and stan-dardizing stock items. Printed catalogs that list allitems by stock number, unit of issue, description,and unit cost should be available to all who willrequisition them from the warehouse. The catalogshould preferably be loose-leaf to allow for replac-ing pages in the event of substitutions, additions,or deletions.

Provision for the addition or deletion of stockitems. A special form may be used to notify alldepartments concerned of the necessary informa-tion regarding the action taken.

Provision for minimizing losses because of obso-lescence. Special cotrunittees can be helpful ingiving information in advance on planned diangesIn curriculum which will affect the use of suppliesalmady stocked. If it is knosin that a change isplanned, supplies to be discontinued can beallowed to run out without reordering when thestock drops to the minimum.

Control of maximum and minimum stock bal-ances. Care should be exercised in the setting ofmaximum and minimum quantities. Continualstudy of stock activity and periodic readjustmentof the limits set are required because of suchconditions as growth, grade levels of users, changesin curriculum, changes of personnel placing requisi-tions, storage capacity, and the like. Some Itemswill deteriorate when stored too long; this factorshould be considered when Owing otders. Verysmall, inexpensive items should be ordered inadequate supply for anticipated need; more expen-sive items should be ordered according to conser-vative estimates of need.

Recoils of Perpetual inventory

Individual cards or records that contain thefollowing information should be kekt for each itemstocked:

1. Identifying stock number2. Specification of unit of issue3. Description of item

V-2

4. Unit price5. Posting references: date, document number,

and the like6. Receipts in terms of stock units7. Issues in terms of stock units8. Balances on hand in terms of stock units

KtTE: The followiag additional information on the dock,records may be desirable: (1) atinkitsun and maximumquantities to be stocked; (2) reference to vendors fromwhom stock is pinclissed; (3) memoranda of orders placed;(4) memonusda of unfilled Impish:ions: (5) reference towarehouse location of item W the identifying stock numbercannot be used for this purpose; and (6) provision for ninesof receipts, issues, and balances on hand.

Verfficatioo by Physiad inventory

Provisions should be made for at least an annualcount of all items stocked. This can be done on acyclical basis with a portion of the total stockinventoried each period. This count should bemade by per other than warehouse perscnusel.In the event warehouse personnel are used to takethe count, the record should be spot-checked bypersons other than those responsIbt for stock. Acommon practice is for the firm -Worming theschool audit to make the spot checks.

Security Control and System of Inning' Cheeks

In planning the stores system, provisions shouldbe made for adequate security of stock and asystem of internal checks. Buildings used forwarehouse stomp should be as fireproof as poseAle and should have adequate locks. Only speci-fied personnel should be allowed to issue stock.Preferably, the stock records should be maintainedin an office other than the warehouse (stocktecords are commonly maintained in the account-ing or purchasing offices). At inventory time orother periodic checkup time, any differencebetween the book record and actual quantitycount should be investigated and necessary adjust-ments made.

Planned Procedures for awe** aid

1. Items to be stocked shourl be purchased bymeans of an official district purchase orderissued in compliance with the EducationCode and the district's policies coveringbidding and purchasing. An "on order" nota-tion may be made on the individual stockcontrol records at this point. On receipt of

121 o/$4

merchandise, the items should be countedand inspected for condition and compliancewith specifications. The signed receiving copyof the purchase order or other receivingdocument authorizes payment to the vendorand charge of the cost of the merchandise tothe Stores account. Either the receivingdocument or the payment warrant may beused as the basis for entering receipt of stockby quantity and value on the stock controlrecords affected by the purchase.

2. Stores should be issued only upon theauthority of a properly approved, prenum-

- --bered requisition, which should give thefollowing information:

Source and date of requisitionDelivery instructionsAccount or accounts to be chargedProvision for approvals as to budget, items

allowed, quantities, and the likeProvision for posting referenceFor each item: quantity ordered, unit,

stock number, description, unit price,total amount; and on each requisition,columns for noting substitutions, backorders, and the like

Provision for evidence of receipt and dateof delivery. A multiple copy snap-outform is commonly used for warehouseissues, with copies of each transactiongoing to the requisitioner, the ware-houseman, and the recording office.Posting is done Om this document tothe stock control records.

NOTE: The term mss uistrion as used here should beunderstood to Wade fiquisitions, WNW stores In-vokes, or similar documents for use by otglas diprktsthat And it desirable to um additional documentsbetween the thee of preparation of the requisition forthe materhds and the actual dedinny of them materials tothe school or department requesting them.

Lines of Authority and Respondbilityof Personnel

Lines of authority and responsibility shouldfollow a logical plan and be clear-cut and definite.

NOTE: In planning the establishment of a Moses system,consideration should be given to the location of the warehouseOf WifebOOMPS and to the tranimdttal of documents between the

4/848-- lee

warehouse and the accounting office. The maw its,physical leqUiranentS for proper glaraile, and mmageseent ofMock items timid '41: deternsined In advance. Stored itemsshould be annaged when possible in an order corresponding totheir order on 'tendon* supply lists.

Accounting for a Stores System

Accounting for a stores system may be done byemploying (1) the stores account method; or (2)the revolving fund method.

Stereo Aceesurt Method

The stores account method provides for theestablishment of a Stores account within theGeneral Fund. Stores accounts may also be estab-lished within other funds of the district. Paymeesfor the purdigie of stores are not classified asexpenditures; these payments constitute an increaseof the asset account, Stores, equal to thereduction in another asset account, Cash in CountyTreasury. The issuance of stores should be re-corded as a 'reduction of the asset account, Stores,and as a charge to the appropriate expenditureaccount for which the stores were issued. Suchaccounting may be continuous, or summaries ofstores issuance may be made periodically, prefer-ably at least monthly, and the total credited to theStores asset account. Charges to the various expen-diture accounts for which the stores were issuedwould be made at this time in summary.. To theextent that the county superintendent of schoolsmaintains corresponding records, summaries of theissuance of stores should be reported to the countysuperintendent of schools periodically. The remain-der of the Stores account should represent theinventory value of merchandise in the warehouse.

When goods are purchased for stores without theuse of a revolving fund, budget control of expen-ditures occurs at the time of issuance of suchmerchandise and not at the time of purchase.Uncontrolled purchasing may result in an unneces-sary and excessive investment in stores and aserious depletion of cash needed for other budgetpurposes. The establishment of the Stores accountshould follow, not precede, the budgetary authori-zation, which is made by entry of the intendedamount in the budget under Ending Balance. Onceestablished, the actual balance of the Storesaccount should appear in the budget under Begin-ning Balance; and the same amount, or a deliber-

122 V-3

ate), chsipen larger or smaller amount, should beentered under Ending Balance. Procedures for thecontrol of purchases should be established so that,""-considering existing inventory and carefully pre -pared estimated distributions, an ending inventorywill not exceed the investment in stores as indi-cated in the budget.

Revolving Fund Method

A revolving fund is a separate fund established inaccordance with Education Code sections 42830-42834. Payments for purchases of stores aremade by warrants drawn on the RevolvingFund for Warehouse Stock. The school districtbuys merchandise from the fund and makes pay-ments by warrants drawn payable to the RevolvingFund for Warehouse Stock. The county treasury isthe depository for cash. This revolving fund planprovides a semiautomatic control of the amountinvested in stores.

Accounts for the Revolving Fund for WarehouseStock include Cash in County Treasury, AccountsReceivable, Stores, Current Liabilities, and Reservefor Working Capital. These accounts are self-balancing because the initial value of the fundremains constant unless changed by board action.The balances in the accounts always reflect a fixedamount, whether it be in stock or cash or acombination of both, including receivables andliabilities. The same fixed amount shall be recordedat year-end on official budget forms and reportsunder the Stores account as a part of BeginningBalance and Ending Balance.

Typical Costs eceiving, Warehousing,and 1Distri in Connection with

a Central Stores System

Costs of receiving, warehousing, and distributingstores items, in addition to the cost of merchan-dise, should be charged to the Stores account.These overhead expenses should ultimately becharged to the several expenditure accounts towhich merchandise costs are charged in proportionto the costs of the merchandise. The procedureused is not important if the results are equitable.Use of one or more subsidiary expense accounts iscommon practice.

One method is to add an estimated overheadcharge to merchandise unit prices, adjusting it as

V-4

needed from time to time. This method provides atotal unit charge for each item and avoids thepossibility of delayed overhead charges to appro-priations that have become exhausted.

Another method is to distribute estimated over-head charges to expenditure accounts on Inencumbrance basis at the beginning of a fiscal year.Such charges are to be determined on the basis ofanticipated stores issues to the several expenditureaccounts. At the close of the year, or periodically,the encumbrances may be liquidated and the actualoverhead expense charged.

Whatever method is used, overhead chargesshould be cleared at the end of each fiscal year sothat the f; wres account will represent only thevalue of the inventory of material on hand.

Charges and credits to the Stores account andsubaccounts should include the costs of receiving,staring, and delivering in addition to the directmerchandise costs (cost of item, sales tax, postage,freight, cartage, and other delivery charges to thewarehouse), as follows:

1. Salaries of personnel (storekeeper and others)directly related to the warehouse

2. Supplies used in connection with receivingand warehouse recordkeeping.

3. Rent of space, facilities, and equipment4. Utilities5. Direct expense of trucking

a. Gas and oilb. Greasec. Repairsd. Tires and tubese. Accessoriesf. Other expensesNOTE: When trucks are used for several purposes otherthan the delivery of stores, such coats may be distributed byjob cost amount* or by any other equitable method.

6. Adjustments to Stores accountPeriodically, or at the end of the fiscal year,it may be necessary to adjust the Storesaccount, after proper administrative reviewand approval, for reasons and in the mannerdescribed below.

a. Discrepancies between the quantity ofitems as shown on the individual stockrecords and the actual physical count of

123 6/S4

merchandise in the warehouse may resultfrom errors In stock issues or In themaintenance of perpetual inventoryrecords. Such discrepancies must beadjusted on the individw; stock recordsand will result in a debit (Increase) orcredit (decrease) to the value of the Storesaccount.

b. Differences also may occur between thebalance of the Stores account and thevalue of merchandise on hand, as shownon the Individual stores records, resultingfrom the method of unit pricing em-ployed. Adjustments for this reason willresult in a debit (increase) or credit

o /$4

6.

124

(decrease) to tlw value of the Storesaccount.

c. teriodically, stock must be removed fromthe warehouse because of deterioration,obsolescence, and the like. Either theregular warehouse requisition or a specialform may be used. This form should beapproved by fwxneone with authority toauthorize the disposition of such merchan-dise. Value of the stock removed shouldbe charged to a subaccount under Stores,to be included in other costs of overheadfor future distribution to expenditureaccounts. Individual stock records shouldbe adjusted to reflect these issues.

V-5

Part 111

General and SubsidiaryLedger Accounting

The inclusion of general ledger accounting in this manual is not to be construed as a requirementthat such accounting be employed by school districts or that other accounting methods andprocedures now in force be modified. It is, however, recommended that general ledger accountingbe used. Such a system will provide the data and controls needed for efficient administration. Theprocedures recommended are fully in harmony with the law and the requirements of the CaliforniaState Department of Education with respect to budgeting, accounting, and reporting.

This treatment of general ledger accounting was prepared especially for accounting by schooldistricts; but with the exception of a few portions, it is applicable to the accounting of most countyschool funds.

Definition of General Ledger Accounting

A general ledger is a basic group of accounts in which are recorded in summary or in detail alltransactions of a fund. Each fund should have its own records, including a self-balancing generalledger and subsidiary ledgers as needed, regardless of how small or brief such ledgers may be. Thisshould not be construed as necestdtating separate binders for looseleaf ledger pages or separate traysfor machine-posted ledger sheets; the physical separation achieved by division leaves or iguides issufficient if the self-balancing principle is maintained for each portion.

Gakral and Subsidiary Ledgers

Ledgers are comprised of accounts. An account is a device, usually a separate page, sheet, or cardfor the accumulation of debit and credit postings and the determination of the excess of debits orcredits, known as the debit or credit balance, respectively. Accounts usually provide for thecolumnar showing of date and posting reference and often for some a description of each posting.Accounts usually have separate columns for debits, credits, and balances.

All accounts may be carried in a single ledger. Proof of the accuracy, completeness, and balancedcondition of accounting can be achieved by trial balance, which should be taken frequently --at leastmonthly. Other means of verifying account balances should be utilized regularly. For example, thebalance of the account, Cash in County Treasury, should be reconciled with the records of thecounty superintendent of schools , T of the county auditor on a regular, periodic basis. (The countytreasurer's records normally show a larger balance, the difference representing warrants not yethonored by him or her.) The account, Revolving Cash Fund, can be verified by making a count ofcash and receipts for disbursements. Other accounts are susceptible to proofs of various kinds. Thesechecks or proofs should be employed regularly.

Most of the accounts named here are likely to be needed by most school districts. However,certain accounts may be found to be of little use to some small school districts. On the other hand,there are specific divisions of certain accounts that will be found useful in the large city schooldistricts. As an example, large districts employ workers for maintenance, alteration, and minorconstruction work. Proper accounting of labor and material for job accounts and work orders each

411) fiscal year requires the use of a Work in Process account or similarly named account, the accountingfor which should be on the encumbrance basis.

VI -1

125

If the accounts in a ledger become too numerous, it is more difficult to apply the trial balanceproof. Accounts of a similar nature are removed to a subsidiary ledger with substitution of a singlecontrolling account in the General Ledger. Only two subsidiary ledgers with controlling accountsare explained in detail in this manual. Other examples of controlling accounts for which subsidiaryledgers (or supporting detail of a comparable nature) should be maintained include the following:Accounts Receivable, Investments, Stores, Prepaid Expense, Fixed Assets (four kinds of property),Current Liabilities, and Reserve for Encumbrances.

Accounts pertaining to income may be maintained in the General Ledger. Analysis by sourceshould parallel generally the pattern of the school district budget form, which is furnished by theDepartment of Education for use in California public schools, using an account for each source. Asubsidiary ledger is often found desirable. Each account should contain two partsactually twoaccounts. The first part, requiring a small portion of the form, should be employed for estimatedincome only. The second part, occupying the larger portion of the form, should be employed foractual income only. The amount by which estimated income balance (debit) exceeds the actualincome balance (accumulated credits for the year to date) represents unrealized income; that is, theanticipated amount for the remainder of the fiscal year. Actual income in tx zess of estimatedincome signifies an underestimate. Information accumulated in the income ledp.. accounts and inreports prepared from these accounts is of vital importance in administration. It deserves doseattention month by month and year by year. The two portions of the several income ledgeraccounts are controlled by General Ledger accounts, Estimated Income, and Income.

Accounts pertaining to appropriations and expenditures may be maintained in the GeneralLedger only. However, the required classes of expenditure, without consideration of therecommended subordinate dams, are sufficiently numerous to justify the establishment of asubsidiary ledger. Furthermore, the statutory requirement for appropriation control of expenditureis facilitated by use of a special form which is not suitable for General Ledger accounts. Thissubsidiary ledger is usually called an Appropriation Ledger. Its, accounts, as in the case of theIncome Ledger, contain a minimum of two parts, a small portion for appropriation (credit) and alarger portion for expenditures (debit). Expenditures are limited by appropriations, by law witiirespect to the major classes of expenditure, and by standard practice with respect to subordins'tclasses.

Expenditures are classified in two ways within the subsidiary ledger: in detail by program and insummary by object of expenditure. For example, instructional supplies would be posted to ea&using program, then subtotaled to the object account for controL The total of all of the objectaccounts (or thus the detailed programs) would support the subsidiary entry in the General Ledger.

Every proposed expenditure should be compared with the unencumbered balance (appropriationminus expenditures and encumbrances) of the proper account to determine whether the bale* isadequate. Expenditures include not only those items for which payments have been made Initials°those that have become current liabilities. Regardless of the exact plan of accounting, there oftenare appreciable delays between the time that goods or services are received and th,, time that theexpenditure posting is made. Furthermore, the interval between authorization and consummationof an expenditure may be even greater. For these reasons, recognition must be given to alloutstanding commitments against each appropriation account when considering expenditures. Thisis accomplished fairly easily and satisfactorily by informal methods in relatively small districts. Inlarge school districts, the encumbrance accounting method is generally used so that each proposedexpenditure is compared with the unencumbered balance (appropriation minus expenditures andencumbrances). The Appropriation Ledger accounts are controlled by General Ledger accountsdesignated as Appropriations, Expenditures, and Encumbrances, respectively.

Transfers for tuition and the hire are not classed as expenditures in the strict meaning of theterm; however, transfers should be accounted for in the Appropriation Ledger. Appropriak. 'a for

VI-2 6/1114

126

Contingencies is an appropriation that should be carried in the Appropriation Ledger although noexpenditures should ever be charged to that category. General Reserve should be a General Ledgeraccount only. Stores is a General Ledger account.

Appropriation control is not necessarily maintained for all of the subordinate accounts for whichexpenditure analysis is desired.

It should be recognized that the accounting of mconie and of expenditures, as currently practicedin most districts, is on a cash basis during most of each fiscal year. At the close of each fiscal year,modification of a cash record is required by the entry of current liabilities, which representexpenditures incurred during the fiscal year. Similarly, at the end of the year, entry of accountsreceivable, which represent income accrued during the fiscal year, is required. It should be notedthat not all income that has theoretically accrued is required to be entered as receivable. Forexample, taxes levied but uncollected are not required to be set up as receivable for the preparationof state reports. Since a considerable part of the accounting is very nearly on a cash basis and sincethe year-end modifications do not constitute the full accrual of certain income, the term modifiedcash basis may be employed as descriptive of school accounting practices as currently authorized.

Standard commercial forms, including those for both general and subsidiary ledgers as well asspecialized forms such as those for the Appropriation Ledger, are suitable in many cases for eithermanually or machine- posted accounts.

General Ledger Accounts

All General Ledger accounts commonly required for public school accounting are listed here in thefollowing Chart of Accounts. While all of these accounts are pertinent to the General Fund, theyalso may be applicable to the several other funds which a district may maintain. Brief explanationsconcerning the use of the accounts are given in each case, and in some Cases comments regarding thesignificance of debit or credit balances of such accounts are also included.

Certain accounts, such as Revolving Cash Fund, Cash Collections Awaiting Deposit, Investments,Accounts Receivable, Stores, and Prepaid Expenses, are provided especially for use by large schooldistricts and may be omitted by small districts if they are not needed.

Chart of Acciounts

AssetsNorma/balance

9110 Cash in County Treasury Dr9120 Cash in Illank(s) (Education Code sections 35314, 52613, 52704, or 39892 only) Dr9130 Revolving Cash Fund (Education Code sections 42800 42806, 42810,

42820, and 42821) Dr9140 Cash Collections Awaiting Deposit (Education Code sections 41001-41021) Dr9150 Investments at Cost (Education Code Section 41015) Dr9160 Accounts Receivable Dr9170 Due from Other Funds Dr9210 Stores Dr9220 Prepaid Expenses r Dr9300 Other Current Assets9310 Assets Frozen Dr9400 Fixed Assets Dr

Liabilities

9510 Accounts Payable (Current Liabilities) Cr96209530

Due to Other FundsTemporary Loans

CrCr

9540 Deferred Income Cr

V1-4

Reserves

9610 Reserve for Working Capital Cr9620 Reserve for Encumbrances Cr9630 General Reserve Cr9690 Investment in Fixed Assets Cr

Fund balances

9710 Unappropriated Fund Balance Cr

Budgetary end control accounts9810 Estimated Income Dr9820 Appropriations Cr9830 Encumbrances Dr9840 Income Cr9850 Expenditures Dr

Nonoperating accounts9910 suspense Clearing Dr Cr

Definitions of, and explanatory notes about, the accounts listed in the Chart of Accounts follow:

9000 Assets, Liabilities, and Fund Balances

9100 Cash, Investments, and Receivables

9110 Cash in County Treasury. Beginning cash balance, plus all monies deposited inthe county treasury leo disbursements. Included herein are all amounts addedor deducted at the county level.

9120 Cash in Banks) (Applicable to General Fund and/or other funds). Indicatedbalances in separate bank accounts for Adult Education Incidentals, Scholar-ships and Loans, School Farm accounts, and Cafeteria accounts if maintainedby the district (Education Code sections 35314, 52613, 52704, and 39892).

9130 Revolving Cash Fund. (1) A recording of the establishment and maintenanceof a cash fund for the use of the chief accounting officer or other designatedofficial of the district' in accordance with Education Code sections42800-42806, 42810, 42820, and 42821. This fund is similar in use andcontrol to accounts known as Petty Cash. Once this ftind is established, itshould be carried indefinitely in the General Ledger and shown in all balancesheets and budgets until abolished. The amount recorded will vary onlythrough increase or decrease in the total amount approved for the ftmd. Itshould be noted that the Revolving Cash Fund is a reservation of cash withinan already established school fund and is not to be considered or accountedfor as a separate fund or entity. (2) A sum of money, either in the form ofcurrency or a special bank account, set aside for the purpose of making changeor immediate payments of small amounts. The invoices for these payments areaccumulated and the ftmd is reimbursed from district funds, this maintainingthe fund at the predetermined amount.

9140 Cash Collections Awaiting Deposit. Receipts not yet deposited in the- countytreasury. This account also includes any in bank clearing accountsawaiting deposit in the county treasury ucadon Code Section 41017).

9150 Investments. Securities issued by the United States Government in whichmoney is invested. Investments ate to be carried on books at cost (EducationCode Seclion 41015).

128

9160 Accounts Receivable. Amounts due from private persons, firms, corporations,or governmental agencies. Accounts receivable shall be limited to auditable

eyamounts (usually based upon contractual agreements), to amounts billed butnot received, and upon provisions of law, to amounts which were earned bythe close of the fiscal year and which might have been received and depositedin the county treasury by that date except for the lack of time for settlement.

';'9170 Due from Other Funds. Amoisnts due from other ftusds of the district.

9200 Stores, Inventories, and Prepaid Expenses

9210 Stores. Amounts of materials, supplks, and possibly certain equipment kept ina central warehouse and not yet charged to expenditures (see Part V of thismanual).

9220 Prepakl Expense& Amounts of payments made in advance of the receipt andutilization of services. Prepaid insurance premiums are illustrative. Thatportion of the premium paid in advance for coverage beyond the current fiscalyear is charged to Pnspaid Expenses. Aikfustments to this account in thesucceeding fiscal years apportion the premium over the period covered.

9300 Other Current Assets. Assets that are available or can be made readily available tomeet the cost of operations or to pay current liabilities.

9310 Assets Frozen. Funds withheld until certain legal requirements are net (e.g.,funds withheld under provisions of Education Code Section 41372).

9400 Fixed Assets. Assets of a permanent character having continuing value (e.g., land,buildings, machinery, furniture, and other equipment). The term capital assets issometimes used in the same sense, but fixed assets is preferred.

9410 Land9420 Improvement of Sites9430 Buildings9440 Equipment

(Refer to object clusification 6000 for definitions of the above fouraccounts.)

9450 Work in Progress. An asset representing the value of partially completed work..

9500 Liabilities. Legal obligations, exclusive of encumbrances, that are unpaid.

9510 Accounts Payable (Current Liabilities). Amounts due to private persons, firms,corporations, or governmental agencies for services rendered and goodsreceived on or before the close of the fiscal year. Do not include"encumbrances" represented by purchase orders or contracts, or portionsthereof, for services or goods to be furnished after the close of the fiscal year.Include salaries earned but not paid until after June 30, amounts owed toother school districts for tuition payments, that portion of constructioncontracts represented by work done to the close of the fiscal period, invoicesfor materials or equipment received prior to June 30, and so forth.

9520 Due to Other Funds. Amounts due to other funds within the district.9530 Temporwy Loans. Short-tenn obligations representing amounts bonuwed for

short periods of time and usually evidenced by notes payable. They may beunsecured or accused by specific revenues to be collected, ranch as taxanticipation notes.

129 VIS

V1-6

9540 Deferred Income. A ty account for monies received, unearned at a givendate but included, as in income in subsequent periods.

9600 Reserves9610 Reserve for Working Caggial. An account set up to reflect the value of

workh* capital accounts such as Stores, Prepaid Expenses, and Revolving CashFund. At the beginning of the fiscal year, this account is credited with thesame amounts set up as debits to the previously described asset accounts. Atthe dose of the year, it is 'Ignited to reflect the net increase or decrease,during the year in these amounts.

9620 Reserve for Encumbrances, A reserve set up out of appropriatiors. Theencumbranee procedure may be either a memorandum or a formal procedure.Under the memorandum procedure, only one account, Reserve forEncumbrances, is requited. During the year this account is a reserve set up outof appropriations. At year-end the outstanding orders may be recorded as areservation of swim Under the formal procedure, a second account,Encumbrances, is needed. The encumbrance is an offset to the appropriationaccount and may be dosed against the account at year-end.

9630 General Reserve. An account in which the budgeted reserve is recorded,necessary so that cash may be made available during that period of the fiscalyear when taxes and state funds have not yet become available.

9690 Investment in Fixed Assets. The boob. value of fixed assets.

9700 Fund Balance. The difference between assets and liabilities.

9710 Unappropriated Fund Balance. That portion of a fund balance that is notsegregated for specific purposes. All assets and estimated income available forappropriation are credited to this account. General Reserve, budgetedappropriations, and other obligations are debited. The net value of the accountrepresents the unappropriated fund balance.

9800 Budgetary and Control Accounts9810 Estimated Income. All income estimated to accrue during a given period

whether it is all collected during that period or not. This account will be aseparate control account in the General Ledger and will include all incomeestimated to accrue during the current fiscal year.

9820 Appropriations. Autborbation panted by the Board to make expenditures andto Incur obligations for specific purposes and amounts within a given period.This account represents the total of the authorizations and is used as a controlaccount in the General Ledger.Details are recorded in the subsidiary Appropriations Ledger, as encumbrancesand expenditures are made, they are charge4 apdnst appropriations in thesubsidiary Appropriations Ledger, leaving as a balance the amount that maystill be encumbered and expended.A portion of the current fiscal year's appropriation that Is not appropriated forany specific purpose but is held subject to intrabudget transfer may berecorded in an account titled Appropriation for Contingencies. This subsidiaryaccount will be dosed at yearend in the same manner as all otherappropriation accounb. This appropriation is used only for emergencytransactions that were not anticipated in the original budget process.

130"$4

ill

,!* =Ark, ilalEtv0154r";:, E ri -1,..il!n.q*e . .

9830 Encunibrunces. Obligations in the form of purchase orders, contracts, salirks,or other commitments that are chargeable to an appropriation and. for which apart of the appropriation is reserved. Encumbrances are liquidated when theobligation is paid or when the actual liability is set up. This control accountrepresents the total amount of the appropriations that has been earmarked forexpenditure for specified purposes.

Details of encumbrances by classification or accent are recorded in the santesubsidiary Appropriations Ledger in which expenditures are recorded.

9840 Income: ,Addition s to cash or other current assets that do not reduce any otherasset, nor increase any liability or reserve, nor represent the recovery of anexpenditure. To the extent that the accounts are kept on an accrual basis, theterm income refers to all income that accrues during a given Period whether itis collected during the period or not. This account will be a separate controlaccount in the General Ledger.

9850 Expenditures. A control account that includes total expenditures by warrantsas well as amounts deducted at the county level. If accounts are maintained onan accrual basis; all charges incurred are included whether paid or not. Foraccounts maintained on a cash basis, only actual disbursements are included.Details of expenditures by classification- or accounts are recorded in thesubsidiary Appropriations Ledger.

9900 Nonoperating Accounts

9910 Suspense Clearing. An account that carries charges or credits temporarilypending to the determination of the proper account or accounts to which theyare to be posted and that may be used for posting of amounts t yet analyzedto decide if they should be income, expenditure, or aba Charges thatmust be allocated or prorated may be posted in this " nt 'until suchallocation or proration can be calculated. This account must zero .balance atthe dose of the mad year and should be reviewed monthly.

General Ledger Procedures

Certain procedures should be followed in opening and maintaining the General Ledger.

Opening the Genend Ledger

In opening the General Ledger for the first time, care should be taken to use the proper accountsand amounts. These are usually available from either the county superintendent of schools or thecounty auditor.

Determining Asset, Liability, and Unappropriated Fund Balance :clues. One of the fast steps inopening the General Ledger is to list each fund's assets by title and amount with the total, as in thefollowing example:

Account

9110912091309140915091609170

Assets

Cash in County TreasuryCash in BankRevolving Cash FundCash Collections Awaiting DepositInvestmentsAccounts ReceivableDue from Other Funds

$100,042.070

5000024.17

01,507.88

00439

4164 131 VI-7

Account Musts

9210 Stores 09220 Prepaid Expenses 1,572.389310 Assets Frozen 0

Total assets $104,431.49

A similar list is then made of the fund's liabilities:

Account

9510 Accounts Payable 89,763.459620 Due to Other Funds 113.18

Total liabilities $9,876.63

Now the total liabilities are subtracted from the total assets, and the difference is labeledUnappropriated Fund Balance in this manner:

Account

Total assets $104,431.49 .

Lew: total liabilities 9,876.63

9710 Unappropriated Fund Balance $ 94,554.86

This information is now used to prepare an opening journal entry. This opening entry is usuallymade on a form known as a General Journal Entry Form, listing accounts affected and showing inseparate columns the amounts to be posted later to the General Ledger as debits or credits. Acomplete tile of these forms, either bound in a book or collected in some other file, makes up theGeneral Journal.

Preparing the opening General Journal entry. The opening General Journal entry is made asfollows:

Ji:

Date Account Debit Credit

7-1-73 9110 Cash in County Treasury $100,042.679130 Revolving Cash Fund 500.009140 Cash Collections Awaiting Deposit 24.179160 Accounts Receivable 1,697.889170 Due from Other Funds 894.399220 Prepaid Expenses 1,572.389510 Accounts Payable $ 9,763.459520 Due to Other Funds 113.189710 Unappropriated Fund Balance 94.564.08

$1040431.49 $104,431.49

To record assets, liabilities, and unappropriated fund balance forthe first time as of July 1, 1973

Several points should be noted as illustrated in the preceding General Journal entry. First, noaccount is opened that is not needed. For example, no amount is shown in the original list of assetsfor Cash in Bank, Stores, or Investments. Therefore, no account was opened for any of these assets.Should need arise later in the year for any of these accounts, the account may be opened at thattime.

132VI-8 8/$4

, .

The second point to note is that the total of the debit amounts equals the total of the creditamounts. This must always be true of any journal entry. Care exercised at this time in assuring theequality of debit and credit totals will avoid difficulty with the GeneralLedger later on.

Another point to note is the layout or "form" of the entry itself. The debit accounts andamounts ate placed to the left, and the credit accounts and amounts are placed to the right. This isusual bookkeeping practice.

A final point is the dOscription of the entry. This is the explanation of what is being done bymeans of the entry. In ti6 illustration, the explanation shows that this entry records for the firsttime the assets, liabilities, and unappropriated fluid balance of the fund as of July 1, 1973. Somedescription is always necessary in a General Journal entry. When at a later time entries are madefrom other sources such as payroll listings, warrant registers, and the like, explanations are usuallyunnecessary since the title of the form describes what is being done.

Posting the General Ledger. The General Ledger is posted from the General Journal. The termposted means the orderly triurscription of the information from one place to another. Each line ofthe journal is posted to the proper ledger account as either a debit or a credit entry. For example, inthe preceding illustration, the first line of the journal entry is "Cash in CountyTreasury. . . S100,042.67" and is posted to the General Ledger sheet or card as follows:

Account 9110 Cash in County Treasury Pa. 1Date Reference Debit Credit Balance Dr/Cr

71.73 J 1 16100,042.87 $100,042.67 Dr

Note that the entry is made in the debit column and is also entered in the balance column. In thiscase, the amount of the debit is the same as the balance since there was no previous balance in theaccount. (Had there been such a balance, this entry would have been added to a debit balance orsubtracted from a credit balance and the new balance entered.) Finally, in the last column an entryis made to show that the net balance of this account is a debit (Dr) balance.

Each line .of the journal entry is similarly posted until the entire opening entry has beencompletely transcribed to the General Ledger. Opening of the General Ledger is now complete. Atthis point a total of nine General Ledger accounts will be open with balances the same as shown inthe opening journal entry.

The cohimn in the General Ledger account headed "Reference" is used to show the page or otherreference to the source of the entry. In this illustration the entry "J 1" was made to indicate thatinformation for this entry was obtained from the General Journal (abbreviated as "J") and that itwas found on page 1. Other references will be developed for other posting sources as they arerequired. By this method any item in the General Ledger may be traced back to its origin withoutdifficulty.

Recording the Approved Budget-Wow

The approved school district budget form provides information for recording the budget in theGeneral Ledger.

Determining values to be entered. The information to be entered is shown in column 3 of thebudget form under the heading of Income.

The income section of the General Fund budget might look like this:

o/$4

I. INCOME

8100 Federal Income

8110 Maintenance and Operation (Public Law 81-874) S 2,5008210 NDEA (Public Law 85464) 1,000

133 VI-9

8500 Combined State and Federal Income $ 0

8600 Shit* income8810 Principe, Apportionment

8611 Basic and Equalization Aid and Supplemental Support 277,528

8616 Edumtionally Handicapped 1,148

8820 Sadie, Purpose Apportionment8622 Memoir* for Transportation 7,500

8700 County Income

8800 Load income8810 District Taxes

8811 Secured Rob 346,888

8812 Unsecured Roll 2.700

8900 lamming Transfers8920 Other Tuition 3,000

Total Estimated Income $841,264

Each of the items of estimated income should be accounted for separately so that excess incomeor income deficiencies may be readily seen. This is accomplished by the use of a group of accountsknown as the Income Ledger.

The Income Ledger is a subsidiary ledger. The total of the original estimates entered in this kdgeragrees with the total of the General Ledger cOntrolling account, Estimated Income. The subsidiaryledger (income Ledger) and the General Ledger are both posted from the same journal entry.

The original entry of the approved income budget is subject to adjustment later if incomeestimates change.

Preparing the Menai entry. The General Ledger and subsidiary ledger accounts and the amountsfor each are listed in the journal entry as a record of the estimated income, as has been done in thefollowing example:

J2:Dery Accowt Debit enscilt

7-143 9810 Estimated Income $841,264.009710 Unappropriated Fund Balance $641,264.00

Account Subsidiary income Ledger8110 Maintenance and Operation public Law 81474) . . . . $ 2,500.00

8210 National Defense Education Act (Public Law85-884) 1,000.00

8811 Basic and Equalization Aid and Supplemental Support 277,528.00

8818 Educetionalty Handicapped ' 1,148.00

8822 Allowance for Transportation 7,500.00

8811 District Secured Tax Roll 345018.008812 District Unsecured Tax Roll 2,700.00

2920 Other Tuition 3,000.00

To record estimated income for the fiscal year 1973-74 as containedIn the official appnwed budget

Several things should be noted about the preceding journal entry. Rot, this is a General Journalentry, just like the one used to open the books for the lust time. This one, lloweves, also carries theinformation for posting a subsidiary ledger.

VI-10

4 1. r

134

110Next, note that this entry is referred to as sbnply a journal entry, rather than a General Journal

entry. This is usual practice. The term general is used only when there is a possibility of confusion ifit were omitted.

One should also observe the arrangement of the journal entry. The General Ledger amounts arecarried in the debit and credit columns, respectively. Subsidiary ledger amounts are carried to theleft and do not have the balancing feature of debits and credits. This simply means that the singlepostings to the individual Income Ledger accounts represent the breakdown of the total shown inthe Estimated Income, General Ledger, account.

Posting the Genend Laker. The journal entry for reconling the approved budget is posted to theGeneral Ledger in the same manner as the journal entry that originally opened the books, as hasbeen done in the following examples:

Account 9810 Estimated Income Page 1

Date Reference Debit Credit Balance Dr/Cr7-1.73 .12 $841,264.00 $841,284.00 Dr

Account 9710 Unappropriated Fund Balance Page 1

Date Reference Debit Credit Balance Dr/Cr7-1-73 .1 1 $ 94,654.86 $ 94,664.86 Cr

.1 2 641284.00 735,818.88 Cr

Note that in the Unappropriated Fund Balance account, this credit is added to the credit balanceresulting from the original opening entry to give a new credit balance of $735,818.86, the total netassets and estimated income available for apwopriation.

Posting the subsidiary ledger. The subsidiary ledger, in th.b case the Income Ledger, is postedfrom the detailed breakdown shown in the journal entry. Each account is posted to show theamounts carried in the journal entry in the "Esthnated income" and "Estimated to be received"columns.

INCOME LEDGERAccount 8811 District Secured Roll Taxes Per 6

Estimated Amounts Total received Estimated toDate Reference income received to date be received

7-1-73 J 2 $345,888.00 $345,888.00

Each Income Ledger account is similarly posted.

Recording the Approved Budget Expenditmes

Expenditure values, like income values, are taken from Column 3 of the expenditures section ofthe official budget form, as has been done in the example tlui follows:

604

II. EXPENDITURES AND OTHER OUTGO1000 Certificated Salaries

1100 Teachers' Salaries $360,0001200 School Administrators' Salaries 20,0001300 Supervisors' Salaries 25,0001400 Librarians' Salaries 2,0001500 Guidance, Welfare, and Attendance Salaries 10,0001000 Physics! and Mental Health Salaries 1,500

135

vaitoot.

V1-11

1700 Superintendents' Salaries $ 10,0001800 Other Certificated Salaries of District and County Administrative Offices 5,0001900 Other Certificated Salaries 1,000

Total Certificated Salaries $434,600

2000 Classified Salvias2100 Instructional Aides' Salaries 2,0002200 Office of County Superintendent and District Administrative Personnel Salaries 3,1002300 Clerical and Other Office Salaries 7,0002400 Maintenance and Operation Salaries 36,0002500 Food Services Salaries 5,0002600 Transportation Salaries 5,0002900 Other Classified Salaries

Total Classified Salaries $68800

3000 Employee Benefits3100 State Teachers' Retirement System Fund 11,9003200 Public Employees' Retirement Fund 2,0003300 Old Age, Survivors, Disability, and Health Insurance 1,5003400 Health and Welfare Benefits 9003800 Workers' Compensation Insurance 900

Total Employee Benefits $17,200

4000 Books, Supplies, and Equipment Replacement4100 Textbooks 2,0004200 Other Books 6004300 Instructional Supplies 2,6004500 Other Supplies 8004800 Equipment Replacement 6,000

Total Books, Supplies, and Equipment Replacement $11,900

5000 Contracted Services and Other Operating Expenses5100 Contracts for Personal Services of Co. ssultants, Lecturers, and Others 5005200 Travel and Curo'rerence and Other Expense Reimbursed 3005300 Dues and Memberships 2005400 Insurance 1,0005500 Utilities and Housekeeping Services 5,0005600 Contracts, Rents, and Lames 4,5005700 Legal, Election, and Audit Expenses 5005800 Other Services and Expense 4,6005900 Interprogram Charges and Credits for Direct Services 0

Total Contracted Services end Other Operational Expenses $18,500

6000 Sites, Buildings, Books and Media, and New Equipment6100 Sites and Improvement of Sites 2,6008200 Buildings and Improvement of Buildings 22,6008300 Books and Media for New or Expanded Libraries 1,5006400 Equipment 7,800,

Total Capital Outlay $34,300

136 4/14

7000 Other Outgo7200 Outgoing Tuition $ 30,5007900 Appropriation for Contingencies 12,000

Total Other Outgo $42,500TOTAL BUDGET $815.400

As with income, each of the expenditure items should be accounted for separately so thatexpenditures may be controlled within the various budget classifications. This is accomplished byuse of a subsidiary ledger usually known as the Appropriation Ledger. While separate accountsshould be maintained for each of the required expenditure classiMcations, additional subdivisions ofthese classes may be maintained as separate accounts if needed. .

Preparing the journal entry. This budgeted expenditure total of $615,400 totals the appropria-tion to the district's programs; the programs provide a classification of expenditure usage while theobjects provide a classification of expenditure source.

This procedure is shown in the following example:

Data Account Debit Credit7-1-73 9710 Unappropriated Fund Balance $615,400.00

9820 . Appropriations $615,400.00Account Subsidiary Appropriation Ledger

1100 Teachers' Salaries $360,0001200 School Administrators' Salaries 20,0001300 Supervisors' Salaries 25,0001400 Librarians' Salaries 2,00015001600

Guidance, Welfare, and AttendanCe SalariesPhysical and Mental Health Salaries

10,0001,500

1700 Superintendents' Salaries 10,0001800 Other Certificated Salaries of District and County

Administrative Offices 5,0001900 Other Certificated Salaries 1,0002100 Instructional Aides' Salaries 2,0002200 Office of County Superintendent and District Administrative

Personnel Salaries 3,6002300 Clerical and Other Office Salaries 7,0002400 Maintenance and Operation Salaries :46,0002500 Food-Serviceitalraries 5,0002600 Transportation Salaries 5,0002900 Other Classified Salaries 5003100 State Teachers' Retirement System Fund 11,9003200 Public Employees' Retirement Fund 2,0003300 Old Age, Survivors, Disability, and Health Insurance 1,5003400 Health and Welfare Benefits3600 Workers' Compensation Insurance 9004100 Textbooks 2,0004200 Other Books 5004300 Instructional Materials andSupplies 2,5004500 Other Supplies 8004800 Equipment Replacement 6,0005100 Contracts for Personal Services of Consultants, Lecturers,

and Others 5005200 Travel and Conference Expense Reimbursed 300

$49-79309 137 VI-13

5300 Dues and Memberships $ 2005400 Insurance 1,000

5600 Utilitiei and Housekeeping Services 5,000

56430 Contracts, Rents, and Leases 4,500

5700 Legal, Election, and Audit Expenses 500

5800 Other Services and Expense 4.500

5900 intsrProwam Charges and Credits for Direct Services _06100 Sites and Improvement of Sites 2,500

6200 Buildings and Improvement of Buildings 22,500

6300 Books and Media for New or Expended Libraries .1,500

6400 Equipment \ 7,800

7200 Outgoing TuitionI 30,500

7900 Appropriation for Contingencies 12,000

The preceding journal entry is similar to the one recording estimated income except that the totalof appropriations is debited to the Unappropriated Fund Balance account. The total appropriationsto all accounts in the Appropriation Ledger must agree with the balance in the General Ledgercontrolling account, Appropriations.

Posting the General Ledger. The journal entry for recording the approved appropriations isposted to the General Ledger in the same manner as the original opening entry and the entryrecording estimated income, as has been done in these examples:

Account 9710 Unappropriated Fund Balance Pagel

Date Reference Debit Credit Balance Dr/Cr

7-1-73 1 1 S 94,564.86 S 94,554.86 Cr

J 2 641,264.00 735,818.86 Cr

1 3 S615,400.00 120,418.86 Cr

Account 9820 Appropriations Page 1

Date Reference Debit Credit Balance Dr/Cr

7-1-73 J 3 $615,400.00 $615,400.00 Cr

Note that the debit to the Unappropriated Fund Balance account has been subtracted from theprevious credit balance to produce a new credit balance of $120,418.86, the remainingunappropriated fund balance after till estimated income and budgeted appropriations have beenposted.

Posting the Appropriation Ledger. The subsidiary Appropriation Ledger is posted from thejournal entry in a manner similar to ilat used for posting estimated income as shown in thisexample:

Account 1100

APPROPRIATION LEDGER

Terms' Salaries Page 1

Unencum-

Refer- Appropri- ii:ncurn- Encumbered Expended bared

Date once ation bran= to date Expended to date balance

7-1-73 J 1 $360,000.00 $360,000.00

X38VI-14 0$4

The preceding form ditTen from the Income Ledger form because it must carry space for enteringencumbrances as they occur, as well as expenditures. The amount appropriated for this account hasbeen entered in the "Appropriation" column and again in the "Unencumbered balance" column. Asamounts are later entered in the "Encumbrance" or "Expenditure" columns, the "Unencumberedbalance" column will be adjusted accordingly.

When appropriations are allocated to programs, each of the program ledger cards is posted withits respective appropriation. An example of a possible program ledger card is displayed in theillustration on page VI-16.

It should be noted that the appropriation to a program is a collection of portions of single objectsof expenditure (such as teachers' salaries) that are controlled with the Appropriation Ledger. Theprogram appropriation Is the total of all of the direct expenses expected to be incurred on behalf ofthe program.

Because the Appropriation Ledger controls expenses by objects, it is not essential that expensesalso be controlled by program when a district records expenditures by site (or location). Control ofprogram expenses can be delegated to the principals (or site managers) within the limits of fixedobject appropriations. For example, if a given school (site) is budgeted $75,000 in instructionalsupplies, this amount will provide district control on the site on this object. The site may allocatethis $75,000 to its sewed programs, and the district may record these allocations as part of theappropriations to the site's programs. Districts using manual or bookkeeping machine systems neednot control the amount of instructional supplies appropriated for a particular program because theywill be able to control the total appropriation to the site.

If the district controls only on objects, then the principal or site manager will have to comparethe program reports to the program budgets to observe discrepancies in an object of any particularProgram.

Recording the Approved BudgetReserves

Reserves are portions of the balance remaining as unappropriated funds that are not available forappropriations, such as amounts in the Revolving Fund, Stores, and Prepaid Expense accounts. AGeneral Reserve account is recommended to help finance the district in the year following, prior toreceipt of that year's income.

The values to be set aside in these reserves are contained in the official budget, column 2,opposite Ending Balance. These are used to prepare the journal entry, as in this example:

arty Account Debit Credit

7-1-73 9710 Unappropriated Fund Balance $120,419.009610 Reserve for tt.nicing Capital $ 2,072.009630 General Reserve 118,347.00

To record reserves for Working Capital and General Reserve, fiscalyear 1973-74, as contained in the approved budget

This journal entry is then posted to the General Ledger in the usual manner:

Account 9710 Unappropriated Fund Balance Page 1

Date Reference Debit Credit Balance Dr/Cr

7-1-73 J 1 $ 94,564.86 $ 94,564.86 CrJ 2 641,284.00 735,818.86 CrJ 3 $815,400.00 120,418.88 CrJ 4 120,419.00 0.14 Dr

e/84 VI-15

139

7 *7

PROGRAM LEDGERProgram A

Account:Page 1

Appropriation: $32,000.00

EncumbrancesRefer-

Date ence Description Reserved Cancelled

7-1.73 J 3 Budget roper (Optional)talon Grey bemernorrandum only)

7-31-73 PJ July payrollteachers' salaries

Certificatedsalaries and

benefits

$32,700

1,800

Classifiedsalaries and

benefits

$4,300

Books, sup-plies and

fiqU Montreplacement

$2,500 .

Contractedmaims

andother

$1,600

Capitaloutlay

81,000

T4

DinaAvailable supportbalance chervil

$32,000 $1,000

30,200

14j

_

A

Account 9610 Reserve for Working Capital Page 1

Date Reference

7-1.73 J4Debit Credit Balance Dr/Cr

$ 2,072.00 $ 2,072.00 Cr

Account 9630 General Reserve Page 1

Date Reference Debit Credit Balance Dr/Cr

7-1.73 J 4 $118,347.00 $118,347.00 Cr

Note that the amount debited to the Unappropriated Fund Balance account is -slightly greaterthan the previous balance of that account, and this results in a debit balance of 14 cents. Smalldiscrepancies are likely to occur because the district's books are maintained in exact amounts,including cents, while the official budget form is made out to the nearest dollar only.

At this point the General Ledger has been opened, and the official budget has been recorded. Atrial balance will show the net results of the entries made thus far. The trial balance is a list of theGeneral Ledger accounts and the debit or credit balance for each account. The total debits and thetotal credits must be equal, indicating a balanced General Ledger. The trial balance of the GeneralLedger at this point looks like this:

Account Debit Credit

9110 Cash in County Treasury $100,042.679130 Revolving Cash Fund 500.009140 Cash Collections Awaiting Deposit 24.179160 Accounts Receivable 1,597.889170 Due from Other Funds 894.399220 Prepaid Expenses 1,572.389510 Accounts Payable $ 9,763.469520 Due to Other Funds 113.189610 Reserve for Working Capital 2,072.009630 General Reserve 118,347.009710 Unappropriated Fund Balance 0.149810 Estimated Income 641,264.009820 Appropriations 615,400.00

$745,695.63 $745,896.83

The appropriations, having been posted both to the program ledgers and to the subsidiaryappropriation ledgers (objects of expenditure), should be checked to assure that the two are equal.

Recording Encumbrances

Effective expenditure control requires not only the recording of cash expenditures and thecharging off of assets and prepaid expenses but also the recognizing of expense obligations.

Encumbrance procedures that serve to reserve or restrict portions of the budget appropriations ofthe district for which definite commitments or contractual obligations have been made may beincorporated into the accounting system of a school district.

The method of determining amounts of encumbrances to be entered into the accounts may varywith the accounting methods used in the district and with the type of transactions beingencumbered.

1424/84 VI-17

Encumbrance Summary

Oassificetion:

Name- 1100 1200 1300 1700

Totals,1000Month Year Month Year Month Year Month Year

Superintends*Bartlett, James $1,050.00 $12,600.00 $ 12,600.00

Assistant SuperintendentGarcia, Fred 750.00 9,000.4 9,000.00

PrincipalsCampbell, George $ 600.00 $ 8,000.00 8,000.00Harmon, Robert 600.00 6,000.00 8,000.00Hotrod, Frank 500.00 6,000.00 8,000.00Lawrence, Charles 500.00 8,000.00 8,000.00

SupervisorsEvans, Raymond $ 450.00 $ 5,400.00 5,400.00Johnson, Arthur 500.00 6,000.00 6,000.00Pont, Elizabeth 400.00 4,800.00 4,600.00Sorenson, Albert 350.00 4,200.00 4,200.00Wade, Johnson 300.00 3,600.00 3,600.00

Teachers .

Alter, Ruth $ 350.00 $ 4,200.00 4,200.00Bennett, Betty 350.00 4,200.00 4,200.00Curren, Patricia 375.00 4,500.00 4,600.00

.

Total encumbered 30,000.00 360,000.00 2,000.00 24,000.00 '2,000.00 24,000.00 1,800.00 21,600.00 429,600.00

7-15-73Bennett, Betty

resipatlon 350.00 4,20040 4,200.0044 -

Totals 29,850.00 355,600.00 2,000.00 24,000.00 2,000.00 24,000.00 1,800.00 21,600.00 425/400.00

7-20-73

Thompson, Ted 450.00 5,400.00 5,400.00

Totals $30,100.00 $361,200.00 $2,000.00 $24,000.00 $2,000.00 $24,000.00 $1,800.00 $21,600.00 $430,900.00

143144

Because districts may need to distinguish reservations or restrictions of appropriations fromexpenditures, it is recommended that Encumbrances and Reserve for Encumbrances accounts

in the General Ledger and that encumbrance amounts in the appropriations subsidiaryaccounts and the program ledgen be recorded in a separate column or in such a manner that theymay be distinguished from actual expenditures.

Encumbering programs is optional since objects may be encumbered and controlled. Districtswith manual and bookkeeping machine systems that break coats down by sites (or locations) willfind encumbering programs rather difficult; whereas districts with data-processing equipment will beable to encumber programs at the same time they encumber their appropriation ledger objects ofexpenditure.

Encumbering of salaries. At the beginning of each year, the total annual salaries Orperionntiemployed for that year may be determined for purpcs of encumbering appropriations for payingthese salaries during the year. Similarly, the total monthly salaries of these personnel should beobtained for the purpose of removing that amount of encumbrance when a monthly salary paymentis made. Totals of the annual and monthly salaries must be adjusted for personnel changes andsalary rate changes.

Although the salary encumbrance summary may differ in detail depending on the methods ofaccounting used by the district, a schedule such as that illustrated in the Certificated PayrollEncumbrance Summary on page VI-18 may adequately serve:this purpose. Basic requirements are acomplete accounting for all personnel having salaries to be encumbered, a grouping of these salariesto provide monthly and annual salary totals by budget classifications, and provisions for recordingchanges in personnel and salaries.

The Certificated Payroll Encumbrance Summary illustrates the adjustment in encumbrance totalsthat must be recognized when personnel changes occur.

Journal entries to Lecord the salary encumbrance transactions shown in the Certificated PayrollEncumbrance Summary are as follows:

112:Date Account Debit Oleic

7-1-73 9830 Encumbrances 8429,600.009620 Reserve for Encumbrances 8429,600.00

6/84

Account Appropriation Ledger1100 Teachers' Salaries $360,000.001200 School Administrators' Salaries 24,000.001300 Supervisors' Salaries 24,000.001700 Superintendents' Salaries 21,600.00

To record salary encumbrance for certificated staff employed 7-1-73

J 13:7-15.73 9620 Reserve for Encumbrances $4,200.00

9830 Encumbrances $4,200.00

Account Appropriation Ledger1100 Teachers' Salaries $4,200.00

To cancel 12 months' salary encumbrance for B. Bennett, resignation, 7-15-73

1 14:7-20-73 9830 Encumbrances $5,400.00

9620 Reserve for Encumbrances $5,400.00

145 V1- 1 9

Appropriation Ledge1100 Teethes's' Salaries $6,400.00

To estibllsh salon, enew,rente fax 12 months' ;Nyman* of T. Thompson,employed 740-73

The posting of the preceding entries to the Ge Ledger Is as follows:

Account 9630

Date Reference Debit

7.1737-15-737.20-73

J 12J 13.1 14

$429,600.00

6,400.00

Credit

$4

page 4

Balance DriCr

.00

Account 9620 Reserve for Encumbrances

9429,600.00 Dr

426,400.00 Dr

430,800.00 Dr

Date Reference Debit Credit , Balance

7 -1 -73 .1 12 $429,600.00 $429,600.007-15-73 .1 13 64,200.00 425,400.007.20-73 J 14 5,400,00 430,800.00

Dr/Cr

CrCrCr

The posting of the Teachers' Sabuies account to the subsidiary Appropriation Ledger is illustratedas follows:

APPROPRIATION LEpGER

Account 1100 Teachers' Salaries Page5

Unencum-R efer- Appropri- Encum- Encumbered Expended bared

Date ence etion broncos to date Expended to date balance

7-1-73 .112 $500,000.00 $429,800.00 $429,800.00 $70,400.007-15-73 J 13 500,000.00 4,200.000r 426,400.00 74,600.007-20-73 .114 509,000.00 9,400.00 430,1000.00 69,200.00

In the foregoing illustration, it has been assumed that the changes in personnel were made 'priorto payment of any payroll in that year. It is important, however, that encumbrances be reduced bythe unpaid installments of the annual salaries of personnel leaving the payroll and Increased for theunpaid installments ci personnel being added to the payroll.

Adjustments of encumbrances for salaries paid is discussed in the section, RecordingEncumbrance AdjustmentsSalaries.

Encumbering of other expenses. Effective expenditure control requhes the establishment of aprocedure to reserve or restrict appropriations for obligation of nonsalary types of expenses as wellas salaries.

If the purchase orders are drawn in order to confirm orders for all materials and services to bepurchased by the district, they may he used for encumbrance purposes. A sample of a purchaseorder is shown on page VI-21.

The methods of encumbering purchase orders may vary from the direct posting to theAppropriation Ledger subsidiary accounts from the individual purchase orders to some form ofsummary recording for groups of purchase orders. When a record of the individual purchase orderscontained in a summary recording is desired, a Purchase Order Encumbrance Summary such as theone on page VI -21 might be used.

V1-20 146 6/14

1,49kvi . otv.os,r x 4: -7,,ktES.X,'"

PURCHASE ORDER

To: Student Supply Company Date:

Orderedschool

From: School

P4kt. 2

JUly 10, 1973

by

District

Ammon 4300ApproprimionLedger

Deliver to: 100 Main Street

Received Quantity Unit ItemUnitprice Amount

Amountcancelled

85 1,000100300

ReamOrosBox

Newsprintifit school pencilsCrayons

$0..603.000.30

$800.00300.00

. 90.00

1141.87

Payment Record:

Date: July 20

Amount: $41.67

Punliase Order Encumbrance Summary For July, 1973

Vendor's Name'Appropriationamount number Date

Purchase ordernumber

Amount ofencumbrance

Justrite Roofing Company 4500 10 1 ft 805.83Student Supply Company 4300 11 2 990.00L.A. Detergent Cariosity 4500 26 3 50.00

Total $1,845.63

A journal entry to record the encumbrance information contained in the summary is illustratedas follows:

8/14

.115:Date Account

7.1 -73 9830 Encumbrances9620 Reserve for Encumbrances

Debit

$1 ,E146 .83

Credit

61,845.63

Account Appropriation [.eager4300 Instructional Supplies $900.004500 Other Supplies 855.63

To record purchase order encumbrances for July 1, 1973

147 V1-21

The posting of the Other Expenses of Instruction item to the account in the subsidiary Appropria-tion Ledger is illustrated as follows:

APPROPRIATION LEDGER

Account 4300 Instructional Supplies Page 5

UnefICM-Appropri- Encum- Encumbered Expended bered

Date Reference atiOrl Winces to date Expended to date balance

7-1-73 .115 $5000.00 $090.00 $990.00 $4,010.00

The instructions for recording encumbrance adjustments in this section outline the procedureused to adjust encumbrances when payments are made involving encumbered purchase orders.

Recording Income aid Giber Cask Receipts

Source documents for posting income are apportionment notices from the county superintendentof schools for deposits made directly to the county treasury or copies of receipts for moniesreceived directly by the district.

An apportionment notice from the county superintendent of schools is illustrated in the TypicalApportionment Notice on this page.

Each of the items of actual income should be accounted for separately so that they may becompared with income estimates. This is accomplished by posting receipts to the Income Ledger.The total from any given apportionment notice is posted to the General Ledger, and individualitems are posted to the subsidiary Income Ledger.

TYPICAL APPORTIONMENT NOTICk

County of

To School District

This is to certify that income noted below has been received and has been placed to the credit ofyour district on

Dote

8611 Basic and Equalization Aid end Supplemental Support . .

8616 Educationally Handicapped Minors8822 Allowances for Transportationwo Tax Relief Subventions8/10 Community College Tuition Tax8611 District Secured Roll Taxes8812 District Unsecured Roll Taxes

Other Income (Describe)

Preparing the journal entry for income deposits made directly in the county treasury. The journalentry to record income receipts ties the General Ledger and subsidiary ledger accounts and theamounts for each as in the following example:

148VI-22 6/24

A

I.

- r

Dair Account Debit Credit7-20-73 0110 Cash in Treasury

9840A Skibeidisry Imam Ledger

8811 District Secured RoN Taxes8b12 District Unsecured Roil Taxes8611 Basic and Equalisation Aid

To record income received on apportiossnent notice dated 7.20-73

The journal entry is posted to the Genend Ledger in the usual manner.

The subsidiary Income Lodger is posted from the journal entry in a manlier shills's' to that used\for posthkg estimated income. Each account is posted to show, in the amounts received portion, theamount of the ledgen that has been 'carried in the journal entry, as has been done in the followingexample:

INCOME LEDGERAccount 8811 District Sec urrd Roll Taxes Pap 6

Estimated Amounts Total received Estitnated toDate Reference income receiVed to date be received

7.1-73 .12 $345,888,00 8345888.007-2073 J.....

INCOME LEDGERAccount 8812 District Unsecured Roll Taxes Page 1

Estimated Amounts Total received Estimated toDate Reference income received to date be received

7.1-73 .12 92,700.00 82,700.007-20-73

INCOME LEDGERAccount 8611 Basic and Equalization Aid Pecs 1

Estimated Amounts Total received Estimated toDate Reference income received to date be received

7-1-73 .12 8277,628.00 8277,628.00

A summary of receipts issued for cash received directly by the school district serves as the basisfor preparing the journal entry to record this type of income and other cash receipts. Abatements ofexpenditures are treated in Part III of this manual. If this summary is a formal record, it might looklike this example of a Cash Received Journal:

6184 149 VI-23

tok..1.14

\

Cash Received Jaime, Month of July, 1973

Date Description Received

Current income

Account Amount

Abatements of General Ledgerexpenditures

Account Amount Account Amount

7-3-73 Receipts 8110 5800Nos. 8801 -6815 8842

88501.4..,..,

43004300

. .1.

43008880

Totals

Preparing the journal entry to record cash received directly by the school district. The journalentry to record actual income and other cash receipts received directly by the school district liststhe General Ledger and subsidiary ledger accounts and the amounts for each. For example:

Date Account

7.31-73 9110 Cash in County Treasury9840 tricorns9850 Expenditures

Account Subsidiary Income Ledger8110 Maintaksance and Operation (Public Law

81-874)8842 Sale of Equipment and Supplies8850 Rentals8871 Adult Education Fees8880 Miscellaneous

SubsicHary Appraoriedon Ledger4300 Instructional Supplies5800 Transportation Payments from Other Districts

To record receipts numbers 8801-6815

Debit Credit

The General Ledger is posted in the usual manner. The subsidiary Income Ledger is posted in thesame manner as that illustrated under income deposits made directly in the county treasury.

The subsidiary Appropriation Ledger is posted in the same manner as that shown underexpenditures, as in the following example:

APPROPRIATION LEDGER

Account 4300 Instructional Supplies Page !2

Refer-Date ence

7-31.73

V1-24

Encurn- Limida-brances tions

Outstandingerxxlm- Expended

Expended brances to date Budget

Unencten-bored

balance

150

A

II 1

Account 5800APPROPRIATION LEDGER

Payments from Another School District PaPe 1

Outstanding U nencu m-Refer- Encurn- Liquida- encum- Expended bared

Date ence brances lions Expended brances to bate Budget balance

7-31-73

Record* Expenditures and OtherDisbursenienbSslaries

Salary expenditures are generally more efficiently posted by total from the payroll paymentorder, or similarly titled listing, which is an itemized, detailed list of individual salaries for aparticular payroll. A summary of amounts to be charged to the various expenditure classifications isneeded for this procedure (see California School District Payroll Payment Order, page V1-26).

Very rarely, such as when accounting salaries for a one- or two-teacher school, individual salariespaid might be entered directly in the General Journal.

Preparing the journal entry. The journal entry to record payroll payments lists the GeneralLedger and subsidiary ledger accounts and the amounts for each, as in the following example:

Date Account Debit Credit7-31-73 9850 Expenditures $40,275.00

9110 Cash in County Treasury $40,275.00

Account Appropriation Ledger1100 Teachers' Salaries $32,000.001200 School Administrators' Salaries 1,600.001300 Supervisors' Salaries 2,000.001600 Physical and Mental Health Salaries 125.001800 Other Certificated Salaries of District Administration 800,002200 District Administrative Salaries 250.002300 Clerical Salaries 650.002400 Maintenanciand Operation Salaries 2,850.00

To record expenditures for payroll listing number 1 for the month of July

Posting the General Ledger. The journal entry for payroll expenditures is posted to the GeneralLedger in the same manner as previous entries, as in the following example:

Account 9850 Expenditures Page 1Date Reference Debit Credit Balance Dr/Cr

7.31-73 J 8 $ 40,275,00 $ 40,275.00 Dr

Account 9110 Cash in County Treasury Page 1

Date Reference Debit Credit Balance Dr/Cr7.1-73 J 1 $100,042.67 $100,042.67 Dr7-31-73 J 8 $40,275.00 59,767.67 Dr

Note that the posting to the cash account is a credit entry that deducts from the previous balanceto give a new debit balance of $59,767.67.

1516/84 'VI-25

California School District Payroll Payment Order

Employee nameWarrantnumber Occupation or title

Expendi-trre

class'.fication

Periodending

Grossearnings

SocialSecurity

Retire-merit

With-holding

tax Other Net pay

Abbott, Ellen 2200 Teacher 1100 7-31-73 $ 500.00 $ 40.00 $ 80.00 $ 21.00 $ 359.00Adams, George 2201 Custodian 2400 350.00 S 9.00 21.00 18.00 12.00 290.00Allen, Rose 2202 Teacher 1100 475.00 35.00 68.00 16.50 355.60Arnold, Robert 2203 Teacher 1100 550.00 48.00 00.00 25.00 417.00Ashworth, James 2204 Assistant Superintendent 1700 900.00 70,00 150.00 28.00 662.00Bailey, John 2205 Teacher 1100 5E1,00 50.00 75.00 22.50 432.50Banner, Roger 2208 Principal 1200 750.00 62.00 90.00 26.00 572.00Boyd, Alice 2207 Secretary 2300 300.00 7.50 16.00 21.00 12.00 243.50Brown, Thomas 2208 Teacher 1100 530.00 45.00 61.00 18.00 408.00Carter, Mabel 2209 Teacher 1100 500.00 42.00 85.00 24.00 389.00Cross, Arthur 2210 Custodian 2400 375.00 10.00 22.50 12.00 18.50 312.00Curran, Jane---...........2211 Teacher 1100 475.00 38.50 60.00 21.00 355.50

Totals 7-31-73 66285.00 $26.50 $490.00 $780.00 $244.50 84,764.00Expenditure Classification Summary: 1100 7-31-73 3,610.00

1200 750.001700 900.002300 300.002400 725.00

$6,285.00

152 153

Posting the Appropriation Ledger. Entries in the subsidiary Appropriation Ledger are made in theexpenditure column in each case, as shown in the following example:

APPROPRIATION LEDGER

Account 1110 Teachers' Salaries Page l

Refer-Date ence

J3J5J8

7.1-73

7-31-73

Appropri-ation

$390,000.00390,000.00390,000.00

E ncum-

brancesEncumbered

to date

Unencum-Expended bered

Expended to date balance

$390.000900.00

$32,000.00 32,000.00cr$390,000.00 $390,000.00

390,000.00$32,000.00

In normal procedures the liquidation of an amount corresponding to the payment takes placesimultaneously with this posting. The liquidating entry is described in the section headed RecordingEncumbrance AdjustmentsSalaries, following. For purposes of explanation, this account will becarried this way until the liquidating entry is posted.

Note that the "Appropriation," Encumbered-todate," and "Expended-to-date" columns arecarried forward with each posting.

Entries in the program ledger are posted by object classification in the appropriate columns in theprogram ledgers, then subtotaled on the object of expenditure card in the Appropriation Ledger.

The total postings to the program ledgers for the object classification (teachers' salaries) willamount to $32,000, which can be subtotaled in the Appropriation Ledger (see sample programledger, page VI-16).

4111 Recording Expenditures and Other DisbursementsOther

Payments to vendors are usually made at regular intervals, monthly or oftener, and listed on awarrant register that can be used as the source to enter the total expenditure. Like the payrollcharges, the amounts to be charged to the various expenditure classifications will need to besummarized (see California School District Warrant Register Number 1 on page VI-28).

Other expenditures, such as a district's retirement payments, repayments on loans, and the like,which are disbursed at the county level, may be entered individually as reports are received from theoffice of the county superintendent of schools. Expenditure transfers between funds of a districtrequire a similar entry. It is possible. to include all such items in one listing and to enter the total inthe General Journal with a summary of amounts to be charged to the various expenditure classes. Ineither procedure, reference to the original report or notice should be made, and such documentsshould be kept readily available.

Preparing the journal entry. The journal entry to record vendor payments or other expenditureitems lists the General Ledger and subsidiary ledger accounts and the amounts for each. This journalentry is posted to the General Ledger and the Appropriation Ledger as illustrated in the entries thatfollow:

Date

7-31-73

Account Debit Credit

9850 Expenditures $6,245.009840 Income 500.009100 Cash $6,745.00

Account Appropriation Ledger4500 Other Supplies $1,620.004100 Textbooks 350.00

.--,=r14

4300 Instructional Maters and Supplies $ 475.005500 Utilities and Housekeepint, Services 1,300.006200 New Buildings end Improvement of Buildings 2,600.00

Income Ledger8110 Maintenenca and Operation (Public Law

81 874) 600.00

To record expenditures for Warrant Register Number 1 for the month of July

CALIFORNIA SCHOOL DISTRICT

Warrant Register Number 1

Wamtntnumber Vendor

Expenditureclassification

Date: July 31, 1973

Amount

1 Aldrich & Aldrich, Inc. 4300 $ 48.06'I American Book Co 4100 350.003 Best Music Company 4300 210.004 E.P. Finigen Company 8200 2,500.005 Office Supply Co 4500 65.006 Pacific Gas & Electric Company 5500 700.007 Pacific Telephone & Telegraph Co 5600 600.008 Read's Fence Company 4500 875.009 Sun Custodial Supplies 4600 680.00

10 Taylor's School Supplies 4300 216.9411 U.S. Treasury

(Abatement of income) 8110 600.00

Total $8,745.00

Expenditure Classification Summary;

4100 Textbooks $ 350.004300 Instructional Materials and Supplies 475.004500 Other Supplies 1,620.005500 Utilities and Housekeeping Services 1,300.006200 New Buildings and Improvement of Buildings 2,500.00

$8245.00

Income Classification Summary:8110 Maintenance and Operation (Public Law 81-874)

abatement 500.00500.00

$8,745.00

Posting the Income Ledger. This posting to the subsidistry Income Ledger is an example of anabatement of income.

15 5VI-28 6/44

INCOME LEDGER

Account 8100 Maintenance and Operation (Public Law 81-874) Page 1

Estimated tobe received

$2,500.00100.00600.00

Date ReferenceEstimated

incomeAmountsreceived

Total receivedto date

7-1-73

7-31-73

J 1

J.._

L._

$2,500.002,500.002,500.00

$2,400.00500.00 Cr

$2,400.001,900.00

Recording Encumbrance AdmitsSolories

The amount of encumbrance to be adjusted or liquidated when salary payments are made is thesame amount as is being paid, provided\ such amounts have been encumbered. This procedure willleave the proper balance of encumbrance for each succeeding month if there is no change in rate ofpay.

Further adjustment is necessary for changes of contract, terminations, and the like. It is generallypreferable to liquidate the exact amount of the payroll posting and to pick lip additionaladjustments in a separate posting from a list of changes. For example, a payroll expenditure of$40,275 represents the regular monthly payroll for salaries encumbered for the year. However,because one employee terminated in July and received less than a full month's salary, the differencebetween the individual amount encumbered, $300, and the amount paid and liquidated, $200,represents a cancellation of $100 to encumbrances for July in addition to the encumbrance for therest of the year, $3,300, or a total cancellation of encumbrances in the amount of $3,400. Theperson replacing this employee was paid $50 in July and will be paid $2,750 for the rest of the year.This is an additional total encumbrance of $2,800. The net adjustment to encumbrances is areduction of $600. The Certificated Payroll Encumbrance Summary illustrated in this section (seepage VI-18) provides for a method of adjusting salary encumbrances.

The use of some machine systems makes it more practical to liquidate all encumbrances forsalaries at the time payroll expenditures are posted and to rencumber the adjusted amounts for theremainder of the year.

Preparing the journal entry. The journal entry to record encumbrance adjustments lists theGeneral Ledger and subsidiary ledger accounts and the amounts for each, as shown in the followingexample:

6/8410-78569

Date

7-31-73

Account Debit Credit

9620 Reserve for Encumbrances $40,275.009620 Reserve for Encumbrances 600.009830 Encumbrances $40,275.009830 Encumbrances 600.00

Account Appropriation Ledger1100 Teachers' Salaries $32,000.001200 School Administrators' Salaries 1,600.001300 Supervisors' Salaries 2,000.001600 Physical and Mental Health Salaries 125.001800 Other Certificated Salaries of District and

County Administration 800.002200 Office of County Superintendent and District

Administrative Personnel Salaries 600.002200 Office of County Superintendent and District

Administrative Personnel Salaries 250.00

156VI-29

2300 Clerical Salaries $ 850.002400 Maintenance and Operation Salaries 2,850.00

To record salary encumbrance liquidations and adjustments for the monthof July

Posting the General Ledger. The journal entry for salary encumbrance liquidations andadjustments is posted to the General Ledger as usual.

Posting the Appropriation Ledger. Entries in the subsidiary Appropriation Ledger are made in the

"Encumbrances" column in the following example:

Account 1 100

APPROPRIATION LEDGER

Teachers' Salaries Page 1

Refer- AppropriDafe ence ations

Encum-brances

Encumberedto date Expended to date

Unencum-Expended bered

balance

7-1-73 J 3 $390,000.00.15 390,000.00

7-31-73 J 8 390,000.00.1 10 390,000.00

$390,000.00 $390,000.00390,000.00

-32,000.00 358,000.00$32,000.00 $32,000.00

32,000.00

$390,000.000.00

32,000.00 Cr0.00

APPROPRIATION LEDGER

Account 2200 District Administrative Salaries Page 1

Date

1-1-73

7-31-73

Reference

J3J5

8.110.110

Approprt-ation

Encum-brances

Encumberedto date

Expended

Expended to date

Unencumbered

balance

$3,600.00 $3,600.00

3,600.00 $3,600.00 $3,600.00 0.00

3,600.00 3,600.00 $250.00 $250.00 250.00 Cr

3,600.00 --250.00 3,350.00 250.00 0.00

3,600.00 -600.00 2,750.00 250.00 600.00

The control account, Encumbrances, in the General Ledger can be proved by adding the totals ofthe "Encumbered-to-date" column in each of the subsidiary Appropriation Ledger accounts.

Recording Encumbrance AdjustmentsOther Than Salaries

The amount of encumbrance to be adjusted or liquidated when vendor payments or otherexpenditures are recorded is the amount originally encumbered for the specific items. Thus, if apurchase order was originally encumbered for $100 but the actual payment was $99.50, the original$100 encumbrance is liquidated. Partial payments on an order are liquidated in the same amountiasoriginally encumbered for items being paid, and the balance of encumbrance is liquidated when thefinal payment is made.

Depending on the encumbrance method being used, the adjustments or liquidations are postedeither directly from the purchase order as illustrated on page VI-21 or from a Purchase OrderLiquidation Summary listing the purchase orders being paid. The same form can be used as thatshown for the Purchase Order Encumbrance Summary on page VI-21. The warrant register formshown on page VI-28 might also be used to indicate liquidations of encumbrances by addingcolumns for purchase order number, amount encumbered, and encumbrance classification.

VI 30157

6/S4

0.7= i-!r7 - - Sr a

Here again it is true that with some machine systems it is more practical to liquidate allen cumbrances. and to reencumber those that are outstanding after the paid items have been deleted.If an encumbrance amount is cancelled or changed because items ordered are unavailable or pricesare changed, the adjustment is recorded in the same manner as the routine liquidations followingpayments.

Preparing the journal entry. The journal entry to record encumbrance adjustments lists theGeneral Ledger and subsidiary ledger accounts and the amounts for each, as shown in the followingexample:

Date Account Debit Credit

7.31-73 9620 Reserve for Encumbrances $6,245.009830 Encumbrances $6,245.00

Account Appropriation Ledger4100 Textbooks $ 350.004300 Instructional Materials and Supplies 475.004500 Other Supplies 1,620.005500 Utilities and Housekeeping Services 1,300.006200 Buildings and Improvement of Buildings 2,500.00

To record encumbrance liquidations (other than salaries) for the month of July

The journal entry for encumbrance liquidations (other) is posted to the General Ledger in theusual manner.

Posting the Appropriation Ledger. Entries in the subsidiary Appropriation Ledger are made in theEncumbrances column, as shown in the following example:

Account 4300APPROPRIATION LEDGER

Instructional Supplies Page 1

Unencum-Refer- Appropr i- E naim- Encumbered Expended bered

Date ence at iOf 1 brances to date E xpended to date balance

7 -1 -73 .13 $2,500.00 $2,500.00.1 6 2,500.00 $750.00 $750.00 1,750.00

7-31-73 .1 9 2,500.00 750.00 $475.00 $475.00 1,275.00J 11 2,500.00 -.475.00 275.00 475.00 1,750.00

Recording Other Adjustments

Changes, or adjustments, must often be made to entries recorded in the General Ledger andsubsidiary ledgers. Some a the more common adjustments are cited in the following paragraphs.

Recording adjustments to estimated income. When information is received that income willexceed the original estimate in the official budget, a new estimate of income is made, and theincrease is recorded in the General Ledger and the Income Ledger. The increase in estimated incomeis recorded as follows:

Date Account Debit Credit

5-31-74 9810 Estimated Income $1,100.009710 Unappropriated Fund Balance $1,100.00

Account Income Ledger8611 Basic and Equalization Aid and Supplemental Support $1,100.00 Or

To record revised estimate of a state apportionment

6/84 VI-31

158

This entry increases the estimated income in the General Ledger and in the Income Ledger. Italso inaeases the amount available for appropriation as indicated by a credit balance in theUnappropriated Fund Balance account. (Note that the entry simply records the amount availablefor appropriation. Actual appropriation may be made by governing board action only, as prescribedin Education Code sections 42610 and 42602.)

When a revised income aMtate indicates a decrease in amount of estimated receipts, the decreaseis recorded in a similar manner, as fbtiows:

Date Account Debit Credit

5-31.74 9710 Unappropriated Fund Balance $1,100.009810 Estimated income $1,100.00

Account Income Ledpr8611 Basic and Equalization Aid $1,100.00 Cr

To record revised estimate of basic and equalization aid

Note that when this entry is posted to the General Ledger, a debit balance in the UnappropriatedFund Balance account usually results. A debit balance indicates that appropriations exceed availableresources and is a warning that expenditures must be controlled so that this amount remains asunexpended appropriations at the end of the fiscal year.

Recording adjustments to appropriations. Except when a revised approrgiation budget has beenadopted, adjustments involving changes in current appropriations will have no net effect on theGeneral Ledger balances. The changes will affect only the Appropriation Ledger, because the totalamount appropriated is not changed but is simply redistributed among the appropriations accounts:

Date Account Debit Credit

10.30-73 9820 Appropriations $500.009820 Appropriations $500.00

Account Appropriation Ledger6400 New Equipment $500.00 Dr

4800 Equipment Replacement 500.00 Cr

To record appropriation transfers adopted 10-30-73

Recording adjustments to expenditures. When information shows that an amount alreadyrecorded as an expenditure should be charged to some other expenditure account, the adjustment ismade without net effect on the General Ledger. The expenditures portion of the AppropriationLedger will reflect the change, as in the following examples:

Date Account Debit Credit

11-16-73 9850 Expenditures $25.009850 Expenditures $25.00

Account Appropriation Ledger4100 Textbooks $25.00 Dr

4200 Other Books I 25.00 Cr

To record correction of expenditures classification coding on warrant number12345, 10.15-73

153VI-32 6/54

6/14

Data Account Debit Credit

11.30-73 9850 Expenditures $200.009850 Expenditures $200.00

Account Appropriation Ledger1100 Teachers' Salaries $200.00 Dr1300 Supervisors' Salaries 200.00 Cr

To record portion of J. D. Smith's November salary as Teachers' Salariesbecause he substituted for A. B. Clark

Recording adjustments to stores.' Adjusting entries resulting from a stores operation are shown inthe next example. When a physical inventory reveals a stores overage or shortage, the amount mustbe recorded in the records. The usual practice is to adjust the StoresInventory and theStoresOverhead accounts.

Date Account Debit Cledt11.25-73 9210 StoresInventory $75.00

9210 StoresOverhead $75.00

To record stores average per inventory of 11.15-73

An inventory shortage is reflected by a similar entry, except that the debit and credit entries arereversed.

Periodically, the StoresOverhead account is cleared of its charges. This must be done at leastonce a year to assure that the year-end balance in the overall Stores account represents onlymaterial on hand in the warehouse and available for issue.

Clearing the StoresOverhead account requires an entry to distribute the balance of this accountto the various expenditure accounts. One of several methods may be used for determining thisdistribution. Regardless of the method used, the entry is made as shown in the following example:

Date Account Debit Credit

6-30.74 9850 Expenditures $1,500.009210 StoresOverhead $1,500.00

Account Appropriation Ledger4300 Instructional Supplies $1,000.00 Dr4500 Other Supplies 500.00 Dr

To distribute warehouse overhead expense for the fiscal year

Closing the General Ledger

The closing entries fall into two categories. The first category is the adjusting or the accrual ofcertain balance sheet accounts. The second category is the closing of all budgetary and operatingaccounts.,

Determining the adjusting entries. Adjustments of prior year accruals may become necessarybecause of errors in estimating the amounts to be accrued or changes resulting from informationavailable at a later date.

At year-end, amounts of income or transfers from other districts due and not yet received aredetermined and recorded in the current fiscal year. However, monies due from tax delinquencies arenot included, because tax income is recorded on a cash basis. Only those amounts that can be

160'VI-33

reasonably determined are recorded. The amount recorded as Accounts Receivable must agree withthe report filed with the county superintendent of schools.

Those amounts that are due and receivable from other funds of the district are recorded as Duefrom Other Funds rather than as Accounts Receivable.

Accounts Payable or Current Liabilities are amounts due but unpaid at year-end for goods andservices received during the year. The amounts set up as current liabilities must agree with thereport sent to the county superintendent of schools.

Those liabilities that are due and payable to other funds of a district are recorded as Due to OtherFunds, rather than Current Liabilities.

If the district maintains a Stores account, refer to Part V of this manual for information.If the proration for !repaid expense items is made at the time of the expenditure, no further

action is necessary at yearend. The prepaid expense proration schedules should be checked at thistime. If there is an error to be corrected or an adjustment to be made, the debit or credit will bemade to the Prepaid Expense account and the offset to the appropriate expenditure account.

The Reserve for Working Capital account is adjusted to reflect the net increase or decrease duringthe year.

The total amount of the General Reserve account is closed to Unappropriated Fund Balance, thetotal amounts in the Income and Estimated Income accounts are closed to Unappropriated FundBalance, and the total amounts in the Appropriations and Expenditures accounts are closed toUnappropriated Fund Balance.

Closing Accounts Receivable and Accounts Payable accounts. The closing entries are made asfollows:

Date Account

6-30-75 9160 Accounts Receivable9710 Unappropriated Fund Balance

To close additional Accounts Receivable collections

6-30.75 9710 Unappropriated Fund Balance9160 Accounts Receivable

To close unrealized Accounts Receivable collections

6-30-75 9710 Unappropriated Fund Balance9610 Accounts Payable

To close additional Accounts Payable payments

6-30.75 9510 Accounts Payable9710 Unappropriated Fund Balance

To close overestimated Accounts Payable payments

Debit Credit

When accounts are closed, the General Journal entries are made as illustrated in the followingexamples:

V[-34

TO CLOSE THE GENERAL RESERVE ACCOUNT

Date Account Debit Credit

6-30.74 9630 General Reserve9710 Unappropriated Fund Balance

To close the General Reserve account

161 6/84

'le, . :4146 , RC V A

:7W

6/84

TO CLOSE ESTIMATED INCOME AND INCOME

Date Account Debit Credit6-30-74 9840 Income

9710 Unappropriated Fund Balance9810 Estimated Income

Account Subsidiwy Income Ledger8110 Maintenance and Operation (Public Law 81-874) ,..1n8210 National Defenses Education Act

(Public Law 85484)8611 Basic Aid and Equalization Aid8616 Educationally Handicapped8622 Transportation

,...1.1

8811 District Secured Tax Roll8812 District Unsecured Tax Roll8880 "Miscellaneous Funds"8920 Other Tuition

Date

To close Estimated Income and Income to Unappropriated Fur! Balance

TO CLOSE APPROPRIATIONS AND EXPENDITURES

Account Debit Credit

6-30-74 9820 Appropriations9850 Expenditures9710 Unappropriated Fund Balance

Account Subsidiary Expenditures Ledger1100 Teachers' Salaries $360,0001200 School Administrators' Salaries 20,0001300 Supervisors' Salaries 25,0001400 Librarians' Salaries 2,0001500 Guidance, Welfare, and Attendance Salaries 10,0001600 Physical and Mental Health Salaries 1,5001700 Superintendents' Salaries 10,0001800 Other Certificated Salaries of District and County

Administration 5,0001900 Other Certificated Salaries 1,0002100 Instructional Aides' Salaries 2,0002200 Offices of County Superintendent and District

Administrative Salaries 3,6002300 Clerical and Other Office Salaries 7,0002400 Maintenance and Operation Salaries 36,0002500 Food Services Salaries 5,0002600 Transportation Salaries 5,00()2900 Other Classified Salaries 5003100 State Teachers' Retirement System Fund 11,9003200 Public Employees' Retirement Fund 2,0003300 Old Age, Survivors, Disability, and Health Insurance 1,5003400 Health and Welfare Plans 9003600 Workers' Compensation Insurance 9004100 Textbooks 2,0004200 Other Books 500

162 VI-35

4300 Instructional Materiels and Supplies 2,5004500 Other Supplies 8004800 Equipment Replacements 6,0005100 Contracts for Personal Services of Consultants,

Lecturers, and Others 5005200 Travel and Conferences Expense Reimbursement 3005300 Dues and Memberships -2005400 Insurance 1,00055()0 Utilities and Housekeeping Services 5,0005600 Contracts, Rents, and Leases 4,5005700 Legal, Election, and Audit Expenses 5005800 Other Services and Expense 4,5005900 Interpol:1gram Charges and Credits 06100 Sites and Improvement of Sites 2,5006290 Buildings and Improvement of Buildings 22,5006300 Books and Media for New or Expanded Libraries 1,5006400 New Equipment 7,8007200 Outgoing Tuition 30,500

Prepaid Expenses

Cash is often disbursed by school districts for services or materials, a portion or all of whichactually applies to a future fiscal period other than that in which the cash disbursement is made.The most common such disbursement is for insurance, the full premium of which is paidimmediately, but the coverage of which extends into future school years. Were the entire premiumcharged to the year in which the premium is paid, expenses for such a year would be overstated, anda comparison with years in which such premium was not paid would become invalid. For thepurpose, therefore, of including expenditures in the year that the services or materials werereceived, it becomes necessary to accrue as an asset the amount of cash disbursed for an itemallocated to a future year.

When the cash disbursement for an item as discussed above is made, it is necessary to credit thecash account for the full amount of the disbursement. The debit must be split to two accounts, thatportion which applies to the current school year being charged to current year expense appropriateto the item, and the remaining portion applicable to a future year charged to the asset accountentitled Prepaid Expenses, as in the following example:

General Lodger

Date Account Debit

7.15-73 9850 Expenditures $100.00

9220 Prepaid Expenses 400.009110 Cash in County Treasury

To record payment of a five-year insurance policy, one year ofwhich applies to the current year

Appropriation Ledger

Date Account Debit

7-15-73 5400 Insurance $100.00

To record payment of a five-year insurance policy, one year ofwhich applies to the current year

Credit

$500.00

Credit

VI163

36 6/84

At the end of the school year when the books are closed, the asset account, Prepaid Expenses, isincluded with other ending balances and becomes a part of the beginning balance for the nextschool year.

After the books are opened for the next school year, it is necessary to determine whether all or aportion of Prepaid Expenses applies to the current year. This amount must be charged to theappropriate expense account of the new year, leaving as a remainder in the asset account anyamounts not yet applicable. These, in turn, must be carried over as Prepaid Expenses to the nextschool year. To facilitate determination of the amount to charge to a year other than that in whichthe original cash disbursement was made, it is good practice to prepare a schedule of amounts andperiods applicable at the time when the original cash disbursement is made, as shown in thefollowing example:

PREPAID EXPENSES SCHEDULE

DatePolicy

number CarrierOveralltotal

Analysis of total applying to each succeeding year

Firstyear

Secondyear

Thirdyear

Fourthyear

Fifthyear

7-15-73 $400.00 $100.00 $100.00 .$100.00 $100.00

This schedule is retained for reference at the time of a future year charge -off to ensure that thecorrect amounts are charged to each succeeding year in which a benefit is received. The precedingschedule would be updated at the beginning of each school year by .educing the control total bythe amount of the first year succeeding, which is charged to expense, and by moving each figure in

el the next several columns one column to the left.To charge off the portion applicable to a new year at the beginning of that year, a journal entry is

made, with the debit to the appropriate expenditures account and the credit' to Prepaid Expenses.This should be one of the first entries.

Accounting for Stores

For those school districts that maintain central stores of materials, it would be inappropriate tocharge the amount of cash disbursed for stores as an expense for any given year. Instead, it isnecessary to charge as expense only the value of the stores issued during each year. The value ofstores paid for but not issued must be accrued as an asset to become a part of the ending balance atthe close of the school year. The same amount in turn becomes a part of the beginning balance ofthe new year when the books for the new year are opened.

Unless a Stores Revolving Fund has been established in accordance with provision; in theEducation Code, payments for stores are made from the General Fund, with the debit to stockpurchases within the Stores account and the credit to Cash, as in the next example:

Journal Entry

Date Account Debit Credit9-11-73 9210 Stores, purchases for stock $55.10

9110 Cash in County Treasury $65.10

To record supplies purchased for stock

When stock is issued, an entry must be made crediting stock purchases within the Stores accountand debiting the appropriate expense account. This may be done by posting detailed requisitions to

6/54

it--78586

164 VI-37

a special journal, the accumulated total of which is posted to the Genera! \Ledger atintervals. Such posting is shown in the following examples:

Stock Issued Ledger

monthly

DateRequisition

number School Account

9-7.73 12501 Roosevelt 4300 Instructional Materials and Supplies $ 2.729-9-73 332 Garfield 4500 Other Supplies 7.669-10-73 2661 Washington 4500 Other Supplies 12.01

-yr 32 Wilson 4300 Instructional Materials and Supplies ... 19.43

Monthly Journal Entry

Date9-30.73

Stock Issued Ledger Debit4300 Instructional Materials and Supplies $22.154500 Other Supplies 19.67

9210 Stores, withdrawals from stock

To record withdrawals of stores for the month of September, 1973

Stores Ledger

Date

9-11.739-30-73

Overheadreimbursed

Overheadexpense

Stockpurchases

Stockwithdrawals

Credit

$41.82

Totalstores

$55.10 $55.10$41.82 13.28

In the event that a Stores Revolving Fund has been established, a warrant must be drawn on theGeneral Fund payable to the Revolving Fund in the amount of the total withdrawals in lieu of thejourP.ii itry just given; but the accounts are otherwise the same.

..tend the value of stock issues, the most common practice is to compute an average priceeau time new stock is received and to use this average price for extending all requisitions prior tothe next receipt. The data necessary to compute an average price is accumulated by maintainingperpetual stock records for each item carried in the warehouse. Part V of this manual containsdetailed information about methods of maintaining perpetual stock records.

Certain expenses, other than the disbursement of cash for stock, are usually incurred in theoperation of a warehouse. Examples of such expenses are the salaries of warehousemen ordeliverymen, utilities, rented space, and vehicles. If stores are accounted for in the General Fund,these other expenses may be distributed directly to the appropriate expenditure accounts orchar, d to overhead expense. If a Revolving Stores Fund has been established, these other expenseswould be charged to overhead expense within the Stores account in the revolving fund rather thanin the General Fund. Eventually it will be necessary to prorate these expenses to the appropriateexpense accounts. Expenses may be prorated either at the time issues are made or by the end of theyear; the basis used is the distribution charge for stock withdrawals.

One method of distributing overhead incurred in operating a stores warehouse is to add to theaverage cost of each item requisitioned a fixed percent (overhead) that is sufficient to cover alloperation expense& This method of distributing overhead allows the total warehouse operatingcosts to be distributed to applicable expenditure accounts by the end of the year. Any surplus ordeficit in the net total of the two remaining overhead accounts is then prorated and distributedamong the liable expenditure accounts.

If overhead is not distributed along with the stock issues, then some means for eventualdistribution of overhead must be maintained. This may be done by keeping a running analysis ofwithdrawals by classification of the expenditure accounts to which the charges are being made. Thetotals are converted to percents of the total withdrawals at year's end, and the total overhead

VI- 38 6/84

165

expense incurred in operating the stores warehouse is distributed to expenditure accounts on thebasis of these percents. When a constant percent is added to issues in accounting for the aboveentries, the debit of the total amount, including the percent for overhead, is charged to theappropriate expenditure account. The credit, however, must be split between actual value of theitems of stock withdrawals (computed at the latest average price) and the amount that was obtainedby extending that value by the constant percent to cover overhead reimbursed to the Storesaccount. For this purpose an overhead reimbursed account should be maintained within the Storesaccount. At the end of the year, the total charges to overhead expense will be available separatelyfrom the credits to overhead reimbursed. For the following year, percents may be adjusted toreduce differences between the overhead amounts expended and reimbursed. Any differencesbetween these two accounts at the end of the year must be charged or credited as the case may beto appropriate expense accounts according to the value of items issued.

As mentioned in Part V of this manual, an actual physical inventory should be taken at least onceannually, and a comparison should be made between the control count on the perpetual inventoryand the actual count. At this time any difference should be adjusted by charging or creditingoverhead expense, by the value of any difference in the quantity on hand, with the offset to stockwithdrawals. If at any time the warehouse is unable to complete a request because of insufficientstock, an indication of how much was actually issued should be noted on the requisition. This willmake possible a simple check of agreement with the perpetual inventory on that item, since theaccount will now be zero, or very small. Inventory variations discovered at such times should beaccounted for when convenient, but no later than the end of the year.

Specifically, if the Stores account is maintained in the General Fund, the net value of theinventory will be reported in Part I of the Annual Financial and Budget Report, both as an endingbalance for the current year and as a beginning balance for the new year. If a warehouse RevolvingStores Fund account has been established, the net value of the inventory will be entered on Part IXof the Annual Financial and Budget Report, which is for special funds. List the accounts as "stores"for both beginning and ending balances. Expenditures for operating purposes will be zero in allcases, since these expenditures are accounted for in the General Fund. Should additional capital beadded to the fund resulting from an increase in average daily attendance, the increased capital isaccounted for as a transfer expense on the General Fund and a transfer income on the RevolvingStores Fund. Conversely, should some portion of the capital funds be returned to the General Fund,the amount returned is a transfer expense on the Revolving Stores Fund and a transfer income onthe General Fund.

In the event that the Revolving Stores Fund is established as a common fund of two or moredistricts, duplicate Annual Financial and Budget Report forms (Part IX) are prepared for inclusionwith the budgets of each co-owner of the fund. An indication is made thawing the percent of equityof each co-owning district according to the value of its initial cash and inventory contributions tothe established fund.

When the Revolving Stores Fund is established initially, the transfer expense account in theGeneral Fund is in the amount of cash plus inventory contributed to the fund. In this year theGeneral Fund will show the value of Stores as a beginning balance but will show no ending balance.The Revolving Stores Fund of the first year will show no beginning balance but will show a transferincome in the total value of cash plus inventory received and an ending balance of Cash and Stores.

General Ledger Accounting for Building Funds

Building funds are used to account for the receipt and disbursement proceeds of the sale of bondsauthorized by election and issued by a school district under Education Code Section 15100. Themajor expenditures in a school district building fund are related to the purchase and improvementof sites, construction and modification of buildings, and the purchase of equipment.

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166

The accounting entries described earlier in this section for appropriations, expenditures, andencumbrances are found in the building fund. However, there are some accounting features in thisfund that are not found in other funds.

To illustrate the accounting for a building fund, a 'series of typical transactions and entries insummary form is given, as follows:

1. An issue of bonds totaling $5,000,000 is authorized by the voters for the purchase of sites andthe construction of buildings.

Serial Bonds AuthorizedUnissued $5,000,000Reserve for Unissued Bonds $5,000,000

2. The full issue is sold to the Bank of America.Cash in County Treasury $5,000,000

IncomeSale of Bonds $5,000,000

Reserve for Unissued Bonds $5,000,000Serial Bonds AuthorizedUnissued $5,000,000

Estimated Income $5,000,000Appropriations $5,000,000

NOTE: Because contracts cannot be let until funds are available, appropriation authority is withheld untilbonds ate sold.

3. Construction contracts and agreements to purchase sites are made in the amount of$4,900,000.

Encumbrances $4,900,003Reserve for Encumbrances $4,900,000

4. Other costs, not encumbered, are paid in the amount of $20,000.

ExpendituresCash

$20,000$20,000

5. Construction contracts and agreements to purchase sites, previously encumbered, arc paid inthe amount of $4,910,000.

Reserve for EncumbrancesEncumbrances

Expenditures

$4,900,000

$4,910,000$4,900,000

Cash $4,910,000

6. An entry is made to close Expenditures into Appropriations.

Appropriations $4,930,000Expenditures $4,930,000

7. An entry is made to close Income into Estimated Income.

IncomeSale of Bonds $5,000,000Estimated Income $5,000,000

8. An entry is made to close Appropriations into Unexpended Fund Balance.

Appropriations $70,000Unexpended Fund Balance $70,000

VI -40 167 6/84

Part VII

Accounting Terminology

Abatement. The return of part or all of an item ofincome or expenditure to its source during thecurrent fiscal year.

Accounting period. A period of time for whichrecords are maintained and at the end of whichfinancial statements are prepared covering theperiod.

Account numbers or letters. Numbers and/or let-ters assigned to the ordinary titles of accountsfor classification of accounts and ease ofreference.

Accounts payable. Amounts due and owed toprivate persons, business firms, governmentalunits, or others for goods received and servicesrendered prior to the end of the fiscal year.Includes amounts billed but not paid.

Accounts receivable. Amounts due and owed fromprivate persons, business firms, governmentalunits, or others for goods received and servicesrendered prior to the end of the fiscal year.Includes amounts billed but not received.

Accrual basis. That method of accounting in whichincome is recorded when earned, even thoughnot collected, and expenditures are recordedwhen the liabilities are incurred but not yetpaid.

Ad valorem tax. A tax based on a percent of thevalue of goods or services.

Allocation. Division or distribution according to apredetermined plan.

Allowance. A provision for valuing an asset at net,such as an allowance for bad debts. This valua-tion account will net accounts receivable toreflect collectable receivables.

Allowances. Sums granted as reimbursement forexpenses or services rendered.

Apportionment. Allocation of state or federal aid,district taxes, or other monies among school dis-tricts or other governmental units.

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Apportionment notice. A document notifyingschool districts when monies have been depos-ited with the county treasurer.

Appraisal. An estimate of property value made bythe use of systematic procedurea_based uponphysical inspectionaud-4nsrefilory, engineeringstudieu_anik-cair economic factors.

Appropriation. An allocation- of budgetary fundsmade by the governing board for specific pur-poses and limited as to the time when it may beexpended.

Appropriation for contingencies (formerly termedundistributed re,,,erve). That portion of the cur-

rent fiscal year's budget that is not appropriatedfor any spei.ific purpose but is held subject tointrabudget transfer; i.e., transfer to other spe-cific appropriations as needed during the fiscalyear.

Appropriation ledger A record containing anaccount with each item allocated or budgeted.Such accounts usually show the amount origi-nally appropriated, transfers to or from theappropriation, amounts charged against theappropriation, the encumbrances, the unencum-bered balance, and other related information.

Assessed valuation. Value placed upon personaland real property by a governmental unit fortaxation purposes.

Assets. Anything owned that has value -- tangible orintangible. (See also current assets and fixedassets.)

Audit. An examination of documents, records, andaccounts for the purpose of (1) determining thepropriety of transactions; (2) ascertainingwhether all transactions are recorded properly;and (3) determining whether statements drawnfrom accounts reflect an accurate picture offinancial operations and financial status.

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Available cash. Cash on hand or on deposit in agiven fund that is unencumbered and can be uti-

40111111110 Lzed for meeting current obligations.Available surplus. That portion of the excess of

assets over liabilities not obligated for currentappropriations or for restricted purposes. (Seealso unappropriated fund balance.)

Average daily attendance (a.d.a.). Total approveddays of attendance in the school district dividedby the number of days the schools in the districtare in session for at lez.st the required minimumday. (Refer to Education Code Section 46300and California Administrative Code, Title 5,Education, sections 400-424.)

Balance sheet. A statement that shows assets, liabil-ities, reserves, and fund balance or fund deficitof an entity at a specific date and is properlyclassified to exhibit the financial condition ofthe entity as of that specific date.

Bond. A certificate containing a written promise topay a specified sum of money, called the facevalue, at a fixed time in the future, called thedate of maturity, and specifying interest at afixed ratty, usually payable periodically.

Bond discount The excess of the face value of abond over the price for which it is acquired orsold. (The price does not include accrued inter-est at the date of acquisition or sale.)

Bond interest and redemption fund, A fund estab-lished to pay bond interest and liquidate indebt-edness when due and payable,

Bond premium, The excess of the price at which abond is acquired or sold over its face value. (Theprice does not include accrued interest at thedate of acquisition or sale.)

Bonded debt. That portion of indebtedness repre-sented by outstanding bonds.

Bonded debt service. Expenses incurred for interestand redemption of bonds.

Bonds authorized and unissued. Legally authorizedbonds that have not been sold and that may besold without the necessity of holding anotherelection.

Budget. A plan of financial operation consisting ofan estimate of proposed income and expendi-tures for a given period and purpose.

Budget document, The instrument used by thebudget-making authority to present a compre-hensive financial program of the governmental

VII -2

unit. It includes a balanced statement of reve-nues and expenditures as well as other exhibitsto report (1) the financial condition of the sev-eral funds of the governmental unit at the end ofthe preceding completed fiscal period; (2) theestimated condition of the funds at the end ofthe fiscal period in progress; and (3) the esti-mated condition of the funds at the close of theensuing fiscal period based on the financial pro-posals contained in the budget document.

Budgetary accounts. Accounts that reflect budgetoperations; i.e., estimated income, appropria-tions, and encumbrances distinct from the pro-prietary accounts.

Budgetary control. The management of businessaffairs in accordance with an approved plan ofestimated income and expenditures.

Budgeting. The process of allocating the availableresources of an organization among potentialactivities to achieve the objectives of the organi-zation; planning for the use of resources.

Building fund. A fund established to control theincome and expenditures related to the purchaseand maintenance of school buildings, sites, andequipment.

Cafeteria account. Receipts and disbursements ofthe cafeteria function that are processed througha bank.

Cafeteria fund. Receipts and disbursements of thecafeteria function that are processed through thecounty treasurer.

Capital assets. See fixed assets.capital outlay. Amounts paid for the acquisition of

fixed assets or additions to fixed assets, includ-ing land or existing buildings, improvements ofgrounds, construction of buildings, additions tobuildings, remodeling of buildings, or initial andadditional equipment.

Cash. Currency, checks, postal and express moneyorders, and banker's drafts on hand or on depositwith an official or agent designated as custodianof cash; and bank deposits. Any restriction orlimitations as to the availability of cash shouldbe indicated.

Cash advance. Cash apportioned in advance of theusual apportionment period.

Cash basis. Method of accounting in which incomeand expenditures are recorded only when cash isactually received or disbursed.

16J 6/84

Cash collections awaiting deposit. Receipts onhand or monies in a bank clearing account await-ing deposit in the county treasury.

Gish discount. An allowance made on a purchase ifpaid within a stated period. (The term is not tobe confused with trade discount.)

Gish in bank. Balances in separate bank accountssuch as student body accounts, adult educationincidentals, school farm accounts, and cafeteriaaccounts.

Cash in county treasury. Cash balances on depositin the county treasury for the various funds ofthe school districts.

Chart of accounts. A list of accounts, systemati-cally arranged, applicable to a specific concern.All account names and numbers, if any, arelisted in order.

Chec A bill of exchange drawn on a bank payabledemand; a written order on a bink to pay on

demand a specific sum of money to a namedperson, to his order, or to bearer out of moneyon deposit to the credit of the maker. A checkdiffers from a warrant in that a warrant is notnecessarily payable on demand and may not benegotiable; it differs from a voucher in that avoucher is not an order to pay. A voucher-checkcombines the distinguishing marks of a voucherand a check: it show the propriety of a pay-ment and is an order to pay.

Child clerelopment fiind, A fund established tocontrol the financial operations of children'scenters.

Chissi.ticathm. The naming or identification of anitem or a category, such as the designation of theparticular account into which a receipt or expen-diture is to be recorded, or the separation of datainto acceptable groupings so that financial factscan be stated more accurately.

Clearing accounts. Accounts used to accumulatetotal receipts or expenditures for later distribu-tion among the accounts to which such receiptsor expenditures are properly allocable or forrecording the net differences under the properaccount. (See also revolving cash Pind, prepaideVpenSeS. and petty cash )

Code. ( I ) A distinguishing reference number orsymbol. A statement of the laws of a specificfield: e.g., Education Code, Penal Code, CivilCode, and Labor Code.

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(Viler Factor. A ratio developed for each countyby the State Board of Equalization for the pur-pose of adjusting to the statewide average theassessed value of the local property rolls in rela-tion to the market value thereof.

Contingent liabilities. Items that may becomeliabilities as a result of conditions undeterminedat a given date; e.g., guarantees, pending law-suits, judgments and appeals, and unsettled dis-puted claims.

Contracted services. Expense of services renderedunder contract by personnel who are not on thepayroll of the school system, including all relatedexpenses covered by the contract.

Controlling account. A summary account, usuallymaintained in the general ledger, in which isentered the aggregate of the debit and the creditpostings to a number of identical, similar, orrelated accounts called subsidiary accounts. Itsbalance equals the sum of the balances of thedetail accounts.

Cost. The amount of money or its equivalent valuepaid or agreed to be paid for property or ser-vices. Costs may be incurred even before moneyis paid: that is, as soon as a liability is assumed.Ultimately, however, money or its equivalentmust be given in exchange. The cost of someproperty or service may in turn become a part ofthe cost of another property or service. Forexample, the cost of materials will be reflectedin the cost of articles made from such materials.

County School Service Fund (C.S.S.F,). A fundestablished to control the financial operations ofthe offices of county superintendents of schools.

Credit. The right side of a double-entry posting,The credit will reduce assets and expendituresand increase liabilities, income, and fund balance.

Current assets. Assets that are available or can bemade readily available to meet the cost of oper-ations or to pay current liabilities.

Current expense of education. The current generalfund operating expenditures of a school districtfor kindergarten and grades one through twelveexcluding expenditures for food services, com-munity services, facility aquisition and construc-tion, and object classifications 6000 and 7000(except 7250, Current Expense for RegionalOccupational Centers or Regional OccupationalPrograms).

170 VII-3

Current liabilities. Amounts due and payable forgoods and services received prior to the end ofthe fiscal year. Current liabilities should be paidwithin a relatively short period of time, usuallywithin a year.

Current loans. A loan payable in the same fiscalyear in which the money was borrowed.

Debit. The left side of a double-entry posting. Thedebit will increase assets and expenditures andreduce liabilities, income, and 'fund balance.

Debt limit. The maximum amount of bonded debtfor which a school district may legally obligateitself.

Debt service. Expenditures for the retirement ofdebt and for interest on debt, except principaland interest on current loans.

Deferred charges. Expenditures not chargeable tothe period in which they are made but set up asassets to be eliminated by charges as expendi-tures in subsequent periods.

Deferred income. Income unearned in a givenperiod but set up as a liability to be included asincome earned in subsequent periods.

Deficit. Excess of liabilities over assets.Delinquent taxes. Taxes remaining unpaid after the

close of the year in which levied. (See also prioryears' taxes. in most cases the preferred term.)

Depreciation. Estimated loss in value or service lifeof fixed assets because of wear and tear throughuse, elapse of time, inadequacy, or obsolescence.

Designated income. Income received for a specificpurpose.

Development Center for Handicapped MinorsFund. A fund established to control the finan-cial operations of development centers forhandicapped minors.

Direct expenses or costs. Expenses that can beseparately identified and charged as a part of thecost of a product, service, or department.

Direct support charges. Charges for a support pro-gram and services that directly benefit otherprograms.

Disbursements. Payments by currency, check, orwarrant. (The term is not synonymous withexpenditures.)

Double entry. A system of bookkeeping thatrequires an amount credited for every corre-sponding amount debited. Thus, the double-entry ledger maintains equality of debits andcredits.

VII- 4 171

Earned interest income. A sum of money receivedor due to be received for the use of moneyloaned or invested.

Employee benefits. Amounts paid by the schoolsystem on behalf of employees; these amountsare not included in the gross salary, but are overand above. They are fringe benefit payments;and while not paid directly to employees, theyare nevertheless a part of the cost of salaries andbenefits. Examples are (1) group health or lifeinsurance payments; (2) contributions to em-ployee retirement; (3) 0A.S.D.I. (Social Secu-rity) taxes; (4) worker's compensation pay-ments, and (5) payments made to personnel onsabbatical leave.

Encumbrances. Obligations in the form of purchaseorders, contracts, salaries, and other commit-ments chargeable to an appropriation for whicha part of the appropriation is reserved.

Endowment fund. A fund from which the incomemay be withdrawn but the principal sum ofwhich must remain intact or be accounted for inaccordance with the terms of the trust docu-ment.

Entitlement. An estimate of an apportionmentbased on specific qualifications.

Estimated income. Expected receipts or accruals ofmonies from revenue or nonrevenue sources dur-ing a given period.

Expenditures. Amounts paid or liabilities incurredfor all purposes. Accounts kept on an accrualbasis include all charges whether paid or not.Accounts kept on a cash basis will include onlyactual cash disbursements. (See Part III of thisma oral .)

Face value. As applied to securities, the amountstated in the security document.

Fees. Amounts collected from or paid to individ-uals or groups for services or for use of school orother facilities.

Fidelity bond A form of insurance that providesfor the indemnification of the school district orother employer for losses arising from the theftor dishonesty of employees.

Fiscal year. A period of one year, the beginningand ending dates of which are fixed by statute;in California, the period beginning July 1 andending June 30.

Fixed assets. Assets of a permanent character havingcontinuing value; e.g., land, buildings, machinery,

6/54

furniture, and equipment. The term capital assetsis sometimes used in the same sense, but fixedassets is preferred.

Full-time equivalent. The ratio of time expended ina part-time position to that of a full-time posi-tion. The ratio is derived by dividing the amountof employe,' time required in the part-time posi-tion by the amount of employed time requiredin a corresponding full-time position.

Function. An act, service, or group of servicesproper to a person, thing, or institution andaimed at accomplishing a certain end.

limet,:onal accounting. A system of accounting inwhich records are maintained to accumulateincome and expenditure data by purpose andusually are further classified within generalizedfunctional areas such as instruction, administra-tion, or operations.

Fund. A sum of money or other resources set asidefor the purpose of carrying on specific activitiesor attaining certain objectives in accordancewith special regulations, restrictions, or limita-tions. A fund is a distinct financial or fiscalentity.

Fund balance. The difference between assets andliabilities.

Funded debt. See bonded debt, the preferred term.General fund. The fund used to finance the ordi-

nary operations of the school district. It is avail-able for any legally authorized purpose.

General ledger. A book, file, or other device inwhich accounts are kept to the degree of detailnecessary to summarize the financial transac-tions of the school system. General ledgeraccounts may be kept for any group of items ofreceipts or expenditures on which an administra-tive officer wishes to maintain a close check .

General purpose tax rate. Tax rate authorized bylegislative statute or by an election held in theschool district for the purpose of acquiring taxincome for the general operation of the schooldistrict.

General reserve. An account to record the reservebudgeted to provide operating cash in the suc-ceeding fiscal year until taxes and state fundsbecome available.

Gift. Anything of value received from any sourcefor which no repayment or service to the con-tributor is expected.

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Grade level. Assigned classification of pupilsaccording to age and progress: e.g., kindergarten,first grade, and so forth.

Grant. A contribution, either in money or materialgoods, made by one entity to another. Grantsmay be for specific or general purposes.

Grants-in-aid. Outright donations or contributions,usually by a superior governmental unit, withoutthe prior establishment of conditions with whichthe recipient must comply.

Holding accounts. Suspense accounts used tempo-rarily to accumulate costs that will ultimately becharged to other using programs.

Income. Revenue and nonrevenue receipts. Reve-nue receipts are additions to assets for which noobligations are incurred. Nonrevenue receipts arereceipts of money in exchange for property ofthe school district or for which the districtincurs an obligation.

Indirect expense and overhead. Those elements ofindirect cost necessary in the operation of thedistrict or in the performance of a service thatare of such nature that the amount applicable toeach accounting unit cannot be separately iden-tified.

Indirect support charges. Routine services not per-formed as a special service for a particular pro-gram but allocated to using programs.

In lieu of taxes. Income to replace the loss of taxrevenue resulting from property exempted fromtaxation.

Interest. A fee charged a borrower for the use ofmoney.

Interfund accounts. Accounts in which transac-tions between funds are reflected.

Interfund transfers. Money that is taken from onefund under the control of the governing boardand added to another fund under the board'scontrol. Interfund transfers are not receipts orexpenditures of the school system.

Internal audit. An examination made by school dis-trict employees whose duty it is to make contin-uous or periodic checks on the reliability of theschool district's accounting and reporting proce-dures.

Internal control. A plan of organization underwhich employees' duties are so arranged andrecords and procedures so designated as to pro-vide a system of self-checking, thereby enhanc-

172 VU S

ing accounting control over assets, liabilities,income, and expenditures. Under such a systemthe employee's work is subdivided so that noone employee performs a complete cycle ofoperation; such procedures call for properauthorization by designated officials.

Intrabudget transfers. Amounts transferred fromone appropriation account to another within thesame fund.

Inventory. A detailed list showing quantities anddescription of property on hand at a given time.It may also include units of measure, unit prices,and values.

Investments. Disbursements of cash for the pur-pose of generating income.

Investment in fixed assets. The book value of fixedassets.

Invoice. An itemized statement of charges for mer-chandise sold or services rendered to the pur-chaser.

Job account. An account established to record theaccumulation of costs of a specific piece ofwork; work orders showing charges for materialand labor used.

Jo,, 'al. Any accounting record in which the finan-cial transactions of the school district are for-mally recorded for the first time; e.g., the cashreceipts book, check register, and journalvoucher.

Journal voucher. A form provided for the record-ing of certain transactions or information inplace of, or supplementary to, the journal orregisters.

Jut/views Amounts due to be paid or collectedby the school district as the result of court deci-sions.

Ledger. A group of accounts in which are recordedthe financial transactions of a governmental unitor other organization. (See also general ledgerand appropriation ledger. )

',era A division of the management levels describedby the program structure of the district.

Le.. The imposition of taxes or special assess-ments for the support of governmental activities;also, the total amount of taxes, special assess-ments, or service charges imposed by a govern-mental unit.

Liabilities. 'egal obligations (exclusive of encum-brances) that are unpaid.

VII .6

Lift? span (grade span). Broad group classificationof pupils or students according to age and prog-ress; i.e., preformal, elementary, secondary, andadult.

Long-term loan. A !oan that extends for more thanfive years from the date the loan was obtainedand is not secured by serial or term bonds.

Lump-sum appropriation. An appropriation madefor a stated purpose or for a named departmentwithout the amounts that may be spent for par-ticular object classifications being specified.

Modified assessed valuation. Local assessed valua-tion adjusted by application of a ratio known asthe Collier Factor and other factors when appli-cable; e.g., motion picture, RedevelopmentAgency, and so forth.

Modified cash basis (modified accrual basis). Anymethod of accounting that combines the con-cepts of cash basis accounting with those ofaccrual accounting

Multiyear financial plan. A plan that presentsfinancial estimates of programs in tabular formfor a period of years. These estimates shouldreflect the future financial impact of currentdecisions. The data in the MYFP should be orga-nized along the lines of the program structure.

Object. As used in an expenditure classification, aterm that applies to the article purchased or theservice obtained.

Obligations. Amounts that the school district maybe legally required to meet out of its resources.They include not only actual liabilities but alsounliquidated encumbrances. (See also liabilities.)

Order (for payment). A written demand of the gov-erning board of a school district requiring thecounty superintendent of schools to draw hisrequisition on the county auditor for the pay-ment of a claim against the school district.

Overdraft. The amount by which checks, drafts, orother demands for payment on the treasury oron a bank account exceed the amount of thebalance upon which they are drawn; or theamount by which encumbrances and expendi-tures exceed the appropriation to which they arechargeable.

Overhead. Elements of indirect cost necessary, inthe operation of the school district or in theperformance of a service that are of such nature

173 6/84

W'

that the amount applicable to each accountingunit cannot be determined readily and accurately.

Override tax rate. A tax rate levied at the discre-tion of the school board for a specific purpose.The tax income received from this source maybe used only for the designated purpose. Over-ride tax rates may be levied in addition to thegeneral purpose tax rate.

Par value. The price at which securities are issued.Payroll register. A document accompanying one or

more orders on a school district fund for thepayment of salaries or wages to employees thatcontains the names of such employees and pro-vides information substantiating such ordas.

Payroll warrant. A document used as an order or arequisition on funds of a school district for thepurpose of paying salaries or wages.

Personal property. All property except real estate.Petty cash. A sum of money set aside for the pur-

pose of making change or immediate paymentsof small amounts. (See also revolving cashfund.)

Prepaid expenses. Items for which payment hasbeen made but for which benefits have not beenrealized as of a certain date; e.g., prepaid rent,prepaid interest, and premiums on unexpiredinsurance. Benefits and correskinding charges toexpenses will be borne in future accountingperiods.

Prior rears' taxes. Taxes collected within the cur-rent fiscal year for levies in previous fiscal years.

Program (noun). A group of related activities con-sisting of a unique combination of objects thatoperate together to accomplish common ends.

Program accounting. A system of accounting inwhich records are maintained to accumulateincome and expenditure data by program. (SeePart I of this manual.)

Program costs. Costs incurred and allocated by pro-grams rather than by organizations. Programcosts should be those direct costs that are essen-tial to maintain the program. (See also directcosts )

Program definitions.. Sec Part I and Exhibit I-D inthis manual.

Program structure. The hierarchical arrangement ofprograms that represent the interrelationship ofactivities to goals and objectives. The programstructure contains categories of activities with

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common outputs and objectives. Programs maycut across existing departments and agencies.

Property tax rate. See tax rate.Proprietary account. An account reflecting the

assets and liabilities of the district.Prorating. The allocating of expenditures or

income from a single source to two or moreaccounts to show the correct distribution ofcharges or income.

Protested taxes. Tax money paid under protest andheld by the county auditor pending settlementof the protest.

Purchase order. A document which, issued to avendor, authorizes the delivery of specified mer-chandise or the performance of certain servicesand the making of a charge for them.

Real property. Property consisting of land, build-ings, minerals, timber, landscaping, and allimprovements thereto.

Rebates. Abatements or refunds.Receipts, nonrevenue. Amounts received that

either incur an obligation that must be met atsome future date or Change the form of an assetfrom property to cash and therefore decreasethe amount and value of school property.Money received from loans, sale of bonds, saleof property purchased from capital funds, andproceeds from insurance adjustments constitutemost of the nonrevenue receipts.

Receipts. revenue. Additions to assets that do notincur an obligation that must be met at somefuture date and do not represent exchanges ofproperty for money.

Reclassification. Redesignation of current year'sincome or expenditure items previously postedto one account and later determined to be moreproperly charged to a different account.

Refund. An amount paid back or credit allowed onaccount of an overcollection.

Registered warrant. A warrant that is registered bythe county treasurer for future payment onaccount of present lack of funds and that is tobe paid with interest in the order of its registra-tion.

Registers. A listing of transactions of like kind thatmay be totaled and summarized for conveniencein posting; e.g., payroll registers, warrant regis-ters, and attendance registers.

174 VU-7

Reimbursement. Cash or other assets received as arepayment of the cost of work or services per-formed; or repayment of other expendituresmade for or on behalf of another governmentalunit, fund, or department. (See also refund.).

Requisition. A document submitted initiating apurchase order to secure specified articles or ser-vices.

Reserve. An amount set aside to provide for esti-mated future expenditures or losses, for workingcapital, or for other specified purposes.

Reserve for encumbrances. A reserve representingthe segregation of a portion of a fund balance toprovide for unliquidated encumbrances. Sepa-rate accounts may be maintained for current andprior year encumbrances.

Resources. All assets owned including land, build-ings, cash, estimated income not realized, and, incertain funds, bonds authorized but unissued.

Restricted lands. Monies the use of which is re-stricted by legal requirements.

Revenue. Addition to assets not accompanied byan obligation to perform service or deliverproducts.

Revolving cash fund. A stated amount of moneyused primarily for emergency or small or sundrydisbursements and reimbursed periodicallythrough properly documented expenditures,which are summarized and charged to properaccounting classifications.

Sales and use tax. Tax imposed upon the sale andconsumption of goods and services. It can beimposed as a general tax on the retail price of allgoods and services sold within the school systemjurisdiction with few or limited exemptions or asa tax upon the sale or consumption of selectedgoods and services. Separate accounts may bemaintained for general sales taxes and for selec-tive sales taxes.

Schedules. Explanatory or supplementary state-ments that accompany the balance sheet orother financial statements.

Secured roll. Assessed value of real property, suchas land, buildings, secured personal property, oranything permanently attached to land as deter-mined by eaft county assessor.

Securities. Bonds, notes, mortgages, or other formsof negotiable or nonnegotiable instruments.

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Self-contained classroom. A classroom in which ateacher usually instructs one group of studentsin a majority of the instructional programs for aschool year. Self-contained classrooms are usu-ally found at the elementary school level.

Serial annuity bonds. Notes or other evidences ofobligation in which the annual payment of prin-cipal and interest combined are approximatelythe same each year.

Serial bonds. Notes or other evidences of obliga-tion redeemable by installment, each of which isto be paid out of income of the year in which itmatures.

Shared revenue. Revenue levied by one govern-mental unit but shared, usually in proportion tothe amount collected, with another unit of gov-ernment or class of governments.

Short-term loans. A loan payable in five years orless but not before the end of the current fiscalyear. (See also current loans.).

Site. The location of a school or a central adminis-trative unit.

Source document. Any voucher or other data thatsupports an entry in the accounting records.

Special audit. An examination of the accountingrecords having a specific purpose, or a generalexamination in addition to or in extension ofthe usual examination.

Specifications. Those particular qualities requiredof products or services.

Statements. Formal written presentations settingforth financial information. The term includesexhibits, schedules, and written reports.

State School Fund. Monies provided by statute tothe State Department of Education for distribu-tion to school districts on a predeterminedformula.

Stores. Goods on hand in storerooms subject torequisition.

Student body fund. A fund to control the receiptsand the disbursements of student associationactivities.

Subsidiary account. A related account that sup-ports in detail the debit and credit summariesrecorded in a controlling account.

Subsidiary ledger. A group of subsidiary accounts,the sum of the balances of which equal the bal-ance of the related controlling account.

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Subvention. Provision of assistance or financialsupport, usually from a superior governmentalunit.

Summary. Consolidation of like items for account-ing purposes.

Supply. A material item of an expendable naturethat is consumed, wears out, or deteriorates inuse or one that loses its identity through fabri-cation or incorporation into a different or morecomplex unit or substance.

Surety bond. A written promise to pay damages orto indemnify against losses caused by the partyor parties named in the document through non-performance or through defalcation; e.g., asurety bond given by a contractor or by an offi-cial who handles cash or securities.

Surplus. The excess of assets over liabilities.Suspense account. An account to which postings

are made temporarily pending determination ofthe proper account to be charged or credited.

Suspense clearing. An account that carries tempo-rarily pending charges or credits to the properaccount or accounts to which they are to beposted.

Tax anticipation notes. Instruments issued tosecure monies borrowed in expectation ofreceipt of tax-funds.

Tax liens, Claims by governmental units uponproperties for which taxes levied remain unpaid.

Tax rate. The amount of tax stated in terms of aunit of the tax base.

Tax rate limit. The maximum rates of tax that agovernmental unit may levy.

Tax redemption. Proceeds from the sale of tax-delinquent property.

Tax relief subventions. Funds ordinarily paid tocompensate for taxes lost because of tax reliefmeasures.

Tax roll. The list showing the amount of taxeslevied against each taxpayer or property.

Taxes. Compulsory charges levied within its bound-aries by a governmental unit against the incomeor property of persons, natural or corporate, tosupport its activities.

Taxes receivable. An asset account representing theuncollected portion of taxes levied.

Term bonds. Bonds of the same issue maturing at aspecified time or for a specified period.

Test check. The verification of selected items onthe assumption that those selected are represen-tative of the entire group from which they areselected. If no errors are found, the uncheckeditems in the group are assumed to be correct.

Trade discount. A reduction of the list price, usu-ally expressed as a percent and related to volumeof business transacted. (The term is not to beconfused with cash discount.)

Trailer coach fees. Assessments collected fromowners of trailer homes, which constitute per-sonal property used in lieu of taxable realproperty.

Transfer. Interdistrict or interfund payments orreceipts not chargeable to expenditures or cred-ited to income. Certain budget revisions areoften referred to as transfers.

Trial balance. A list of the balances of the accountsin a ledger kept by double entry, with the debitand credit balances shown in separate columns.If the totals of the debit and credit columns areequal or if their net balance agrees with a con-trolling account, the ledgers from which thefigures are taken are said to be "in balance."

Must fund. A fund consisting of resources receivedand held by the school district as trustee to beexpended or invested in accordance with theconditions of the trust.

Tuition. An amount charged for educational ser-vices provided to a student.

Unappropriated fund balance. The portion of afund balance not segregated for specific pur-poses. All assets and estimated income availablefor appropriation are credited to the accountand General Reserve; budgeted appropriationsand other obligations are debited. The net valueof the account represents the unappropriatedfund balance.

Unencumbered balance. That portion of an appro-priation or allotment not yet expended or obli-gated.

Unit cost. The total expenditure for a product,program, or service divided by the total quantityobtained or some other quantitative measure;e.g., total expenditure divided by number of stu-dents equals cost per student.

Unrealized income. Estimated income less incomereceived to date; also, the estimated income forthe remainder of the fiscal year.

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Unsecured roll Assessed value of personal propertyother than accused property.

Voucher. Any document that supports or verifies acertain transaction.

Voucher warrant. A form embodying a warrantand voucher in one document.

Warrant. A written order drawn by the governingboard or its authorized officer(s) or em-ployee(s), approved by the county superin-tendent of schools, and allowed by the countyauditor, directing the county treasurer to pay aspecified amount to a designated payee.

Warrants payable. The face amount of warrantsoutstanding and unpaid.

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Withholding. The process of deducting from a sal-ary or wage payment an amount, specified bylaw or regulation, representing the estimatedfederal or state income tax of the individual thatthe employer must pay to the taxing' authority.

Work in process. An asset representing the value ofpartially completed work.

Work order A written authorization for the per-formance of a particular job containing a de-scription of the nature and location of the joband specifications for the work to be performed.Such authorizations are usually assigned jobnumbers, and provision is made for accumulat-ing and reporting labor, material, and othercosts.

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Part VIII

Data Processing Terminology

Alpha. The term used to indicate letters of thealphabet as opposed to numbers.

Alphanumeric. A term used to indicate a combina-tion of letters, numbers, and special symbolssuch as punctuatiowor mathematical notation.

Automated data processing (ADP). The continuousintegrated operation of data processing in whichautomatic machines are used; different frommanual data processing.

Butch. A controlled group of data gathered to-gether for processing or balancing.

Batch processing. A technique by which items tobe processed must be coded and collected intogroups before processing.

Binary number system. An internal numberingsystem incorporated by computers which uses abase of two, expressed as 0 or I (as opposed tothe decimal system, which uses a base of ten).

Block diagram. A graphic presentation of a system,computer, or program in which selected portionsare represented by boxes and interconnectinglines. (See also flow chart.)

Bug. A mistake, malfunction, or omission in thedesign of a program or computer.

By-product information. Data, which, as a result ofbeing tabulated in a particular fashion or as aresult of being processed' for other than the areaof specific design, becomes available for existingrecords created for an entirely different purpose.

Card punch. A machine that encodes data into tab-ulating cards in the form of a pattern of roundor rectangular holes; card punches may be acti-vated by a computer or from a keyboard. (Seealso key punch.)

Cathode ray tube (CRT). A device similar to a tele-vision screen upon which data can be stored ordisplayed.

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Central processing unit (CPU). That portion of acomputer containing the arithmetic, logic, con-trol, and in some cases, main stomp units!

Character reader. A machine that op_tielly scarsalphabetic, numeric, or special- characters

viously entered on a document (usually byspeed printer, typewriter, or imprinter).

Code. A system ofrules or signals for using a set of,characters to represent data or instructions.

Collating. Compating and mergisig two or mornsimilarly sequenced groups of \items into onesequenced group.

Common Business-Oriented La age (COBOL). Acomputer programming e using basicEnglish phrases designed for ess applications.

Common language. A singledevices (for example, type

e used by several'tern, calculators,

and transmitters) manufactitred by differentcompanies.

Compilation. Preparation of a machine languageprogram by translation of each symbolic codedinstruction into two or more machine languageinstructions.

Data. Basic elements of information facts, num-bers, letters, or symbolswith or without a com-puter.

Data collection. The act of brinting data from oneor more points to a central point.

Data communication. The transmission of datafrom one point to another.

Data processing. A series of planned actions andoperations upon data to achieve a desired result.

Data processor. A group of people and/or machinesorganized and acting together to process data.

Debugging. Finding and removing the mistakesfrom the design of a program or computer.

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Efreirorric data priKe.s.smg (LOP/ A term referringto equipment that processes data by electronicmeans; i.e., analog and digital computers.

Flow chart A graphic representation of the majorsteps of work in process. (See also block diagram. )

Fortran (FOR mula TRA7Vslation). A programmingsystem that converts mathematical statementsinto computer language.

Hard coo. Any printed copy of machine output;e.g,, reports, listings, documents, or other copyin the form printed out by a computer.

Hardware. The physical equipment or deviceswhich together comprise a computer and associ-ated data processing machines; the mechanicalor machine portion of a computer system.

InfOrmation. Facts and intelligence that resultfr data processing operations.

retrieval. The methods and proceduresering speciftc information from stored

c' Input. Transfer of external information into th:central processing unit or into an intermediatedata-processing storage device.

Inquiry station. A remote terminal device, such asa typewriter keyboard, from which interrogationof the contents of a computer's storage can bemade.

KeY punch A card punch activated by a keyboard.(See also card punch.)

Language. A system for representing and communi-cating information between people and/ormachines.

Lines per minute (LPM). The rate of printing speedof output printers.

Magnetic disc. A flat, circular plate with a surfacethat can be magnetized to store data.

Magnetic tape. A plastic or mylar strip coated witha metallic oxide upon which data can be re-corded in magnetized spots.

Mark reader. A machine that optically scans marksentered (usually manually) in specific posi-tions on a form and assigns values based on such

Mark sense Pencil strokes' generally entered onbubbles on a punch card that can be read elec-trically by a machine.

Optical character recognition (OCR). A generalterm referring to the technique of using ma-

VIII 2U3 112 /2no {renting! 03 0956 300 10 S4 4M

179

chines for optical reading of characters. symbols,or marks from a printed input document.

Optical s( antler A device that optically readsprinted or written data, which is stored orentered into a computer.

Output. Informition transferred from internal stor-age to output devices to produce cards, tapes,business forms, reports, and so forth.

Paper tape. A ribbon-like strip of paper, one inchor less in width, used as a means of recordingdata in the form of coded perforations.

Peripheral equipment. The auxiliary machines thatmay be placed under the control of the centralcomputer; e.g., card readers, punches, and high-speed printers.

Printout. Display of computer-processed informa-tion as hard copy.

Program. A series of instructions that tell the com-puter in minute detail how to process data.

Pr9grammer. A person who prepares problem-solving procedures and flow charts and who mayalso write and debut programs.

Random access A storage technique in which thecomputer can find one bit of data as quickly asany ocher, regardless of its specific location instorage, without requiring a sequential storage.

Real-time processing. A method of processing datain which the machine begins to function at themoment of initial input so that there is virtuallyno passage of time between inquiry and result.

Software. Written programs and routines used toextend the capabilities of computers.

Source document. Any form from which data aretaken for processing.

Storage. The retention of data for future retrievalTest routine. A program designed to show whether

or not a computer is functioning properly.Throughput. Productivity based on all facets of an

operation; e.g., a computer that can read, write,and compute simultaneously would have a highthroughput rating processing through the system.

Time-sharing Using a computer to process multiplerequests by independent users and providingresponses rapidly so that each user feels that thecomputer is entirely at his disposal.

Unit record equipment. Computerized auxiliaryequipment such as card readers, collators, andinterpreters.

Updating. Revising so as to include current data.of It ' 014141% 4411) WI

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