Frequently Asked Questions - SACS
Frequently asked questions regarding standardized account code structure (SACS) financial reporting.
Education Protection Account
- Have unique account codes been established for the Proposition 30 Education Protection Account (EPA) entitlement?
- When will the EPA code combinations be available in the SACS tables of valid code combinations?
- How should the adjustment of the EPA entitlement from P-2 to Annual be recorded?
- How should LEAs record EPA expenditures? Since the EPA entitlement merely replaces state aid funds that have always been reported in Resource 0000, is it appropriate to accumulate the costs in Resource 0000 and then make a direct cost transfer from Resource 0000 to Resource 1400?
- Must expenditures of EPA funds be charged directly to the EPA resource at the time of expenditure, or may periodic or annual adjusting entries be made between another resource and Resource 1400?
- Can EPA funds be transferred to other resources?
- Can contributions from other resources (funding sources) be made to Resource 1400?
- Can EPA funds be carried over into the following year?
- Must the EPA entitlement be allocated proportionately to the programs whose ADA generates the LEA’s revenue limit funding?
- Proposition 30 specifies that LEAs may not use EPA funds for salaries or benefits of administrators or any other administrative costs. What is the definition of administrative costs?
- Specifically, for what types of activities may EPA funds be used?
- May EPA funds be used for indirect costs?
- Will the CDE provide a template that LEAs can use for reporting EPA revenues and expenditures?
- Proposition 30 requires that the use of EPA funds be determined by the governing board at an open public meeting. Does this meeting need to be a separate meeting only for the discussion of EPA funding?
- When should the open public meeting for discussing the use of 2012–13 EPA Funding be held?
- What are some example journal entries?
- Have unique account codes been established for the Proposition 30 Education Protection Account (EPA) entitlement?Yes, standardized account code structure (SACS) Resource 1400, Education Protection Account, and revenue Object 8012, Education Protection Account Entitlement, have been established. These codes are required to be used by all local educational agencies, including charter schools, receiving EPA funds.Charter schools reporting financial data via the Alternative Form, which does not contain resource codes, should use Object 8012 to record the EPA entitlement.
- When will the EPA code combinations be available in the SACS tables of valid code combinations?The EPA code combinations will be available the beginning of April 2013, which is after the second interim reporting due date. This is because in the SACS software for fiscal year 2012–13, there is no line in the interim reporting fund forms into which the amount reported in Object 8012 could extract.As a workaround, LEAs that wish to report EPA revenue for second interim can include EPA revenue temporarily in Object 8011, Revenue Limit State Aid – Current Year, and then reclassify the EPA revenue to Resource 1400, Object 8012 during year-end closing.
- How should the adjustment of the EPA entitlement from P-2 to Annual be recorded?Any amount received in the current year that was not accrued in the prior year should be recorded to Resource 1400 using Object 8019, Revenue Limit State Aid – Prior Years.Charter schools reporting financial data via the Alternative Form should use Object 8019.
- How should LEAs record EPA expenditures? Since the EPA entitlement merely replaces state aid funds that have always been reported in Resource 0000, is it appropriate to accumulate the costs in Resource 0000 and then make a direct cost transfer from Resource 0000 to Resource 1400?
EPA expenditures should be reported in Resource 1400 using the actual expenditure account lines where feasible, and not lump-sum transferred using Object 5710, Transfers of Direct Costs. The intention of the EPA reporting requirement is transparency. Reporting actual expenditure items achieves this better than a lump-sum transfer. The use of a unique resource code facilitates this transparency in the LEA’s accounting records. - Must expenditures of EPA funds be charged directly to the EPA resource at the time of expenditure, or may periodic or annual adjusting entries be made between another resource and Resource 1400?
It is appropriate to record periodic adjusting entries between another resource and Resource 1400. However, as mentioned previously, the entries should be made using the actual expenditure account lines and not as a lump-sum direct cost transfer.
- Can EPA funds be transferred to other resources?
Allowable expenditures should be recorded directly to EPA Resource 1400 to the extent possible. The CDE expects that school districts and charter schools incur sufficient unrestricted educational expenditures that should allow for easily identifying amounts to be reported in Resource 1400.
However, due to the unique characteristics of county offices of education (COEs) in that their principal instructional programs are typically reported as restricted and they may operate many other programs on a fee for service model, it may be necessary for COEs to transfer EPA funds to other resources in order to keep program accounting intact.
One example is a COE whose only instructional program is a community school that is reported using Resource 2400, Juvenile Court/County Community Schools. In order to avoid splitting community school expenditures between two resource codes, especially when the program revenue has historically been a revenue limit transfer from Resource 0000 and where now reporting the related EPA revenues and expenditures separately would be inconsistent with past practice, this COE might transfer EPA funds to this revenue limit funded program using Object 8091, Revenue Limit Transfers – Current Year.
Another example is an excess tax COE that historically has operated a program on behalf of school districts on a fee for service basis. This COE may decide to use its new minimum $200 per ADA EPA entitlement towards the cost of running the program, thus enabling them to charge less to participating school districts. Although the program is partially funded with unrestricted revenues, the COE may want to keep expenditures together in order to determine the charges for services. - Can contributions from other resources (funding sources) be made to Resource 1400?
No. Because LEAs have a legal requirement to report the receipt and use of EPA funds, contributions to Resource 1400 from other resources would distort EPA expenditures and not result in the intended reporting transparency. Also note that the EPA is not a “program,” in the sense that it is not “a group of related activities that operate together to accomplish specific purposes or objectives.” The normal reason for recording a contribution to a program is to keep program expenditures together, which does not apply in this context. Therefore, contributions from other funding sources should not be made to Resource 1400. - Can EPA funds be carried over into the following year?
Proposition 30 does not restrict the amount of EPA funds that may be carried over. As a practical matter, though, most EPA funds probably will be expended each year. - Must the EPA entitlement be allocated proportionately to the programs whose ADA generates the LEA’s revenue limit funding?No. LEAs may allocate the EPA entitlement entirely to one program for expenditure. For example, a school district may allocate it entirely to the regular education program, and county offices of education may allocate it entirely to the Juvenile Court School program.
- Proposition 30 specifies that LEAs may not use EPA funds for salaries or benefits of administrators or any other administrative costs. What is the definition of administrative costs?
The CDE has interpreted that administrative costs, as used in Proposition 30, means anything defined as administration in the California School Accounting Manual. Administrative costs include general administration, school administration, and instructional administration:- General administration refers to agency-wide administrative activities including governing board, superintendent, and district-level fiscal, personnel, and central support services.
- School administration refers to activities concerned with directing and managing the operation of a particular school.
- Instructional administration refers to activities for assisting instructional staff in planning, developing, and evaluating the process of providing learning experiences for students.
The CDE has determined that expenditures by county offices of education for certain administrative activities they are required to perform on behalf of the school districts within the county are not administrative costs for purposes of Proposition 30. These expenditures are separately identifiable within the county office's financial reports.The CDE believes that defining administration at the functional level, rather than by specific items of expenditure, will make it easier for LEAs to identify costs that may be charged to EPA. Furthermore, the CDE is confident that LEAs incur a sufficient level of non-administrative costs, e.g., instruction and pupil services, to easily meet the intent of Proposition 30 to not use EPA funding for administrative costs.
- Specifically, for what types of activities may EPA funds be used?
Except as provided below for COEs, the following tables of SACS functions show the activities for which EPA funds may and may not be used:
1000–1999 INSTRUCTIONSACS FunctionChargeable to EPA?1000 Instruction Yes1110 Special Education: Separate Classes Yes1120 Special Education: Resource Specialist Instruction Yes1130 Special Education: Supplemental Aids and Services in Regular Classrooms Yes1180 Special Education: Nonpublic Agencies/Schools Yes1190 Special Education: Other Specialized Instructional Services Yes
2000–2999 INSTRUCTION-RELATED SERVICESSACS FunctionChargeable to EPA?2100 Instructional Supervision and AdministrationNo2110 Instructional Supervision (optional)No2120 Instructional Research (optional)No2130 Curriculum Development (optional)No2140 In-house Instructional Staff Development (optional)No2150 Instructional Administration of Special Projects (optional)No2200 Administrative Unit (AU) of a Multidistrict SELPANo2420 Instructional Library, Media, and TechnologyYes2490 Other Instructional ResourcesYes2495 Parent Participation (optional)Yes2700 School AdministrationNo
3000–3999 PUPIL SERVICESSACS FunctionChargeable to EPA?3110 Guidance and Counseling ServicesYes3120 Psychological ServicesYes3130 Attendance and Social Work ServicesYes3140 Health ServicesYes3150 Speech Pathology and Audiology ServicesYes3160 Pupil Testing ServicesYes3600 Pupil TransportationYes3700 Food ServicesYes3900 Other Pupil ServicesYes
4000–4999 ANCILLARY SERVICESSACS FunctionChargeable to EPA?4000 Ancillary ServicesYes4100 School-Sponsored Co-curricular (optional)Yes4200 School-Sponsored Athletics (optional)Yes4900 Other Ancillary Services (optional)Yes
5000–5999 COMMUNITY SERVICESSACS FunctionChargeable to EPA?5000 Community ServicesYes5100 Community Recreation (optional)Yes5400 Civic Services (optional)Yes5900 Other Community Services (optional)Yes
6000–6999 ENTERPRISESACS FunctionChargeable to EPA?6000 EnterpriseNo
7000–7999 GENERAL ADMINISTRATIONSACS FunctionChargeable to EPA?7100 Board and SuperintendentNo7110 BoardNo7120 Staff Relations and Negotiations (optional)No7150 Superintendent (optional)No7180 Public Information (optional)No7190 External Financial Audit—Single AuditNo7191 External Financial Audit—OtherNo7200 Other General AdministrationNo7210 Indirect Cost TransfersNo7300 Fiscal Services (optional)No7310 Budgeting (optional)No7320 Accounts Receivable (optional)No7330 Accounts Payable (optional)No7340 Payroll (optional)No7350 Financial Accounting (optional)No7360 Project-Specific Accounting (optional)No7370 Internal Auditing (optional)No7380 Property Accounting (optional)No7390 Other Fiscal Services (optional)No7400 Personnel/Human Resources Services (optional)No7410 Staff Development (optional)No7430 Credentials (optional)No7490 Other Personnel/Human Resources Services (optional)No7500 Central Support (optional)No7510 Planning, Research, Development, and Evaluation (optional)No7530 Purchasing (optional)No7540 Warehousing and Distribution (optional)No7550 Printing, Publishing, and Duplicating (optional)No7600 All Other General Administration (optional)No7700 Centralized Data ProcessingNo
8000–8999 PLANT SERVICESSACS FunctionChargeable to EPA?8100 Plant Maintenance and OperationsYes8110 Maintenance (optional)Yes8200 Operations (optional)Yes8300 Security (optional)Yes8400 Other Plant Maintenance and Operations (optional)Yes8500 Facilities Acquisition and ConstructionYes8700 Facilities Rents and LeasesYes
9000–9999 OTHER OUTGOSACS FunctionChargeable to EPA?9100 Debt ServiceYes9200 Transfers Between AgenciesYes
County Office of Education onlySACS Goal Chargeable to EPA? 8600 County Services to Districts (without regard to function) Yes
- May EPA funds be used for indirect costs?
Indirect costs are not an allowable use of EPA funds because they are primarily administrative costs. - Will the CDE provide a template that LEAs can use for reporting EPA revenues and expenditures?
Proposition 30 did not prescribe a format for LEAs to report their receipt and expenditure of EPA funds, nor did it require the CDE to develop a format. Therefore, the CDE will not be providing a template. It will be at an LEA’s discretion to determine the format for reporting its EPA revenue and expenditures on its Web site. - Proposition 30 requires that the use of EPA funds be determined by the governing board at an open public meeting. Does this meeting need to be a separate meeting only for the discussion of EPA funding?
Proposition 30 language does not specify that the open public meeting has to be a separately held meeting. Therefore, this requirement may be satisfied at a regularly scheduled meeting, which the CDE believes could be the annual budget adoption meeting. - When should the open public meeting for discussing the use of 2012–13 EPA Funding be held? Most likely this will be the meeting at which the second interim report is presented, although it could be at any open public meeting before expenditures are recorded for 2012–13.
- What are some example journal entries?
a. The local educational agency (LEA) records receipt of its 2012-13 EPA entitlement in June 2013.Debit (Dr)/ Credit (Cr)Fund ResourceProject YearGoalFunctionObjectAmountCr0114000000000008012$10,000
b. For 2012-13, the school district reclassifies $10,000 of instructional expenditures (teacher salaries and benefits) originally accumulated in Resource 0000 to Resource 1400, according to the spending determination made by the governing board.Dr/Cr Fund Resource Project Year Goal Function Object Amount Dr0114000111010001100$7,000Dr0114000111010003101$1,000Dr0114000111010003401$ 700Dr0114000111010003501$ 600Dr0114000111010003601$ 400Dr0114000111010003801$ 300Cr0100000111010001100$7,000Cr0100000111010003101$1,000Cr0100000111010003401$ 700Cr0100000111010003501$ 600Cr0100000111010003601$ 400Cr0100000111010003801$ 300
c. The LEA records receipt of its 2013-14 EPA entitlement.Dr/CrFundResourceProject YearGoalFunctionObjectAmountCr0114000000000008012$9,000
d. The LEA records receipt of its 2012-13 EPA entitlement adjustment, based on 2012-13 Annual apportionment (assumes the amount was not accrued in 2012-13).Dr/CrFundResourceProject YearGoalFunctionObjectAmountCr0114000000000008019$2,000
e. For 2013-14, the school district reclassifies $11,000 of instructional expenditures (teacher salaries and benefits) originally accumulated in Resource 0000 to Resource 1400, according to the spending determination made by the governing board. (Note that an LEA could instead charge expenditures directly to EPA from the beginning.)Dr/CrFundResourceProject YearGoalFunctionObjectAmountDr0114000111010001100$7,000Dr0114000111010003101$1,000Dr0114000111010003401$ 700Dr0114000111010003501$ 600Dr0114000111010003601$ 400Dr0114000111010003801$ 300Cr0100000111010001100$7,000Cr0100000111010003101$1,000Cr0100000111010003401$ 700Cr0100000111010003501$ 600Cr0100000111010003601$ 400Cr0100000111010003801$ 300
Examples specific to county offices of education (COEs)
f. The COE determines that it will use its EPA entitlement for the instructional expenditures of its community schools program. EPA funds are transferred to the Juvenile Court/County Community Schools resource.Dr/CrFundResourceProject YearGoalFunctionObjectAmountDr0114000000000008091$15,000Cr0124000000000008091$15,000
g. An excess tax COE determines that it will use its EPA entitlement to fund some of the costs of a program that it operates on a fee-for-service basis on behalf of school districts. The program incurs costs that are allowed to be charged to EPA. In this case, the program is funded with unrestricted revenues. Therefore, EPA funds are transferred to the unrestricted resource.Dr/CrFundResourceProject YearGoalFunctionObjectAmountDr0114000000000008091$15,000Cr0100000000000008091$15,000
NOTE: If EPA funds are transferred out of Resource 1400 then the LEA should keep local accounting records to document that the EPA funds have been spent for non-administrative costs for purposes of the reporting requirement and the annual audit.
