Rule Changes and the American Recovery and Reinvestment Act (ARRA)

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  • 1. Illinois State Board of Education FY2009 Annual Financial Reports Rule Changes and the American Recovery and Reinvestment Act (ARRA)
  • 2. Rules Currently In Effect
      • Title 23,
      • Illinois Administrative Code,
      • Part 100
      • www.isbe.net
      • Requirements for Accounting, Budgeting, Financial Reporting, and Auditing
      • http://www.isbe.net/rules/archive/pdfs/100ARK.pdf
      • Emergency Amendments
      • http://www.isbe.net/rules/archive/pdfs/23IAC100EmergAmnd_Code.pdf
  • 3. ISBE Webpage www.isbe.net New Rules are available here for viewing
  • 4.
    • Part 100 - Requirements for Accounting, Budgeting, Financial Reporting, and Auditing
    • Effective 07/01/08
    • Replaced Part 110 – Illinois Program Accounting Manual (IPAM) & Part 125 – Student Activity Funds/Convenience Accounts
    • Part 100 - Emergency Amendments for Federal Stimulus - American Recovery & Reinvestment Act (ARRA)
    • Effective 04/17/09
    Rule Changes
  • 5.
    • Fund Account
    • Balance Sheet XX XXX
    • Revenue XX XXXX
    • Fund Function Object “Source”
    • Expenditure XX XXXX XXX (xxxx)
    • Additional Codes:
    • - Transaction Type X
    • - Fiscal Year XX
    State Reporting Requirements
  • 6. ISBE Form 50-35 FY2009 Changes School District Annual Financial Report
  • 7. School District AFR Page 2 Auditor’s Questionnaire
  • 8.
    • Pages 5 & 6
    • Reclassifies Assets, Liabilities & Fund Balances
    • Adds Accounts for GAAP Based Reporting
    School District AFR
  • 9. Pages 7 & 8 School District AFR
  • 10.
    • Eliminate Rent Fund (Fund 80) and Create Tort Immunity/Judgment Fund
    • Rename Bond & Interest Fund (Fund 30) as Debt Service Fund
    • Rename Site & Construction Fund/Cap. Imp. Fund (Fund 60) as Capital Projects Fund
    Rule Changes
  • 11.
    • Expand 7000 & 8000 Accounts (Other Financing Sources/USES) for Pledged Transfers to Debt Service Fund or Capital Projects Fund
    • Consolidate Accounts for Abolishment or Abatement of Working Cash Fund to Educational Fund
    Rule Changes
  • 12. Receipts/ Revenues (Pages 9 -14) Funding Acc’t Local 1000s Flow-Through 2000s State 3000s Federal 4000s School District AFR
  • 13.
    • Add “Local” Revenue Accounts:
    • - Impact Fees (Acc’t 1930)
    • - TIF Payments (Acc’t 1960)
    • - Driver Education Fees (Acc’t 1970)
    • - Vendor Contract Proceeds (Acc’t 1980)
    Rule Changes
  • 14. Disbursements/Expenditures (Pages 15 - 22) Functions Acc’t Instruction 1000s Support Services 2000s Community Serv. 3000s Nonprogram. Chgs.* 4000s Debt Serv. 5000s Contingencies 6000s * Renamed - Payments to Other Districts and Governmental Units School District AFR
  • 15.
    • Add “Instruction” Functions:
    • - Pre-K Programs (Acc’t 1125, 1225, 1275)
    • - Driver Education (Acc’t 1700)
    • - Tuition Payments to Private Entities
    • (Acc’ts within 1900s)
    Rule Changes
  • 16.
    • Expand 2300 Functions to Include Accounts for Tort Immunity/Judgment Fund
    • Rename 4000 Functions to “Payments to Other LEAs and Governmental Units” for Payments to LEAs for Tuition and Transfers
    Rule Changes
  • 17.
    • Expand 5000 Accounts for Principal and Interest Payments on Various Long/Short-Term Debt
    • Reclassify Object Dimensions 700 (Transfers) and 800 (Tuition) within 600 (Other) in Combination with Adding New Function Codes
    • Add Non-Capitalized Equipment (700) and Termination Benefits (800)
    Rule Changes
  • 18.
    • Financial Profile
    • Schedules of Restricted Tax Levies &
    • Tort Immunity Expenditures
    • Schedule of Capital Outlay
    • Operating Expenditures & Per Capita Costs
    • Schedule of Indirect Cost Data
    Rule Changes, Impact on School Districts
  • 19. Financial Profile (Page 4)
    • “ Operating Funds”
    • Educational
    • O&M
    • Transportation
    • Working Cash
    School District AFR
  • 20. Schedules of Restricted Tax Levies & Tort Immunity Expenditures (Page 26) School District AFR
  • 21. Schedule of Capital Outlay (Page 27) Non – Capitalized Equipment School District AFR
  • 22. Operating Expenditures & Per Capita Costs (Pages 28 & 29) Capital Outlay Pre-K School District AFR Tort Fund Payments to Other Districts/Gov’t Units
  • 23. Schedule of Indirect Cost Data (Page 30) School District AFR
  • 24.
    • Audit Requirements
    • Audits are in accordance with generally accepted governmental auditing standards ---“Standards for Audit of Government Organizations, Programs, Activities and Functions” (2007) published by the Comptroller General of the United States.
    School District AFR
  • 25.
    • American Recovery & Reinvestment Act (ARRA)
  • 26.
    • Historic, one-time investment to stimulate economy & improve education
    • Effective with the second General State Aid payment in April 2009, ARRA funds were distributed to school districts
    American Recovery & Reinvestment Act (ARRA)
  • 27. American Recovery & Reinvestment Act (ARRA)
    • Definitions:
    • ARRA – “American Recovery and Reinvestment Act of 2009”
    • SFSF Program – State Fiscal Stabilization Fund Program (ARRA General State Aid)
    • ARRA – Title I Funds
    • ARRA – IDEA Funds
    • ARRA Capital Projects:
      • Qualified School Construction Bonds (QSCB)
      • Qualified Zone Academy Bonds (QZAB)
      • Build America Bonds (BAB)
  • 28. ISBE Webpage (www.isbe.net) “ Hot Topics’ For ARRA Issues
  • 29.
    • ISBE will be using SFSF funds to pay the final GSA payments in FY 2009
    • It is anticipated that the SFSF funds will be utilized to pay for approximately five GSA payments in FY 2010
    • Districts should have submitted an application & assurance statement for ARRA-GSA funds by 4/17/09
    • Districts will be required to report on the estimated number of jobs saved and/or created by SFSF funds. Guidance will be forthcoming.
    • Districts will be required to track and report on expenditures paid with ARRA funds
    Payment of ARRA GSA Funds
  • 30. Application & Assurance Statement
    • Districts are to administer and use the SFSF program funds in accordance with all applicable statutes, regulations, and applications
    • Recipients cannot use SFSF funds for:
      • Payment of maintenance costs;
      • Stadiums or other facilities used for athletic contests, exhibitions or other events for which admission is charged to the general public;
      • Purchase or upgrade of vehicles;
      • Improvements of stand-alone facilities whose purpose is not the education of children – such as central office administrative buildings;
      • Financial assistance to students to attend private elementary or secondary schools unless the funds are used to provide special education and related services to children with disabilities as authorized by the IDEA Act;
      • School modernization, renovation, or repair that is inconsistent with State Law.
  • 31. Emergency Accounting Rules
    • Because of the tracking necessary for ARRA federal funds, emergency accounting rules were necessary to:
    • Designate ARRA revenue districts receive
    • Document ARRA expenditures paid via each type of ARRA revenue source
  • 32. ISBE Emergency Rules
    • Accounting Requirements for ARRA Revenues and Expenditures
    • Emergency Rules and Regulations have been posted for accounting requirements and are located at:
    • http://www.isbe.net/rules/archive/pdfs/23IAC100EmergAmnd_Code.pdf
  • 33. ISBE Emergency Rules
    • ARRA GSA funds received should have a revenue account/source code of 4850 and may be deposited into any fund except Working Cash
    • Other NEW ARRA revenue account codes:
      • 4851 – 4855 Title I Low Income; Neglect, Private; Delinquent, Private; School Improvement (Part A); School Improvement (Part G)
      • 4856 – 4857 IDEA Part B, Preschool; IDEA Part B, Flow-Through
  • 34. ISBE Emergency Rules
    • Other NEW ARRA revenue account codes (cont.):
      • 4860 – 4861 Title IID, Technology - Formula; Title IID, Technology - Competitive
      • 4862 – McKinney - Vento Homeless Education
      • 4863 – Child Nutrition Equipment Assistance
      • 4864 – 4865 Impact Aid Formula Grants and Impact Aid Competitive Grants
      • 4866 – 4869 QZAB Tax Credits, QSCB Credits, BAB Tax Credits, and BAB Interest Reimbursement
      • 4870 – 4880 Designated for other ARRA revenues and must be specified
      • These can be located in Table C of the Emergency Rules
  • 35. ISBE Emergency Rules
    • ARRA Expenditures must reflect Fund, Function, Object, and now a NEW fourth dimension -- revenue source code
    • Fund Function Object Revenue Source Code
    • XX XXXX XXX XXXX
    • 10 1100 100 4850
  • 36. ISBE Emergency Rules
    • All funds must be expended in accordance to their respective purposes as authorized by the relevant federal law, regulation, and guidance
    • In order to comply with the federal regulations, each district receiving funds under ARRA shall include in its annual financial report (AFR) a detailed schedule of its receipts and expenditures for each revenue source received
    • Districts will need their auditors to audit the detailed schedule of receipts and expenditures
    • Districts may now be required to have an A-133 Single Audit conducted. They should inquire with their auditor if this will be necessary for the audit of their Fiscal Year 2009 and if their auditor meets the necessary criteria to conduct A-133 audits
  • 37. ISBE Emergency Rules AFR - Page 23 ARRA -Schedule of Receipts & Disbursements
  • 38.
    • Since the ARRA GSA payments are considered federal funds, ISBE is asking for guidance as to whether these funds can accumulate interest.
    • Until this guidance is received, it is recommended that districts reflect ARRA GSA revenues were used to pay for allowable expenditures and reflect local revenue as invested.
    Accumulated Interest
  • 39.
    • Fiscal Year 2009 Issues
    • Districts may be required to amend their budgets
    • Budgets – To Amend or Not??
      • If a district is expending ARRA funds in FY 2009 and these expenditures are not budgeted in the current budget, a budget amendment will be necessary
      • If a district is expending ARRA funds in FY 2009 and the total expenditures in any fund is more than their current budget, a budget amendment will be necessary
      • If a district is expending just ARRA GSA, most probably the expenditures are already budgeted, the total expenditures in any fund will not increase and a budget amendment will not be necessary
      • If a district is expending ARRA Title I, ARRA IDEA, etc. most probably the expenditures are not budget, the total expenditures will increase and a budget amendment will be necessary – this includes flow-through funds from a special education cooperative
    ISBE Emergency Rules
  • 40. ISBE Emergency Rules
    • For Fiscal Years 2010 and 2011
    • For FY 2010 and 2011 Budgets
      • Districts will be required to document expenditures with fund, function, object, and revenue account code for ARRA expenditures within their detailed ledger reports
      • ISBE budget is not expected to change as ISBE does not collect expenditures to the fourth dimension – “revenue account code”
    • For FY 2010 and 2011 AFR
      • The 2010 and 2011 AFR will include the ARRA schedule of receipts and expenditures to document revenue/expenditures of ARRA funds
      • The schedule is part of the district’s audit
      • An A-133 Single Audit may be necessary
  • 41.
    • For Fiscal Year 2012
    • For FY 2012 Budget
      • Districts will be required to document expenditures with fund, function, object, and revenue account code for ARRA expenditures within their detailed ledger reports as ARRA Funds can be obligated and expended through September 2011.
      • ISBE budget is not expected to change as ISBE does not collect expenditures to the fourth dimension – “revenue account code”
    • For FY 2012 AFR
      • The 2012 AFR will include the ARRA schedule of receipts and expenditures to document revenue/expenditures of ARRA funds
      • The schedule is part of the district’s audit
      • An A-133 Single Audit may be necessary
    ISBE Emergency Rules
  • 42. Bond Options
    • Qualified Zone Academy Bonds (QZAB)
    • Qualified School Construction Bonds (QSCB)
    • Build America Bonds (BAB)
    • Additional information & applications available on the ISBE web site at:
    • http://www.isbe.net/construction/html/qzab.htm
  • 43.
    • Questions ?
  • 44.
    • School Business Services Division
    • 217/785-8779
    • http://www.isbe.net/sbss/default.htm