School Districts Accounting and Reporting Manual

Office of the NEW YORK STATE

COMPTROLLER

School Districts

Accounting and Reporting Manual

New York State Comptroller

THOMAS P. DiNAPOLI

AUGUST 2021

Updated August 2021 to reflect:

Accounting Bulletin (revised November 2020) ? Accounting and Financial Reporting for Fiduciary Activities as Required by GASB Statement 84 ? Deleted the agency fund, updated the privatepurpose trust fund, and added the custodial fund in chapters 2 and 4. Updated journal entry 31 to demonstrate how to account for payroll withholdings in the general fund and deleted journal entry 31b as agency funds are no longer active. Deleted all agency fund codes and added custodial fund codes and miscellaneous general fund codes in the account code appendix.

Accounting Bulletin (July 2020) ? Coronavirus Aid, Relief and Economic Security (CARES) Act Information ? Added account code 4286 ? Federal Aid, CARES Act Education Stabilization Fund in the account code appendix.

Table of Contents

PART I - Accounting and Reporting

1

Chapter 1 - Introduction

1

Chapter 2 - Basic Governmental Accounting Principles

3

Chapter 3 - Measurement Focus and Basis of Accounting

9

Chapter 4 - Funds and Supplemental Schedules

13

Chapter 5 - Classification and Coding Structure

17

Chapter 6 - Budgeting

23

Chapter 7 - Financial Reporting

28

Chapter 8 - Sample Journal Entries

30

PART II ? APPENDIX

105

School District Account Codes

106

Contacts

158

Part I - Accounting and Reporting

Chapter 1 - Introduction

The Office of the State Comptroller (OSC) has compiled this manual as a comprehensive accounting guide for school district officials and others interested in accounting by school districts in New York State. It provides an overview of generally accepted governmental accounting and financial reporting principles, and OSC's interpretations of such principles, where pronouncements are silent or do not address problems common among school districts within New York State.

The basic responsibility for oversight of school districts by the State Comptroller is contained in the State Constitution and Article 3 of the General Municipal Law (GML). Among other things, the State Comptroller's responsibilities include: performing audits (GML, Sections 33, 34, 35), prescribing information to be included in annual financial reports (GML, Sections 30, 31, 32), prescribing a uniform system of accounts (GML, Section 36), and preparing an annual report to the State Legislature (GML, Section 37).

OSC has made a commitment to prescribe an accounting system which generally conforms to generally accepted accounting principles (GAAP). OSC prescribes a Uniform Systems of Accounts pursuant to GML, Section 36. The System of Accounts provides for a standard chart of accounts and fund structure that is the basis for the annual financial reports (ST-3) required to be filed with the State Education Department (SED) and the State Comptroller. For additional information, please see the SED website at p12.mgtserv/.

Generally Accepted Accounting Principles for Governmental Units

GAAP are uniform minimum standards of and guidelines to financial accounting and reporting. They are the framework within which financial transactions are recorded and reported resulting in financial statements that provide comparability between governmental entities, consistency between accounting periods and reliability for internal and external users of financial statements.

Since GAAP for local governments is not static but evolving, OSC is involved in such activities as monitoring and responding to proposed pronouncements; amending the Accounting Systems when appropriate in light of new or revised standards; and assisting local officials in understanding and implementing GAAP through conferences, workshops and seminars. This updated manual is an example of this activity.

A brief overview of the history of standard setting for private enterprises and for government is helpful in understanding the sources of GAAP for governments. The first formal efforts to establish GAAP for private enterprises began in 1930 in response to the financial difficulties experienced during the Great Depression. Over the years, the American Institute of Certified Public Accountants (AICPA) established GAAP. In 1973, the Financial Accounting Standards Board (FASB) was formed. Since 1973, FASB has prescribed GAAP for commercial and non-profit organizations. FASB operates under the auspices of the Financial Accounting Foundation (FAF), an independent non-profit foundation.

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