2002/2003

THE GENERAL LEDGER

SACSIFIED
Sub-Funding and the
SAN BERNARDINO COUNTY SCHOOLS

Financial System

District Financial Services

General Ledger Contents

Pages 2 40 PowerPoint Presentation slides Exhibit A General Ledger Accounts Listing

Exhibit B
Exhibit C Exhibit D

Control Accounts
Establishing the Estimated Beginning Balance Revising the Budget

Exhibit E
Exhibit F Exhibit G Exhibit H Exhibit I Exhibit J

Journal Entries
Accrual Set-Up Closing the General Ledger Automated Asset and Liability Account Roll Corrective Action Example Account Review Checklist
2

What is the General Ledger?

The General Ledger contains all of the balance sheet accounts of an accounting system. The balance sheet accounts are the assets, liabilities, and fund balance accounts of the school district. Values in General Ledger are expressed as debits or credits.
3

Asset Accounts
Object Codes 9100 - 9499
Cash

Investments
Accounts Receivables Due from Other Funds

Fixed Assets
4

Liabilities
Object Codes 9500 - 9699
Current Liabilities Due to Other Funds

Due to Other Agencies/Government

Temporary Loans Deferred Revenue Long Term Liabilities
5

Fund Balance
Reserve Accounts Objects 9700 - 9749
Revolving Cash, Stores, and Prepaid Assets
Legally Restricted

General Reserve 9600 Designated Accounts 9770 -9789

Economic Uncertainty

Locally Designated

Unappropriated Objected 9790

6

Normal Values
Assets are Debits Liabilities are Credits

Fund Balance represents the difference between Assets and Liabilities

Credit if positive Debit if negative
7

Exhibit List

Project vs. Sub-fund

Projects / cash and expenditure activity is not audited.
Projects may have negative balances and/or a negative cash position but contributions must be posted before year end to bring account to zero.

Sub-Fund / cash transactions are audited Each resource is treated as a separate fund.
Sub-funds must maintain a positive fund balance and a positive cash position at all times.
8

Cash Stores Acct Rec Assets

2,000 100 900 3,000

Acct Pay H & W Pay Sales Tax Liabilities

500 400 100 1,000

Econ Uncern Unapprop Fund Bal

1,500 500 2,000

Assets Liabilities Fund Bal.

3,000 1,000 2,000

Formula
Assets less Liabilities equal Fund Balance

Control Accounts
Daily transactions are booked through the subsidiary ledgers (revenue and expense) leaving a trail of debits and credits in the General Ledger. Revenues are posted to Object 9840

Expenditures are posted to Object 9850

10

Control Accounts
Budget Appropriations are made in the subsidiary ledgers (revenue and expense).
Revenues are posted to Object 9810
Expenditures are posted to Object 9820 The difference is posted to Object 9799 and to the fund balance objects accounts 9790 ad 9798
11

Exhibit

Beginning Balance Accounts

Reflect values of assets and liabilities with which the district starts the year.

The estimated values from the adopted budget are summarized in Object 9791 (Beginning Balance Entry)
The adjustments for the actual values which are reported on the districts unaudited actuals are summarized in Object 9792 (Asset/Liability Automated Roll) Any Adjustments made by the Auditors are posted to Object 9793 (Budget Transfer Update)

Restatements made by the District are posted to Object 9795 (Budget Transfer Update) AND
12

Beginning Ending Balances

Reflect values of Fund Balance and Reserves with which the district starts the year (Beginning plus Revenue Less Expense equal Ending). Total fund balance from the adopted budget is summarized in Object 9798 (Control Account = F2 Fund Form) Components of the Ending Fund Balances are detailed and provide the break out for the SACS Fund Form Detail (must sum to Control Object 9798)
Reserve Accounts 9700-9749 Designated Accounts 9770- 9789 Unapporpriated Balance 9790
13

Beginning Balance Accounts continued

The estimated Beginning Fund Balance values are manually entered through the ACCLI Beginning Balance Link menu and reflected on report FCR 125 along with the estimated budget year ending fund balances. These values and input screens are locked upon submission of the budget and roll of the tentative budget to the Adopted Status. These values must be in balance for all resources detailed.
14

Adopted Budget Roll

The Tentative Roll from Budget Development to the General Ledger sets up all the accounts. The roll will not proceed if the account does not pass the account edits of state and county approved field values and combinations. The Adopted Roll is initiated by DAS once the hard copy of the Districts Certified Adopted budget is validated and is checked to agree with the values in the General Ledger.

Information Systems launches the job that takes the budget values to the Adopted Status
15

Adopted Budget Posting

The launched job proceeds to roll each account and dollar value to adopted .

Entries are made to the control accounts for total revenue (9810 - debit) and total expense (9820credit), resource by resource. Since the GLD is a balanced set of records values are also posted in a control account 9799 for each resource. This entry to posted as activity as of the date the job is launched.
Revenue (9810) less Expense (9820) Equal Net Change (9799)
16

Adopted Budget Posting

The job also takes this calculated Net Change Amount and adds it to the unappropriated fund balance account 9790 and to the fund balance control account 9798, resource by resource. These accounts are updated in the ACCLI Beginning Balance Program which are then reflected on the GLD report as the beginning value for this account, resource by resource.

Beginning Balance (9791) Plus Net Change (9799) Equals Ending Fund Balance (9798)
17

Exhibit C

Revising the Adopted Budget

After the adopted budget roll the district may process budget revisions changing revenue, expense or fund balance values.
Intra-district * within expense objects or within revenue objects Audit Batches * affects both revenue and expense or fund balance.
Changes that affect the unappropriated fund balance account 9790 automatically post to the fund balance control account 9798, resource by resource. Revenue Control (9810) Expenditure Control (9820) Change (9799) Equals Ending Fund Balance (9798)
18

Exhibit D

Beginning Balance Accounts continued

Each update/revision of the Beginning Fund Balance Accounts (9791, 9792, 9793, or 9795) also update the ending fund balance accounts - 9790 and 9798 (Budget Transfer Automatic Update) Budget Transfer Edits check formula
Assets Less Liabilities equal Control Account Decrease to Asset must Decrease Control Account Decrease to Liability must Increase Control Account Increase to Asset must Increase Control Account Increase to Liability must Decrease Control Account
19

Daily Transactions
Payroll , Accounts Payable, Cash Receipts, and Cash Transfers are programs that create transactions that reflect activity (use) of District assets.
Payroll Wage Payments - Gross Expenditures Fringe Benefit Payroll Mapping Vendor Payments Employee reimbursements Sales Tax Liabilities Capital Outlay Revenue Receipts Interfund transfers Accounts Payable

Cash Receipts and Transfers

Control Accounts

Encumbrance (9830)

Pending (9835)

Revenue(9840)

Expenditure (9850)
20

Exhibit E

Payroll Benefit Mapping

Most Districts use the payroll benefit mapping program to charge employer costs to the individual 26-digit program account code where the employee was paid.
Unemployment Insurance (U/I)
Debit Subsidiary Ledger (3501) Credit Suspense Account (9565) Debit Expenditure Control (9850)

Workers Compensation (WC)

Debit Subsidiary Ledger (3601) Credit Suspense Account (9566) Debit Expenditure Control (9850)
21

Payroll Benefit Mapping Cont.

Some Fixed Charges are posted right to cash and given to the Reporting Entity (Retirement and School Claims).
Retirement (STRS/PERS)
Debit Subsidiary Ledger (3101/3202) Credit CASH Account (9110) Debit Expenditure Control (9850)

Medicare (MC)
Debit Subsidiary Ledger (3341) Credit Suspense Account (9110) Debit Expenditure Control (9850)

22

Payroll Benefit Mapping Cont.

Some Fixed Charges are posted to one of the District Other Funds waiting for an interfund to reimburse the General Fund where most payments to vendors or Risk Management are charged in the Suspense Account). Health and Welfare (H&W)
Debit Subsidiary Ledger (3411/3412) Credit CASH Account (9564) Debit Expenditure Control (9850)

Interfund Charge/Reimbursement

Debit Subsidiary Ledger (N/A already charged by map) Credit Cash Account (9110) Debit Suspense Account (9564) Debit Cash General Fund (9110) Credit Suspense General Fund (9564)
23

PERS Reduction Mapping

The difference between actual employer PERS charges and the base rate of 13.020% is charged to the PERS Reduction Accounts for all resources except federal which are excluded. The type of account (R or Blank) restricted/nonrestricted and if to charge PERS Reduction or not is identified in the Field Definition (P or Blank).
PERS Reduction
Debit Subsidiary Ledger Expense (3801/3202) Credit Subsidiary Ledger Revenue (8092) Credit Revenue Control (9840) Debit Expenditure Control (9850)

Other Funds

Debit Subsidiary Ledger (3801/3802) Credit Suspense Account (9572) Debit Expenditure Control (9850)
24

Stores
Some Districts have warehousing facilities in which they purchase goods and hold them in an asset inventory until issued out to a school or program.
Purchase Stock Issue Debit Stores Account (9320) Credit Cash (9110) Debit Subsidiary Ledger Credit Stores Account (9320) Debit Expenditure Control (9850)

Inventory Requisition Evaluation (LIFO) Adjs (9329) Physical Inventory Adjustment (lower value) Debit Subsidiary Ledger Credit Stores Account (9320) Debit Expenditure Control (9850)

25

Capital Outlay
Upon purchasing an item of capital outlay (determined by the Districts threshold value) the funds are charged for the cash value paid and the fixed asset programs are updated.
Purchase Debit Subsidiary Ledger (6410) Credit Cash (9110)_ Debit Expenditure Control (9850) Debit Fixed Asset Account (9440) Credit Investment (9990)

Fixed Asset

AS items are used (depreciated) the Fixed Asset Program records and accumulates the depreciation.

Annual Depreciation Debit Depreciation (6900) Credit Accumulated Depreciation (9445)

Note: GASB34 Conversion Entries to Government Funds
26

Prepaid Expense
Some Districts enter into obligations that have an advance payment due before the use of the item. At fiscal year end goods or services paid but not used for the accounting period should be recognized as a prepaid asset. The asset should then be expensed when used.
Purchase Debit Prepaid Expense (9130) Credit Cash (9110) Expensed upon use in next accounting period Debit Subsidiary Ledger Credit Prepaid Expense Account (9130) Debit Expenditure Control (9850) Note: Grants cannot have prepaids
27

Annual Adjustments
California Schools System operate on a modified accrual basis. At year end Districts are required to book accrual entries for liabilities for goods and services received before June 30 but not paid. Also receivables must be recognized for funds due that will be received within 60-days of the fiscal year end or certified in the annual State apportionment Receivables
SET-UP Receipt Credit to Subsidiary Ledger Debit to Receivable Asset Account Credit to Receivable Asset Account Debit to Cash Debit to Subsidiary Ledger Credit to Liability Account Debit to Liability Account Credit to Cash 28

Payables
SET-UP Receipt

Exhibit F

YEAR-END CLOSING
Budgetary and operating accounts are closed leaving only the asset, liability, and fund balance accounts open. Procedure
accounts that need to be closed out.

501 of the California School Accounting Manual identifies the general ledger operating

Budgetary
Revenue (9810) Expenditure (9820)

Operating Accounts
Revenue (9840) Expenditure (9850)
29

Exhibit G

Establishing Accruals
Accruals are entered in using the receivables and current liability program.
Receivables
Revenues and Abatements (1000-8899) Set-up Control

9229

(9229, 9299,9319)

Revenue/Expenditure Control (9840/9850)

Current Liabilities
Revenues Refunds and Expenditures (1000-8899) Set-up Control

9529

(9529, 9599,9619, 9659)

Revenue/Expenditure Control (9840/9850)

30

Establishing Accruals
Limitations currently exist to appropriately classify Accruals for the Annual Financial Balance Sheet and are adjusted using Journal entries.
Due From
Set-up Control

9229 Credit Due From Account 9319 Debit 9529 Debit Due t To Account 9619 Credit
31

Due To
Set-up Control

ASSET & LIABILITY ROLL

Actual Asset and Liability values are posted to Next Fiscal Year Beginning Balance adjusting the estimated amounts.
ASSETS LIABILITIES

FUND BALANCE ADJUSTMENTS

Exhibit H
32

OK So... What is a Balance Sheet?

140 120 100 80 60 40 20 0 -20 -40

NET Worth Bottom Line Value

Title 1 Instr Mtls Spec Educ

Fund Balance How much is left? Displays the value of the school districts assets less liabilities for a given period.

Payables

Balance

Cash

A/R

33

Correcting/Adjusting the GLD

Budget Transfer
Correct/Adjust Values

Journal Entries
Correct Activity within same resource

Cash Journal Entries

Correct Activity offsetting to Cash between one resource and another

NEVER NEVER NEVER USE A JOURNAL TO

ADJUST A FUND BALANCE ACCOUNT 97XX BUDGET TRANSFERS MAKE REVISIONS TO BEGINNING OR ENDING FUND BALANCES Exhibit I
34

Check List
Review Batch List to see if activity has been posted or distributed. Validate Working Budget represents current plan (Grants & Entitlements normally treated as 100% expended No Fund Balance) Contributions, State Aid Transfers, Interprogram, and Interfund transfers are in balance.

Combo Maintenance Report reflects all accounts pass edit test.

35

TIP
GLD 115 GLD 410 FAR 311

Exhibit J

GLD 410 Report

GLD410 u/a by fund 01 School District OBJECT NUMBER SAN BERNARDINO COUNTY SCHOOLS COMPUTER CONSORTIUM FINANCIAL STATEMENT FOR PERIOD ENDING 06/30/1998 FUND: 01 GENERAL FUND ADOPTED BUDGET .00 0.00 1,523,457.00 BUDGET ADJUSTMENTS 538,464.00(538,464.00) 1,076,928.00268,322.00 CURRENT BUDGET 538,464.00(538,464.00) 1,076,928.001,791,779.00

DESCRIPTION NET CHANGE IN FUND BALANCE TOTAL ASSETS TOTAL LIABILITIES NET ASSETS AND LIABILITIES

FUND BALANCE COMPONENTS 9711 RESERVE FOR REVOLVING CASH 9712 RESERVE FOR STORES 9713 RSRVE FOR PREPAID EXPENDITURES 9740 LEGALLY RESTRICTED BALANCE 9770 DESIGNATED FOR ECON UNCERTAIN 9790 UNDESIGNATED/UNAPPROPRIATED TOTAL FUND BALANCE

7,500.0085,000.00.00 .00 632,697.00798,260.001,523,457.00-

2,500.007,717.001,219.00115,456.5356,264.00453,298.53 270,142.00

10,000.0092,717.001,219.00115,456.53688,961.00344,961.471,253,315.00-

Display from Activity Fund Balance When in Balance No error reported

36

GLD 410 Report

S U M M A R Y REVENUES EXPENDITURES EXCESS REVENUES (EXPENDITURES) OTHER FINANCING SOURCES (USES) NET CHANGE IN FUND BALANCE FUND BALANCE : BEGINNING BALANCE UNAUDITED ACTUALS AUDIT ADJUSTMENTS RESTATEMENTS TOTAL BEGINNING BALANCE ENDING FUND BALANCE 1,523,457.00 .00 .00 .00 1,523,457.00 1,523,457.00 .00 268,322.00 .00 .00 268,322.00 270,142.001,523,457.00 268,322.00 .00 .00 1,791,779.00 1,253,315.00 21,089,897.00 20,842,258.00 247,639.00 247,639.00.00 2,006,003.00 2,375,463.00 369,460.00169,004.00538,464.0023,095,900.00 23,217,721.00 121,821.00416,643.00538,464.00-

Calculated Fund Balance

37

SACS Software Basic Tests

Beginning Balance plus Revenue less Expense equal Fund Balance Assets less Liabilities equal Fund Balance No Negative Fund Balance
38

Test your knowledge

Ledger

39

Look At Your Ledgers Now! Develop a Plan

Do your Grants and Entitlements accounts agree with your award and carryovers? What items will you allocate - PERS Reduction, Indirect Costs, Support Costs?

Check out those Suspense Accounts!

40