CALIFORNIA SCHOOL ACCOUNTING MANUAL

CALIFORNIA SCHOOL ACCOUNTING MANUAL

2019 EDITION

Officially approved by the California State Board of Education Published by the California Department of Education Sacramento, 2019

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CALIFORNIA SCHOOL ACCOUNTING MANUAL

2019 EDITION

Officially approved by the California State Board of Education in accordance with Education Code Section 41010 for required use by California public schools

Prepared under the direction of the School Fiscal Services Division California Department of Education

Publishing Information

The California School Accounting Manual (2019 Edition) was approved by the California State Board of Education on January 9, 2019. The members of the State Board were the following: Dr. Michael Kirst, State Board President; Dr. Ilene Straus, State Board Vice President; Ms. Sue Burr, Mr. Bruce Holaday, Dr. Feliza I. Ortiz-Licon, Ms. Patricia Ann Rucker, Dr. Nicolasa Sandoval, Dr. Ting L. Sun, Dr. Karen Valdes, Ms. Trish Boyd Williams, Gema Cardenas, Student Member.

This publication was developed by the School Fiscal Services Division, California Department of Education. It was designed and prepared for printing by the staff of CDE Press. It was published by the Department of Education, 1430 N Street, Sacramento, CA 95814-5901. It was distributed under the provisions of the Library Distribution Act and Government Code Section 11096.

? 2019 by the California Department of Education

All rights reserved

ISBN 978-0-8011-1800-5

Ordering Information

This publication is available to be viewed, printed, or downloaded from CDE's Definitions, Instructions, & Procedures web page at .

California School Accounting Manual

Contents

(To view and search this manual electronically, visit CDE's Definitions, Instructions, and Procedures web page at .)

A Message from the State Superintendent of Public Instruction .................................................xiii

Introduction.................................................................................................................................. xv

SECTION 100 GENERAL ACCOUNTING PRINCIPLES

Procedure 101

Governmental Accounting

Revised March 2016............................................................................................................... 101-1

Generally Accepted Accounting Principles ......................................... 101-1 Governmental Accounting Principles .................................................. 101-1 Measurement Focus ............................................................................. 101-2 Basis of Accounting ............................................................................. 101-2 Revenue Recognition ........................................................................... 101-3 Financial Reporting.............................................................................. 101-4

Procedure 105

Fund Accounting

Revised October 2011 ............................................................................................................ 105-1 Definition and Purpose of Funds ......................................................... 105-1 Categories and Types of Funds............................................................ 105-1 Restricted Programs and Activities Within the General Fund............. 105-4

SECTION 200 ACCOUNTING PROCESSES

Procedure 201

Books of Accounts

Revised March 2016............................................................................................................... 201-1

Chart of Accounts ................................................................................ 201-1 Double-Entry Accounting .................................................................... 201-1 Journals ................................................................................................ 201-2 General Ledger..................................................................................... 201-2 Subsidiary Ledgers............................................................................... 201-3 Control Accounts in the Chart of Accounts ......................................... 201-3 Computerized Systems......................................................................... 201-4

Procedure 205

The Accounting Cycle

Revised January 2019 ............................................................................................................ 205-1

Sequence of the Accounting Cycle ...................................................... 205-1 Source Documents ............................................................................... 205-2 Analyzing Transactions ....................................................................... 205-2 Recording Transactions in Journals ..................................................... 205-4 Posting to the Ledger ........................................................................... 205-4 Trial Balance and Adjustments ............................................................ 205-5 Financial Statements ............................................................................ 205-6 Closing the General Ledger ................................................................. 205-7

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California School Accounting Manual

Contents

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Reversing Entries ................................................................................. 205-8

Procedure 210

Budgetary Accounting

Revised March 2016............................................................................................................... 210-1

Budgetary Accounts and Integration ................................................... 210-1 Recording Budgeted Revenues ............................................................ 210-3 Recording Budgeted Expenditures ...................................................... 210-5 Recording Budgeted Components of Fund Balance ............................ 210-9 Checking the Trial Balance................................................................ 210-11 Recording Encumbrances .................................................................. 210-12 Recording Adjustments to the Budget ............................................... 210-20

Procedure 215

Audit Adjustments

Revised January 2019 ............................................................................................................ 215-1

Reaching Agreement on Audit Adjustments ....................................... 215-1 Suggested Steps for Booking Audit Adjustments................................ 215-2 Audit Adjustments and Other Restatements of Fund Balance............. 215-4 Common Audit Adjustments ............................................................... 215-4 Schedule of Audit Adjustments ......................................................... 215-11

SECTION 300 CHART OF ACCOUNTS

Procedure 301

Overview of the Standardized Account Code Structure

Revised March 2016............................................................................................................... 301-1

Standardized Account Code Structure Fields ...................................... 301-2 Standardized Account Code Structure Layout..................................... 301-5 Use of the Standardized Account Code Structure................................ 301-6

Procedure 305

Fund Classification

Revised January 2019 ............................................................................................................ 305-1

How the Fund Field Is Used ................................................................ 305-1 Flexibility of the Fund Field ................................................................ 305-1 List of Fund Codes............................................................................... 305-2 Fund Code Definitions ......................................................................... 305-4

Procedure 310

Resource (Project/Reporting) Classification

Revised January 2019 ............................................................................................................ 310-1

How the Resource Field Is Used.......................................................... 310-1 Flexibility of the Resource Field.......................................................... 310-4 Table of Resource Codes ..................................................................... 310-5

Procedure 315

Project Year Classification

Revised January 2019 ............................................................................................................ 315-1 How the Project Year Field Is Used .................................................... 315-1

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California School Accounting Manual

Contents

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Examples of Project Year Codes ......................................................... 315-2 Flexibility of the Project Year Field .................................................... 315-2

Procedure 320

Goal Classification

Revised March 2016............................................................................................................... 320-1

How the Goal Field Is Used................................................................. 320-1 Flexibility of the Goal Field................................................................. 320-2 Importance of the Goal Field in Program Cost Accounting ................ 320-2 List of Goal Codes ............................................................................... 320-3 Goal Code Definitions ......................................................................... 320-5

Procedure 325

Function (Activity) Classification

Revised January 2019 ............................................................................................................ 325-1

How the Function Field Is Used .......................................................... 325-1 Flexibility of the Function Field .......................................................... 325-1 Importance of the Function Field in the Indirect Cost Rate

Calculation ..................................................................................... 325-2 List of Function Codes......................................................................... 325-3 Function Code Definitions ................................................................... 325-6

Procedure 330

Object Classification

Revised January 2019 ............................................................................................................ 330-1

How the Object Field Is Used .............................................................. 330-1 Flexibility of the Object Field.............................................................. 330-1 List of Object Codes ............................................................................ 330-2 Object Code Definitions .................................................................... 330-13

Procedure 335

School Classification

Revised July 2005 ................................................................................................................... 335-1 How the School Field Is Used ............................................................. 335-1

Procedure 340

Valid Account Code Combinations

Revised January 2019 ............................................................................................................ 340-1

Function by Object Combinations ....................................................... 340-1 Fund by Function Combinations.......................................................... 340-2 Fund by Goal Combinations ................................................................ 340-2 Fund by Object Combinations ............................................................. 340-3 Fund by Resource Combinations ......................................................... 340-4 Goal by Function Combinations .......................................................... 340-5 Resource by Object Combinations....................................................... 340-6

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California School Accounting Manual

Contents

(To view and search this manual electronically, visit CDE's Definitions, Instructions, and Procedures web page at .)

Procedure 345

Illustrations Using the Account Code Structure

Revised March 2016............................................................................................................... 345-1

Revenue Transactions .......................................................................... 345-1 Expenditure Transactions..................................................................... 345-3 Balance Sheet Transactions ................................................................. 345-4

SECTION 400 TOPICS RELATING TO ASSETS AND LIABILITIES

Procedure 405

Accounting for Inventories

Revised January 2019 ............................................................................................................ 405-1

Fund Type ............................................................................................ 405-1 Typical Entries ..................................................................................... 405-2 Determining the Cost of Inventory ...................................................... 405-2 Overhead .............................................................................................. 405-3 Physical Inventory ............................................................................... 405-5

Procedure 410

Conducting a Physical Inventory

Revised January 2019 ............................................................................................................ 410-1

Precount Procedures............................................................................. 410-1 Counting Procedures ............................................................................ 410-2 Recount Procedures ............................................................................. 410-3

Procedure 415

Adopting a Stores System

Revised January 2019 ............................................................................................................ 415-1

Methods of Financing, Controlling, and Accounting for Stores.......... 415-1 Types of Supplies in a Stores System .................................................. 415-1 Essentials of a Stores System............................................................... 415-2

Procedure 420

Prepaid Expenditures

Revised January 2019 ............................................................................................................ 420-1

Procedure 425

Fair Value: Accounting and Reporting for Certain Investments

Revised January 2019 ............................................................................................................ 425-1

Determining Fair Value ....................................................................... 425-1 Recognition and Reporting of Investment Income .............................. 425-2 Fund Balance Classification for Unrealized Gains .............................. 425-6 Materiality of Adjustments to Fair Value ............................................ 425-6

Procedure 430

Capital Assets

Revised March 2016............................................................................................................... 430-1

Recordkeeping Requirements for Capital Assets ................................ 430-1 Accounting for Acquisition of Capital Assets ..................................... 430-2 Valuation of Property and Equipment ................................................. 430-2

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