WHAT'S NEW. Update 14

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WHAT'S NEW

Update 14

A MODULE OF THE

TEXAS EDUCATION AGENCY

FINANCIAL ACCOUNTABILITY SYSTEM

RESOURCE GUIDE

Published by

Texas Education Agency

Austin, Texas

January 2010

Note: This document is formatted primarily for use on the Internet. Certain underlined passages may appear in the paper format representing hyperlinks to sites on the Internet that

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Module One - Financial Accounting and Reporting

Changes have been made throughout the FAR.

Miscellaneous Changes in FAR Module - Update 14

Section No. Topic Description of

change(s)

1.1.3 Accounting Principles and Policies Updated for intangible

assets, clarification of capitalized capital asset costs; updated for effect of GASB 45 and GASB 54

1.1.4.2 Description of Fund Code Categories and Capital Asset and Long-Term Liability Accounts

Updated fund definitions based on GASB 54

1.1.10 Hierarchy of GAAP for State and Local Governments

Updated for GASB 55; TX effect of GASB 45

1.1.11 GASB Statement Summaries Added GASB 53 to 56

to table

1.1.12 Change in Fiscal Year Minor edits

1.2.4.2 Basis of Capital Assets Clarification of

capitalization policy; added link to decision tree diagram

1.2.4.10 Intangible Assets Added section on

GASB 51

1.2.5.2 Payroll Liabilities Added update on IRS

409A regulations on deferred compensation; GASB 45; Medicare Part D; and GASB 47 on termination benefits

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Section No. Topic Description of change(s)

1.2.5.7 Contractor Withholding Added section on IRS

contractor withholding delayed implementation and link to IRS website

1.2.6.2 Types of Debt Instruments Updated FASB

references to FASB Codification in section regarding leases

1.2.6.3 Debt Refundings Updated terminology

1.2.8 Subsequent Events Updated terminology

1.2.9 Fund Equity Added pre-GASB 54

and post-GASB 54 guidance

1.2.9.1 Fund Equity – Pre-GASB 54 (Fiscal years ending in 2010 and Earlier)

Added links to GFOA recommended fund balance

1.2.9.2 Fund Equity – Post-GASB 54 (Fiscal years ending in 2010 and Earlier)

Added links to GFOA recommended fund balance and post-GASB 54 guidance

1.2.9.3 Financial Statement Presentation and Disclosure Added post-GASB 54 guidance

1.2.10.1 Accounting for Foundation School Program Revenues

Updated for 81st Legislature changes to FSP

1.2.11.2 Expenses and Expenditures Updated guidance on

FASB concept statement 5 1.3.1.1 General Description of Shared Services

Arrangements

Clarification on purchasing coops 1.3.1.4 Administrative Guidelines and Considerations Information on pending

change for RDSD PEIMS reporting 1.3.1.5 Determination of Accounting and Reporting

Treatment

Added clarification that a SSA can have more than one model in one SSA

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1.3.1.6 Accounting and Reporting Treatment Guidance Added sample notes to financial statements 1.3.3 On-Behalf Teacher Retirement System

Payments

Update on GASB 45 and Medicare Part D

1.4.2 Fund Codes Added ARRA Stimulus

fund codes; clarified all SSA fund codes are used by fiscal agent only; phase-out of fund 428 for high school allotment

1.4.6 Fund Balances/Net Asset Codes Updated for GASB 54

definitions and terms

1.4.8 Revenue Object Codes Changes to various

account descriptions— see details in following tables

1.4.9 Expenditure/Expense Object Codes Changes to various

account descriptions— see details in following tables

1.4.15.4 Compliance Monitoring – Program Intent Codes Modified PIC 25 & 30; added PIC 31

1.5.1.1 Control Environment Minor edits

1.5.1.2 Risk Assessment Minor edits

1.5.1.3 Control Activities Minor edits

1.6.1 Indirect Cost Rates Minor edits

1.6.1.1 Purpose of Indirect Cost Rates Minor edits

1.6.1.3 Calculation of Indirect Cost Rates Added lobbying costs

to calculation

1.6.1.4 Indirect Costs on TEA State-Funded Grants Noted availability of indirect costs on TEA state-funded grants and provided link to letter

1.6.4.3 Cost Allocation Methodology Added phrase that

related employee costs should follow the

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employee’s salary allocation

1.7.2 Financial Reporting and Data Submission Updated information on filing Single Audit report and bond reporting 1.7.6.1 Governmental Fund Financial Statements Updated FASB

references to FASB Codification

1.7.6.2 Proprietary Fund Financial Statements Updated FASB

references to FASB Codification

1.8 Federal/State Administrative Requirements and Cost Principles

Updated for most recent compliance supplement

1.8.1.1 Allowable Cost Principles Added 2 CFR Part 225

reference to OMB A-87; updated for

changes; updated FASB references to FASB Codification; updated for current travel rates 1.8.1.3 Standards for Financial Management Systems Added CFR reference 1.8.1.4 Special Grant Conditions for “High-risk”

Grantees

Added CFR reference

1.8.2.4 Depository Transactions Added information on

pooled collateral to begin in 2010

1.8.2.7 State Program Indirect Cost Rates Updated for changes

from 85/15 and 90/10 to 55/45 and 60/40

Miscellaneous Changes in FAR Appendix - Update 14

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Appendix 1 GASB Statement No. 53 – Accounting and Financial Reporting for Derivative Instruments

Added summary of new statement

Appendix 1 GASB Statement No. 54 – Fund Balance Reporting and Governmental Fund Type Definitions

Appendix 1 GASB Statement No. 55 – The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments

Appendix 1 GASB Statement No. 56 – Codification of Accounting and Financial Reporting Guidance Contained in the AICPA Statements on

Auditing Standards

Appendix 3 Fund Balance and Cash Flow Worksheet Modified for recent GFOA

recommendations Appendix 4 Teacher Retirement System Forms Updated list of forms

Appendix 5 Account Code Listings See separate grids

under FAR and following this grid for details

Appendix 6 Account Code Matrices and Accounting Spreadsheets

Updated for changes in codes

Appendix 7 Example Accounting Entries Deleted sample entries

for old fund code 418; added sample e-rate entry

Appendix 8 Other Federal Regulations Updated for March

2009 Compliance Supplement; OMB A-87

Appendix 8 General Requirements for All Federal Programs Updated for March 2009 Compliance Supplement; OMB A-87, 21, and 122 Appendix 8

Matrix of Compliance Requirements Updated for March 2009 Compliance Supplement

Appendix 8 _{Agency Program Requirements} Updated for March

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Supplement (deleted Bilingual 84.288) Appendix 8

Clusters of Programs Updated for March

2009 Compliance Supplement Appendix 8

Internal Control Updated for March

2009 Compliance Supplement Appendix 8

Guidance for Auditing Programs Not Included Updated for March 2009 Compliance Supplement Appendix 8

General/Special Revenue Updated for March

2009 Compliance Supplement; updates from TX Dept of Ag

Fund Codes - Update 14

Changes to Fund Codes in Section 1.4.2 - Update 14

Fund Codes Description of change(s)

206 – ESEA Title X, Part C Education for the Homeless Children and Youth

Updated title

211 – ESEA Title I, Part A – Improving Basic Programs Updated description 266 – ARRA of 2009, Title XIV, State Fiscal Stabilization

Fund

New fund code effective fiscal year 2008/09 279 – Title II, Part D, Subpart 1 – Enhancing Education

Through Technology - ARRA (Stimulus)

New fund code effective fiscal year 2008/09 280 – ESEA, Title X, Part C Education for the Homeless

Children and Youth - ARRA (Stimulus)

New fund code effective fiscal year 2008/09 283 – IDEA - Part B, Formula -- ARRA (Stimulus) New fund code effective

fiscal year 2008/09 284 – IDEA - Part B, Preschool -- ARRA (Stimulus) New fund code effective

fiscal year 2008/09 285 – ESEA, Title I, Part A – Improving Basic Programs

-- ARRA (Stimulus)

New fund code effective fiscal year 2008/09

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286 – Title I SIP Academy Grant -- ARRA (Stimulus) New fund code effective fiscal year 2008/09 295 – Shared Services Arrangements - ESEA Title X, Part

C Education for the Homeless Children and Youth

Updated title

300 – Shared Services Arrangements - ESEA Title I, Part A – Improving Basic Programs

Updated description

359 – Shared Services Arrangements - ESEA, Title I, Part A – Improving Basic Programs -- ARRA (Stimulus)

New fund code effective fiscal year 2008/09 360 – Shared Services Arrangements - Title I SIP

Academy Grant -- ARRA (Stimulus)

New fund code effective fiscal year 2008/09 361 – Shared Services Arrangements - Title II, Part D,

Subpart 1 – Enhancing Education Through Technology - ARRA (Stimulus)

364 – Shared Services Arrangements - IDEA - Part B, Formula -- ARRA (Stimulus)

New fund code effective fiscal year 2008/09 365 – Shared Services Arrangements - IDEA - Part B,

Preschool -- ARRA (Stimulus)

New fund code effective fiscal year 2008/09 366 – Shared Services Arrangements - ARRA of 2009,

Title XIV, State Fiscal Stabilization Fund

New fund code effective fiscal year 2008/09 367 – Shared Services Arrangements - ESEA, Title X,

Part C Education for the Homeless Children and Youth - ARRA (Stimulus)

428 – High School Allotment Updated for phaseout to fund

199 with PIC 31

Function Codes - Update 14

Changes to Function Codes in Section 1.4.3 - Update 14

Function Codes Description of change(s)

41 – General Administration Include cost of monitors or

conservators or management teams

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Object Codes - Update 14

Changes to Object Code Section 1.4.4 - Update 14

Object Codes Description of change(s)

1530 – Furniture and Equipment Eliminated reference to

locally defined criteria 3410 – Reserve for Investment in

Inventories/Nonspendable Inventories

Updated for GASB 54 definitions and terms 3415 – Nonspendable Long-Term Loans/Notes

Receivables

Updated for GASB 54 definitions and terms; effective fiscal year 2010/11 3420 – Reserve for Retirement of Long-Term Debt Delete effective fiscal year

2010/11; replace with account 3480

3425 – Nonspendable Endowment Principal Updated for GASB 54

definitions and terms; effective fiscal year 2010/11 3430 – Reserve for Prepaid Items/Nonspendable Prepaid

Items

Updated for GASB 54 definitions and terms 3440 – Reserve for Outstanding Encumbrances Updated for GASB 54

definitions and terms; delete effective fiscal year 2010/11

3445 – Nonspendable Other Updated for GASB 54

definitions and terms; effective fiscal year 2010/11 3450 – Reserve for Food Service/Restricted for

Federal/State Funds Grant Restrictions

Updated for GASB 54 definitions and terms 3460 – Reserve/Restricted for Fund Balances of

Consolidated School Districts

Updated for GASB 54 definitions and terms 3470 – Reserve/Restricted for Capital Acquisitions and

Contractual Obligations

Updated for GASB 54 definitions and terms 3480 -- Restricted for Retirement of Long-Term Debt Updated for GASB 54

definitions and terms; effective fiscal year 2010/11

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3490 – Other Reserves/Restrictions of Fund Balance Updated for GASB 54 definitions and terms 3510 – Designated/Committed Fund Balance -

Construction

Updated for GASB 54 definitions and terms 3520 – Designated/Committed Fund Balance – Claims

and Judgments

Updated for GASB 54 definitions and terms 3525 – Committed Fund Balance – Retirement of

Loans/Notes Payable

Updated for GASB 54 definitions and terms; effective fiscal year 2010/11 3530 – Designated/Committed Fund Balance – Capital

Expenditures for Equipment

Updated for GASB 54 definitions and terms 3540 – Designated/Committed Fund Balance – Self

Insurance

Updated for GASB 54 definitions and terms

3545 – Other Committed Fund Balance Updated for GASB 54

definitions and terms; effective fiscal year 2010/11 3550 – Assigned Fund Balance - Construction Updated for GASB 54

definitions and terms; effective fiscal year 2010/11 3560 – Assigned Fund Balance – Claims and Judgments Updated for GASB 54

definitions and terms; effective fiscal year 2010/11 3565 -- Assigned Fund Balance – Retirement of

Loans/Notes Payable

Updated for GASB 54 definitions and terms; effective fiscal year 2010/11 3570 – Assigned Fund Balance – Capital Expenditures for

Equipment

Updated for GASB 54 definitions and terms; effective fiscal year 2010/11 3580 -- Assigned Fund Balance – Self-Insurance Updated for GASB 54

definitions and terms; effective fiscal year 2010/11 3590 – Other Designated/Assigned Fund Balance Updated for GASB 54

definitions and terms 3600 – Unreserved, Undesignated/Unassigned Fund

Balance

Updated for GASB 54 definitions and terms 5749 – Other Revenues from Local Sources Updated for inclusion of

application fees for tax limitation agreements

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5831 – Teacher Retirement/TRS Care – On-behalf Payments

Updated for inclusion of Medicare Part D from TRS 5931 – School Health and Related Services (SHARS) Updated 5931 for note

regarding SHARS adjustment

6144 – Teacher Retirement/TRS Care – On-behalf Payments

Updated for inclusion of Medicare Part D from TRS

6219 – Professional Services Noted that this excludes any

amounts to be capitalized

6291 – Consulting Services Clarification on definition of

consulting

6399 – General Supplies Clarify exclude locally

defined capital items < $5000

6639 – Furniture, Equipment and Software Clarify exclude locally defined capital items < $5000

Program Intent Codes - Update 14

Changes to Program Intent Codes in Section 1.4.15 - Update 14

Program Intent Codes Description of change(s)

25 – Bilingual Education and Special Language Programs Clarify items included; clarify full salary is excluded—only stipends 30 – Title I, Part A Schoolwide Activities Related to State

Compensatory Education (SCE) and Other Costs on Campuses with 40% or more Educationally

Disadvantaged Students

Updated PIC 30 for Title I information

31 – High School Allotment Added effective fiscal year

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Module 2 - Budgeting

Miscellaneous Changes in Budgeting Module - Update 14

change(s)

2.5.1 Service Efforts and Accomplishments Indicators Added GASB issued Statement No.5 to assist users in assessing accountability

2.6.1 Statement of Texas Law Clarified that budget

must be prepared by 8/20 to be adopted 8/31 (6/19 for 6/30)

2.6.1 Statement of Texas Law Updated to reflect that

district can adopt the tax rate first

2.6.1 Statement of Texas Law Added requirement to

post adopted budget to district’s internet site for 3 years per HB3

2.6.2 TEA Legal Requirements Clarified that budget

must be prepared by 8/20 to be adopted 8/31 (6/19 for 6/30)

2.7.2.2 Preparation of the Budget Calendar Clarified that budget must be prepared by 8/20 to be adopted 8/31 (6/19 for 6/30)

2.8.1 Foundation School Program Revenue Updated to reflect most

recent rates

2.8.1.1 Basic Allotment Changes made to

reflect HB 3646 changes to Tier I (Virtual School Network and High School Allotment)

2.8.1.2 Tier II, Enrichment Update for most recent

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2.8.1.3 State Assistance for Existing Debt Update to indicate that it’s ongoing

2.8.1.5 State Assistance for New Instructional Facilities Split into separate category from previous 2.8.1.4; information did not change

2.10.2 Change In Fiscal Year Minor edit

2.10.5 Reporting to TEA Added requirement to

combine SFSF funds in Fund 266 to general fund for PEIMS budgeting purposes

2.10.6 Amending the Budget Added clarification that

amendments must be made by last day of fiscal year

2.11.1.3 Expenditure Projections Added change in

reporting on electric consumption

Appendix 4 Truth-in-Taxation Guidelines Updated to agree to

Comptroller’s publication

Module 3 – Purchasing

Miscellaneous Changes in Purchasing Module - Update 14

change(s)

3.1.1 Purchasing Policy Deleted reference to

documentation of quotes for purchases between $10,000 and

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$25,000

3.2.3 Competitive Procurement Options Changed threshold for

competitive procurement from $25,000 to $50,000

3.2.3.4 Interlocal Contract Updated reference to

TEC 44.0331 from HB 273 80th L regarding reporting interlocal fees

3.2.3.6 Sole Source Additional reference

from TEC 44.031(j)

3.2.3.7 Price Quotes Repeal of TEC 44.033

regarding price quotes for personal property $10,000 - $25,000

3.2.3.9 Junior College Purchases Added exemption for

library goods and services provided by HB 962

3.2.5.1 Approval of Requisitions Minor edit

3.2.5.3 Flow of Requisitions Minor edit

3.3.1 User Interface Deleted reference to

quotes

3.3.2 Purchasing Functions and Roles Minor edit

3.3.3.1 Centralized vs. Decentralized Purchasing Added this sub-heading under 3.3.3

Maximizing Efficiency

3.3.3.2 Purchasing card (P-card) benefits Added paragraph on

benefits

3.3.3.3 Purchasing card (P-card) controls Added information on

controls

3.3.6 Electronic Bids or Proposals Added specific mention

that receipt of electronic bids/proposals is allowable per HB 987

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3.5.4 Fee Disclosure Minor edit

3.6 Purchasing Policy Manual-Model Content Deleted reference to quotes; changed threshold for local policy to $50,000 3.7.4 Purchasing Under Texas Education Code Changed threshold for

local policy to $50,000

3.7.6 Competitive Proposals Defined Added reference to

TEC 45.206

3.7.7 Competitive Quotations Defined Repeal of TEC 44.033

regarding price quotes for personal property $10,000 - $25,000

3.7.10 TEC District Purchasing Limits Change threshold from

$25,000 to $50,000 as appropriate

3.7.12 Models for Competitive Procurement Price quotes model

changed to voluntary only for < $50,000

3.7.14 Q&A – Personal Property Added subheadings for

broad categories

3.7.14 Q&A – Personal Property Change threshold from

3.7.15 Q&A – Services Change threshold from

3.7.16 Q&A – Construction/Real Property Change threshold from $25,000 to $50,000 as appropriate

3.7.17 Competitive Procurement Categories Added produce and fuel

as categories

3.7.18 Competitive Bidding Change threshold from

3.7.22 Design/Build Contracts Minor edit

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Section No. Topic Description of change(s) requirement for purchases between $10,000 and $25,000; added paragraph on local optional use of quotes

3.7.25 Summary of Other State Bidder Preference Laws

Update for transition to Comptroller from TBPC in previous session.

3.8.1.1 TEC Chapter 44, Fiscal Management Amendment to TEC

44.031 by HB 987, 81st L

44.0311 by HB 962, 81st L

44.0312 by HB 4102, 81st L

3.8.1.1 TEC Chapter 44, Fiscal Management Add new TEC 44.0313

by HB 987, 81st L, regarding electronic bids/proposals

3.8.1.1 TEC Chapter 44, Fiscal Management Repeal of TEC 44.033

by HB 987, 81st L, regarding purchases of personal property between $10,000 and $25,000

44.901 & 44.902 by SB 300, 81st L, regarding energy conservation

3.8.1.1 TEC Chapter 44, Fiscal Management Add new TEC 44.908

by HB 3646, 81st L, regarding expenditure of local funds

3.8.1.2 TEC Chapter 130 Junior College Districts Amend TEC 130.0101 regarding acquisition of

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library materials 3.8.2.1 Local Gov’t Code 176, Disclosure of Certain

Relationships

Amend Local Govt Code 176.006 by SB 1969, 81st L

3.8.2.2 Local Gov’t Code 271 – Purchasing and Contracting Authority of Municipalities,

Counties and Certain Other Local Governments

Amend Local Govt Code 271.024 by HB 987, 81st L

Amend Local Govt Code 271.083 by HB 1705, 81st L

Add links to 271.101 & 271.102 regarding cooperative purchasing 3.8.2.5 Local Gov’t Code 271 – Adjudication of Claims

Arising under Written Contracts with Local Governmental Entities

Add section on 271.159 regarding adjudication of claims & repeal of exemption of attorney fees

3.8.7 Business & Commerce Code Update Titles 4 through

15 and 99 to reflect numbering and re-organization

3.9 Attorney General Opinions Updated for changes

since last resource guide

Module 4 – Auditing

Miscellaneous Changes in Auditing Module - Update 14

change(s)

4.2 State and Federal Requirements Relating to Texas School Districts

Move information on GASB 45 and OPEB to section 4.8.12

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4.5.1 General Standards Update language

according to

Amendment to SAS No. 105

4.5.1.1. GAGAS Qualifications Update information on

auditor’s licensing requirements

4.5.2 Fieldwork Standards Update for SAS No.

105and SAS No. 108

4.5.3 Reporting Standards Update for SAS No.

113 and SAS No. 115, Internal Control 4.6.2.1. Communicate with the District Concerning

Engagement Details and Auditor/District Responsibilities

Update for SAS No. 108

4.6.2.3 Verify Auditor’s Independence and Identify the Auditor’s Role as Principal Auditor, Component Unit Auditor or Joint Auditor

Update for SAS No. 115

4.6.2.4 Consider the Internal Audit Function, If Applicable

Minor edits.

4.6.2.6 Obtain an Understanding of School District Operations

Minor edits.

4.6.2.7 Review Related Parties and Transactions Update FASB

Statement references to FASB codification 4.6.3 Obtaining an Understanding of Internal Control Updated for SAS 109,

110 reference

4.6.3.2 Risk Assessment Minor edits.

4.6.3.6 Documentation of Understanding of the Internal Control

Minor edits.

4.6.3.7 Indentifying and Testing Internal Controls Minor edits.

4.6.3.8 IT internal Controls Add this section for IT

internal controls

4.6.5 Compliance with Laws and Regulations Update FSP amounts

from 85%/90% to 55%/60%; threshold for

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competitive procurement from $25,000 to $50,000 4.6.6.1 Written Representations from Management Update FASB

Statement references to FASB codification 4.6.6.2 Disclosures of Related-Party Transactions Update FASB

Statement references to FASB codification

4.6.6.3 Going-Concern Considerations Update FASB

Statement references to FASB codification 4.6.6.4 Communicating with Those Charged with

Governance

Update professional standards references

4.6.6.7 Request Attorneys’ Letters Update FASB

Statement references to FASB codification

4.6.6.9 Audit Documentation Update professional

standards references

4.6.7 Management Communications Updated for SAS 115

4.7.1 Introduction to the Single Audit Minor edits

4.7.2 The Single Audit Act Compliance Supplement Minor edits 4.7.2.2 Key Concepts in Auditing Federal Financial

Assistance

Added reference to ARRA section

4.7.2.4 Materiality Minor edits

4.7.2.5 Other Planning Considerations Minor edits

4.7.3.3 Test Controls and Compliance Minor edits

4.7.3.4 General Compliance Requirements Minor edits

4.7.4.2 Major Program Specific Compliance Requirements Testing

Add Fraud Risk as part fo the testing

4.7.5 Single Audit Reporting Requirements Reformatted table

4.7.5.2 Single Audit Report on Internal Control and Compliance over Federal Financial Assistance

Update for SAS 115 information

4.7.5.3 Findings Added section on

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4.7.6 American Recovery Reinvestment Act (ARRA) Add this new section according to ARRA

4.8.7 Accounting for Self Insurance Update FASB

Statement references to FASB codification 4.8.8 Post-Employment Benefits other than Pensions Update for GASB 45

4.8.11 Accounting for Foundation School Program Issues

Minor edits

4.8.12 Pension Obligations Added information on

GASB 45 and TX optional

implementation

4.12.2 Elements of Quality Control Minor edits

4.12.3 General Considerations for a Peer Review Update general considerations

4.12.5 Qualifications for Service as a Reviewer Update qualifications for CPA peer reviewer

4.12.6 System Reviews Minor edits

4.12.6.1 Scope of the Peer Review Update scope

4.12.6.2 Exit Conference Update terminology for

reports issued

4.12.7 Other Reviews Update terminology for

other types of

reviews—n/a for school districts

4.12.8 Reporting on Peer Reviews Update terminology for

reporting

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Module 5 – Site Based Decision Making

Miscellaneous Changes in Site Based Decision Making Module - Update 14

change(s)

5.2.2 District Improvement Plans Updated language to

reflect HB 3 (academic excellence to student achievement)

5.2.3 Campus Improvement Plans Updated language to

reflect HB 3 (academic excellence to student achievement)

5.3.3 Level of Budgetary Account Coding Add reference to

requirement for budget to be posted on district web site

5.4.4 District Purchasing Options Update for changes in

threshold from $25,000 to $50,000 and

dropping quote requirement

5.4.4.3 Catalog Purchases Added reference to

other methods to participate in

interlocal/cooperative purchasing

5.4.5 Price Quotes Added repeal of price

quotes for purchases $10,000 to $25,000 5.5.1 Major Classes of Activity Fund Operations Added information

regarding required local policy for expenditure of local funds per HB 3646

5.5.4.16 Competitive Procurement Requirements Change threshold from $25,000 to $50,000 5.5.6.1 Policy Regarding Expenditure of Local Funds Added information

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policy for expenditure of local funds per HB 3646

5.5.6.2 Raffles/Drawings Added link to Attorney

General’s website regarding organizations qualified to hold

raffles/drawings (school districts are not)

5.5.6.3 Other Organizations Added section noting

that booster clubs and PTO’s are separate legal entities

Module 6 – Accountability

Miscellaneous Changes in Accountability Module - Update 14

change(s)

Sections re-numbered due to addition of Financial Solvency requirements

6.2.1 State Accountability Legal Requirements Deleted expenditure targets due to repeal by HB 3

6.3.1 School FIRST Deleted 65%

expenditure

requirement repealed by HB 3

6.3.2 Financial Solvency Added section on

addition of financial solvency review

6.3.2.1 Financial Solvency Review Process Added section

describing the information to be reviewed

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6.3.2.2 Projected Deficit Added section

describing requirements in the case of a

projected deficit

6.3.3 Financial Accountability Reporting Added sentence that

financial management report must describe data submitted for financial solvency review

6.3.4 Accreditation System for School Districts Renumbered TEC sections as result of HB 3 and noted system was updated

6.3.4.1 Accreditation Interventions and Sanctions for Districts

Updated language and renumbered TEC sections as a result of HB 3

6.3.4.2 Annual Review Updated language and

renumbered TEC sections as a result of HB 3

6.3.4.3 Acquisition of Professional Services Updated language and renumbered TEC sections as a result of HB 3

6.3.4.4 Costs Paid by District Renumbered TEC

sections as result of HB 3

6.3.4.5 Conservator or Management Team Renumbered TEC

6.3.4.6 Board of Managers Renumbered TEC

6.3.5.3 Spending Targets Noted that expenditure

targets were repealed by HB 3 effective immediately

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6.6.6 Comptroller’s Office Uses Added description of

TEC 39.0821 which requires Comptroller to review school district resource allocation

Module 7 – Data Collection and Reporting

Miscellaneous Changes in Data Collection and Reporting Module - Update 14

change(s)

7.1 Introduction to Data Collection and Reporting Added link to TEA page detailing reporting requirements as

required by HB 3041

7.3 Collection and Reporting Replaced reference to

Bulletin 742 with TEA web link

7.3.2.1 Budget Data Added explanation for

effect of ARRA funds on budget submission

7.3.3.1 Budget Data Added explanation for

date of collection for June 30 fiscal year-end

7.3.3.2 Actual Financial Data Added explanation for

date of collection for June 30 fiscal year-end

7.3.6.2 Noncompliance Correct TEC reference

7.3.9 Other District Reports Added link to TEA

page detailing reporting requirements as

required by HB 3041; replaced reference to Bulletin 742 with TEA web link

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7.3.10 Electricity, Water, and Natural Gas Consumption

Update reference to TEC from bill number for electronic reporting of utility consumption

7.4.1 Legal Requirements Deleted reference to

The Local Record published occasionally by TX State Library

7.4.2 Useful Publications Deleted reference to

The Local Record published occasionally by TX State Library

Module 8 – Management

Miscellaneous Changes in Management Module - Update 14

change(s)

8.1.3 Improvement Opportunities Updated LBB best

practice categories

8.4.2 Texas School Performance Review Updated LBB best

practice categories

8.5.1.5 Module: Purchasing Edited for change in

procurement threshold from $25,000 to $50,000

8.5.1.10 Module: Transportation Updated for change in

bus evacuation training from mandatory to recommended and to review prior to field trips

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Module 9 – State Compensatory Education

Miscellaneous Changes in State Compensatory Education Module - Update 14

change(s)

9.1.1 History of Texas State Compensatory Education Updated definition of at-risk; changed indirect cost rate from 15% to 45%; added military dependent factor

9.1.2 Threshold of Filing Requirements Changed threshold for

electronic filing from $150,000 to $500,000

9.2.3 District/Campus Improvement Plans Restated importance of

evaluating

implementation and outcomes

9.2.3.1 State Criteria for Identification of Students At Risk of Dropping Out of School

Updated criteria (dropped pre-k & kindergarten held back at parents’ request); added information on dyslexia

9.2.3.2 Local Criteria for Identification of Students At Risk of Dropping Out of School

Restated documentation requirements

9.2.4 Funding of Compensatory Education Programs under the Foundation School Program

Changed indirect cost rate from 15% to 45%

9.2.4.1 Supplement/Not Supplant Changed indirect cost

rate from 15% to 45%; added information on requirements for mentoring program; requirements for class size

9.2.6 State Compensatory Education Programs and Resources

Information on training and requirements for documenting all program costs

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9.2.14.2 Considerations Related to Schoolwide Programs Operated under ESEA, as amended, Title I A

Added additional hyperlinks to resources 9.2.14.3 Supplement, Not Supplant and Comparability Added additional

hyperlinks to resources

9.3.2.1 District/Campus Improvement Plan Clarified requirements

of plan 9.4 Risk Assessment Processes and Identification of

Schools Requiring a Local Audit

Updated factors for new indirect cost percent and future School FIRST for charter schools

9.4.1 Role of the Independent Auditor Added information

regarding use of FTE staff document to tie DIP/CIP expenses

(29)

Prior Changes Under Update 2

Financial Accounting and Reporting

Fund Codes - Update 2

204 - SEA Title IV - Safe and Drug-Free Schools corrected CFDA#

211 - ESEA Title I, Part A - Improving Basic Programs added to definition and corrected CFDA#

214 - ESEA Title I, Part A - Capital Expenses corrected CFDA# 215 - ESEA Title I, Part D - Prevention and Intervention Programs

for Children and Youth who are Neglected, Delinquent, or at Risk of Dropping Out

added to title and corrected CFDA#

222 - National & Community Service Trust Act corrected spelling and CFDA# 223 - Family Support Act flagged for replacement:

Temporary Assistance for Needy Families (TANF)

235 - ESEA Title VI - Innovative Education Program Strategies corrected roman numeral 253 - IDEA Title II, Part H (Deaf) new fund code -

254 - ESEA Title III, Part A, Subpart 2, Technology Literacy Challenge Fund

new fund code

300 - SSA- ESEA Title I Part A - Improving Basic Programs added to definition and corrected CFDA#

303 - SSA ESEA Title I, Part A - Capital Expenses corrected CFDA# 304 - SSA ESEA Title I Part D - Prevention and Intervention

Programs for Children and Youth who are Neglected, Delinquent, or at Risk of Dropping Out

added to title and corrected CFDA number

311- SSA National Community and Services Trust Act - Learn and Serve America

corrected spelling and CFDA number

312 -SSA- Family Support Act flagged for replacement:

Fund Codes Continued Description of change(s)

(30)

Strategies

340 - SSA- IDEA Title II, Part H, (Deaf) new fund code 341 - SSA- ESEA Title III, Part A, Subpart 2, Technology Literacy

Challenge Fund

new fund code

382 -Family Support Act (TEC 29.251) flagged for replacement:

384 - Opportunities and Basic Skills Prg. (AFDC) flagged for deletion 401 - Retention Reduction Grant (State-Funded Optional Extended

Year Program

flagged for title change 402 - State Special Education (ESCs only) flagged for deletion- 404 - Partnership Schools Initiative Support (ESCs only) flagged for deletion- 409 - Results-Based Monitoring Training (ESCs only) flagged for deletion 413 - Telecommunication Infrastructure Fund New fund code - 414 - Texas Reading Initiative New fund code

432 - SSA Family Support Act (TEC 29.251) flagged for replacement: Temporary Assistance for Needy Families (TANF)

439 - SSA- Texas Reading Initiative new fund code

Function Codes - Update 2

97 - Payments to Tax Increment Fund new code, added include/exclude table

Object Codes - Update 2

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1910 - Long-Term Investments added to definition 2121 - Bonds Payable- Current Year added to definition 2130 - Capital Leases Payable - Current Year added to definition 2140 - Interest Payable added to definition 2152 - Fica Taxes flagged for title change 2310 - Deferred Revenue added include/exclude table 3470 - Reserve for Capital Acquisition Program flagged for title change 3700 - Budgetary Fund Balance - Locally Defined new code

5010 - Estimated Revenues - Control - Locally Defined updated for 3700

5711 - Taxes, Current Year Levy added include/exclude table 5712 - Taxes, Prior Years added include/exclude table 5719 - Penalties, Interest and Other Revenues added include/exclude table 5721 - Local Revenues from Sale of WADA to Other School Districts added include/exclude table 5722 - SSA- Local Revenues from Member Districts added include/exclude table 5723 - SSA- Local Revenues from Fiscal Agent added include/exclude table 5729 - Local Revenues Resulting from Services Rendered to Other

School Districts

added include/exclude table 5739 - Tuition and Fees added include/exclude table 5741 - Earnings from Permanent Funds and Endowments added include/exclude table 5742 - Earnings from Temporary Deposits and Investments added include/exclude table 5743 - Rent added include/exclude table 5744 - Gifts and Bequests flagged for name change; added

include/exclude table 5745 - Insurance Recovery added include/exclude table 5746 - Tax Increment Fund new code, added include/exclude

table

5749 - Other Revenues from Local Sources added include/exclude table 5751 - Food Service Activity added include/exclude table 5752 - Athletic Activities added include/exclude table 5753 - Extracurricular/Cocurricular Activities added include/exclude table 5754 - Quasi-External Interfund Transactions added include/exclude table 5755 - Results from Enterprising Services, Activity Funds and/or

Clearing Accounts

flagged for title change 5761 - Revenues from Successor-In-Interest to Former CED added include/exclude table 5769 - Miscellaneous Revenues from Intermediate Sources added include/exclude table 5811 - Per Capita Apportionment added include/exclude table 5812 - Foundation School Program Act Entitlements added include/exclude table

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5813 - Foundation School Program Act Incentive Aid change in description 5829 - State Program Revenue Distributed. by TEA added include/exclude table 5839 - State Revenue from State of Texas Government Agencies

(Other Than TEA)

added include/exclude table 5841 - SSA-State Revenues from Member Districts added include/exclude table 5842 - SSA - State Revenues from Fiscal Agent added include/exclude table 5922 - National School Lunch Program added include/exclude table 5932 - Medicaid Administrative Claiming Program (MAC) added new code

6010 - Appropriated Expenditures/Expenses - Control - Locally Defined

updated for 3700 6117 - 6118 Salaries or Wages for Teachers and Other Professional

Personnel - Locally Defined

added one more code to be locally defined

6119 - Salaries or Wages-Teachers and Other Professional Personnel added to definition 6129 - Salaries or Wages for Support Personnel added to definition

6139 - Employee Allowances added include/exclude table 6249 - Contracted Maintenance and Repair added include/exclude table 6329 - Reading Materials added to definition for clarification 6399 - General Supplies added to definition for

clarification; added include/exclude table

6639 - Furniture Equipment added include/exclude table; title change

6659 - Capital Lease of Furniture and Equipment flagged for title change; added include/exclude table

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Miscellaneous Changes - Update 2

Section No. Topic Description of change(s)

1.2.7. Risk Financing and Related Insurance Issues added reference to GASB 30 Table with GASB Statements added GASB 30 & 31 1.3.2.1 Exhibit 26- Food Service Operation Fund Chart added Yes/No's 1.3.3.1 Overview of Teacher Retirement Contributions and

Payment

added reference to TRS payroll reporting procedures manual

1.3.3.2 On-Behalf Payment Calculation and Accounting Methodology

added reference to TRS payroll reporting procedures manual/minor edits

Exhibit 28 minor correction 6145 to 6144

1.4.13 Organization Codes major deletion and additions 1.4.13.1 Campus Accounting/Coding minor addition to definition

751 - Fiscal Agent Shared Services Arrangements made a required code for PEIMS reporting 998 - Unallocated Organization Unit made a required code for

PEIMS reporting 1.4.13.2 Compliance Monitoring addition to definition 1.4.14 Fiscal Year Code added to definition for

clarification 1.4.15.1 Program Intent Codes major deletion

22 - Career and Technical added to include/exclude table

24 - Accelerated Education added to include/exclude table

99 - Undistributed change definition 1.4.15.4 Compliance Monitoring addition to definition 1.5 Internal Control changes to entire section

-Internal Control -Control Environment -Accounting System -Control Activities -Monitoring Activities

-Information and Communication

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reference of Exhibit D-4 to C-4

1.6.4.4 Administrative Costs deleted last three paragraphs in section

1.7.2 Financial Reporting and Data Submission added addresses/instructions for mailing of financial report(s)

1.8.2.2 Nepotism added substitute teacher as a general exception

1.8.2.3 Pecuniary Interest added reference to LGC 171.002 - substantial interest 1.8.2.4 Depository Transactions added to section details of

high-risk mortgage security 1.8.2.8 Records Retention changed three years to five

Changes to Appendix 1-7 - Update 2

Changes to Appendix 1-7 - Update 2

Section No. Topic Description of

change(s)

Appendix 1 Summaries of GASB Statements 1 thru 31 added detail #30 and #31 Appendix 2 Texas Laws Applicable to Cash and Investments

Chapter 2256, Subchapter A and B added 11 sections to have a complete Ch. 2256 updated for

Appendix 7 Accounting for Federal Grants

A. #1 journal entry changed $98,000 to $102,000, moved $2,000 to credit side

C. #1 journal entry changed $26,000 to $26,520, add $520 to debit side Accounting for Gifts and Bequests

Ills. #4 -Expendable trust fund entry changed fund 839 to 819- all expendable trust funds should use numbers 801- 829 Ills. #5 - Non-expendable trust fund entry changed fund 819 to 839 - all

non-expendable trust funds should use numbers 831-849

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Market Changes in Investments

Ills. 1 & 2 added example accounting entries

Appendix 8 Other Federal Regulations

Introduction major changes added example table Bilingual Education minor edits with some

additions

ESEA - Title I, Part A major changes/additions A-133

Migrant Education major changes ESEA - Title VI (84.298) minor edits with some

additions

Vocational Education -Basic Grants minor edits/additions Adult Education minor edits

ESEA - Title I, Part D- At Risk major additions ESEA - Title I, Part A, Capital Expense major additions

ESEA - Title I, Part A- additional assistance... no changes; funding ends 9/30/97

ESEA - Title III, Subtitle B, Homeless Children minor edits

Learn and Serve America no changes per Rob Scott Eisenhower, Title II, Part B minor edits with some

additions

Safe and Drug Free, Title IV edits for clarification ESEA, Title VII, Part C - Emergency Immigrant

Education

minor edits with some additions

IDEA B - Formula and Preschool Programs entire section added IDEA B -Formula and Preschool Programs (SPED) added section Head Start deleted section Energy Conservation for Institutional Buildings deleted section Job Training Partnership Act (Dept. of Labor) deleted section State Legalization Impact Assistance Grant deleted section

Part 1 - General Requirements for All Federal Programs major changes to reflect

OMB Circular A-133 (A- N)

Part 3- General/Special Revenue/Enterprise Funds

Federally-Funded

Child Nutrition Programs minor edits/additions throughout section Additional Guidance Related to Child Nutrition Program additions for clarification,

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CFDA Listing updates to entire section for new numbers and title changes

Purchasing - Update 2

Models for Competitive Procurement Process - Update 2

Models for Competitive Procurement Process - Update 2

Title Description of

Change(s)

Model Competitive Bidding Process for Construction Contracts added model Model Competitive Sealed Proposal Process for Construction

Contracts

added model

Model Construction Manager-Agent Process for Construction Contracts

added model

Model Construction Manager-At-Risk Process for Construction Contracts

added model

Model Design/Build Process for Construction Contracts added model Model Job Order Contract for Facilities Repair Process added model

Q and A - Additions, Edits and Revisions - Update 2

Appendix 1 - Q and A - Additions, Edits and Revisions - Update 2

Q & A - Personal Property

# 1, 34, 48, 49, 64, 66, 92, 99, 104-108

Q & A - Services

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Q & A - Construction/Real Property

# 4(a,b), 5, 9, 10, 15, 16, 17, 18, 20, 26, 31, 33, 36, 37, 38 - 47

Laws - Update 2

Bidder Preference Law and Texas Education Code - Update 2

Texas Education Code and Bidder Preference Laws - Update 2

Section Description of

Change(s)

Texas Education Code:

44.031. - Purchasing Contracts revised section, SB-583

44.0315 - Definitions added section, SB-583 44.035 - Competitive Sealed Proposals for Construction Services added section, SB-583 44.036 - Design-Build Contracts for Facilities added section, SB-583 44.037 - Contracts for Facilities: Construction Manager-Agent added section, SB-583 44.038 - Contracts for Facilities: Construction Manager-At-Risk added section, SB-583 44.039 - Selecting Contractor for Construction Services Through Competitive

Sealed Proposals

added section, SB-583 44.040 - Selecting Contractor for Construction Services Through Competitive

Bidding

added section, SB-583 44.041 - Job Order Contracts for Facilities Repair added section, SB-583 44.901 - Energy Management Systems edited section,

HB-3530

45.105 - Lease Purchase of School Buildings and Sites deleted section 45.205 - Term of Contract added (b), SB-656

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Government Code, Local Government Code, and Texas Revised

Civil Statutes - Update 2

Government and Local Government Code - Update 2

LGC 171.002. Substantial Interest in Business Entity added section LGC 271.083. Local Gov Participation added subsection (c),

SB-820

LGC 271.103. Federal Supply Schedule added section, SB-395 LGC 272.001. Notice of Sale or Exchange of Land by Political Subdivisions minor edits

Gov. Code 791.012. Law Applicable to Contracting Parties minor edits, HB-501 Gov. Code 791.025. Contracts for Purchases minor edits and added

sections b and d, SB-395

Gov. Code 2054.060. Digital Signature added section, HB-984 Gov. Code 2157.0611. Requirements to Evaluate Three Proposals When Possible added section,

SB-1752

Gov. Code 2157.066. Catalogue Requirements added section, HB-1805

Gov. Code 2175.301. Surplus Property of Legislature added section c; SB-996

Gov. Code 2251.027. Payment of Interest by Political Subdivision added sect. e; HB-2506

Gov. Code 2253.022. Performance & Payment Bond added section, HB-3158

Gov. Code 2254.002. Definitions Professional Services added to section (2), HB-1782

Gov. Code 2254.004. Contract for Professional Services of Architect , Engineer Or Surveyor

minor additions, SB-626

Architects - Art 249a Title 10a deleted sect. 14 & 15

Texas Engineering Practice Act

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Texas Attorney General Opinions - Update 2

Additions and Deletions to Texas Attorney General Opinions - Update 2

H - 602 Use of school district funds to purchase personal injury insurance protection

added entire opinion DM 387- Bid Construction Contract Over $25,000 added entire

opinion DM 418 - Purchase of Insurance - Reconsideration added entire

opinion JM 940 - Construction Management Consultant deleted opinion,

superseded by SB-583

Miscellaneous Changes - Update 2

Miscellaneous Changes to Purchasing Module - Update 2

3.2.3 Competitive Procurement Options added last two bullets

3.2.3.3 Catalogue Purchases added ...catalogue info. avail on WWW. GC §2157.006

3.2.3.4 Interlocal Contract added wording Section Gov. Code §791.012

3.5.2 Cooperative Purchasing Arrangements added nonprofit corporations

Appendix 1:

75th Legislative Session added section

Catalog Purchasing Guidelines added wording about WWW access

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Design/Build Contracts revised section

Job Order Contracts for Facilities Repair added section

Update 2

Auditing

Sections Updated for OMB Circular A-133 Compliance

Supplement - Update 2

Sections Updated for OMB Circular A-133 - Update 2

4.1 _Introduction updated for OMB A-133

4.6.2.5 _{Misrepresentation} title change; updated for

OMB A-133

4.6.8 _{Auditor’s Reports} updated for OMB A-133

4.6.8.1 _{Report on General Purpose Financial Statement} updated for OMB A-133

4.6.8.2 _{Report on Compliance and on Internal Control} updated for OMB A-133

4.7.1 _{Introduction to the Single Audit} updated for OMB A-133

4.7.2-4.7.2.5 _{Single Audit Act} updated sections for OMB

A-133

4.7.3-4.7.3.2 _{Internal Control} updated sections for OMB

A-133

4.7.3.3 and 4.7.4

General and Specific Compliance Requirements updated for OMB A-133 -Activities Allowed or Unallowed

-Allowable Costs/Cost Principles -Cash Management

-Davis-Bacon Act -Eligibility

-Equipment and Real Property Management -Matching, Level of Effort, Earmarking

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-Period of Availability of Federal Funds -Procurement and Suspension and -Debarment -Program Income

-Real Property Acquisition and Relocation Assistance -Reporting

-Subrecipient Monitoring -Special Tests and Provisions

4.7.4.1 _{Specific Compliance Requirements Testing} updated for OMB A-133

4.7.4.3 _{Non-Major Program Specific Compliance}

Requirement Testing

section deleted

4.7.5 _{Single Audit Reporting Requirements}

Exhibit 3- Summary of Reporting Requirements updated for OMB A-133 -Government Auditing Standards

-Single Audit Act (OMB A-133)

4.7.5.1 Supplementary Schedule of Federal Financial Assistance updated for OMB A-133

4.7.5.2 Single Audit Report on Internal Control and Compliance

over Federal Financial Assistance

updated for OMB A-133

4.7.5.3 Single Audit Report on Compliance with General

Requirements

section deleted See section 4.7.3.4

4.7.5.4 Single Audit Report on Compliance with Specific

Requirements Relating to Major Programs

section deleted See section 4.7.4.2

Appendix 2 Sample Engagement Letters updated for OMB A-133

Sample Audit Report - Update 2

Updates to the Sample Audit Report for OMB - A-133 - Update 2

Appendix 1 Sample Request for Proposal updated for OMB A-133

Appendix 2 Sample Engagement Letter updated for OMB A-133

Appendix 6 Sample Reports updated for OMB A-133

6-1 Unqualified Opinion on Supplementary Schedule of Federal Financial General-Purpose Financial Statements and Supplementary Schedule Of Expenditures Of Federal Awards

6-2 Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial

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Statements Performed in Accordance with Government

Auditing Standards [No Reportable Instances of Noncompliance and No Material Weaknesses No Reportable Conditions Identified)]

6-3 Report On Compliance And On Internal Control Over Financial Reporting Based On An Audit Of Financial Statements Performed In Accordance with Government

Auditing Standards [Reportable Instances of

Noncompliance and Reportable Conditions Identified]

6-4 Report on Compliance with Requirements Applicable to Each Major Program and Internal Control Over

Compliance in Accordance with OMB CIRCULAR A-133

[Unqualified Opinion on Compliance and No Material Weaknesses (No Reportable Conditions Identified)]

6-5 Report on Compliance with Requirements Applicable to Each Major Program and Internal Control Over

Compliance in Accordance with OMB Circular A-133

[Qualified Opinion on Compliance and Reportable Conditions Identified]

Footnotes to Sample Audit Reports 6-1 to 6-5

Miscellaneous Changes - Update 2

Miscellaneous Changes to Auditing Module - Update 2

4.6.2.6 _{Establish the Audit Approach and Develop an}

Audit Program

Statement on Auditing Standards No. 78

Consideration of Internal Control in a Financial Statement Audit: An Amendment to SAS No. 55

updated for SAS No. 78

4.6.3 _{Obtaining an Understanding of Internal Control} updated for SAS No. 78

4.6.3.1 _{Control Environment} updated for SAS No. 78

4.6.3.2 _{Risk Assessment} updated for SAS No. 78

4.6.3.3 _{Control Activities} updated for SAS No. 78

4.6.3.4 _{Communication and Information} updated for SAS No. 78

4.6.3.5 _Monitoring updated for SAS No. 78

4.6.3.7 _{Identifying and Testing Internal Controls} updated for SAS No. 78

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4.6.5 _{Compliance with Laws and Regulations} updated information in Exhibit 2 on competitive bidding and insurance contracts

4.6.6.3 _{Going-Concern Considerations} updated for SAS No. 77

4.8.9 _{Arbitrage Rebate Calculations} indicates change for January

1998

4.9.2 _{Audits of attendance Accounting System} edits for clarification on

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Prior Changes Under Update 3

State Compensatory Education

Version 3 of the Financial Accountability System Resource Guide has a new module,

Compensatory Education Guidelines, Financial Accounting Treatments, and an Auditing and Reporting. This new module was added to implement Senate Bill 1873,

75th Legislature, Regular Session, that amended Section 42.152, Texas Education Code, Compensatory Education Allotment. The amendment requires direct costs for state compensatory education to be supplemental to the regular program. The module also explains that the costs of alternative education programs are chargeable to the state compensatory education allotment, according to legislative intent. The reporting and auditing system, described in the module is effective September 1, 1998 on a transitional basis, meaning that there will not be a financial penalty for fiscal data reported for school year 1998-99, fiscal year 1999. The reporting and auditing system was designed with the assistance of the Texas Comptroller of Public Accounts and the State Auditor's Office, in accordance with Senate Bill 1873. Noncompliance with the new expenditure requirements for state compensatory education may result in a financial penalty against the Foundation School Program compensatory education allotment.

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Prior Changes Under Update 4

The most significant changes reflected in Update 4 to the Financial Accountability System Resource Guide are contained in the Financial Accounting and Reporting (FAR) Module. These changes are explained below. Details regarding changes in Update 4 are found in the cross reference tables at the end of this document.

Financial Accounting and Reporting Module

The Financial Accounting and Reporting (FAR) Module, Appendix 10, Annual Financial

Report, contains a new illustrative sample audit report. The illustrative report is an

example and, as such, annual financial reports submitted by districts will have minor differences in style and/or format, in some instances, particularly in the notes to the financial statements section of the annual financial report. It should be noted that the illustrative report reflects the new mandatory reporting standard of the TEA requiring the accreditation interest for Capital Acquisition Bonds (CABs) and deep discount debt. The illustrative example report also implements the American Institute of Certified

Public Accountants’ Statement of Position (SOP) 98-3, Audits of States, Local

Governments, and Not-for-Profit Organizations Receiving Federal Awards. Changes to

Exhibit D-1, Schedule of Expenditures of Federal Awards, implement SOP 98-3. The notes to the financial statements also contain changes that implement new requirements related to Year 2000 issues. Certain disclosures are required by the Governmental

Accounting Standards Board Technical Bulletin No. 98-a, “Disclosures about Year 2000 Resources Committed” and Securities and Exchange Commission 17 CFR Parts 231, 241, 271, 276 (Release Nos. 33-7558; 34-40277; IA-1738; IC-23366; International Series Release No. 1149 ) “Statement of the Commission Regarding Disclosure of Year 2000 Issues and Consequences by Public Companies, Investment Advisers, Investment Companies, and Municipal Securities Issuers.”

(Update 4) - An account code for the Telecommunications Infrastructure Fund (TIF) was added to the shared services arrangements subcategory of Fund Codes in the Financial Accounting and Reporting (FAR) Module. The new Fund Code will be effective September 1, 1999. Several minor

changes in account code sections in Update 4 reflect removal of codes that were earmarked for deletion in Update 2.

This module has also been updated under Appendix 8, Other Federal Regulations, in connection with United State Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. The changes relate to recent amendments to the OMB Circular A-133 Compliance Supplement, that were issued in June, 1998 and are effective for the annual financial report for the fiscal year ending August 31, 1998. (OMB Circular A-133 established uniform audit requirements for non-federal entities that administer Federal awards and implemented the Single Audit Act Amendments of 1996. OMB Circular A-133 was issued by the OMB in June, 1997 and was implemented in the Resource Guide under Update 2 with an effective date for the fiscal year ended August 31, 1997.)

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Prior Changes Under Update 4

Financial Accounting and Reporting

Fund Codes - Update 4

215 - ESEA Title I Part D Subpart 1- Prevention and Intervention Programs for Children and Youth who are Neglected, Delinquent, or at Risk of Dropping Out

new title effective 9/1/98 per Update 2

219 - ESEA Title VII Part A - Bilingual Education corrected CFDA number 223 - Temporary Assistance for Needy Families (TANF) new title effective 9/1/98 per

Update 2

253 - IDEA - Part C (Deaf) new fund code and title effective 9/1/98 per Update 2

254 - ESEA Title III, Part A, Subpart 2, Technology Literacy Challenge Fund

new fund code effective 9/1/98 per Update 2

304 - Shared Services Arrangement - ESEA Title I Part D Subpart 1- Prevention and Intervention Programs for Children and Youth who are Neglected, Delinquent, or at Risk of Dropping Out

308 - Shared Services Arrangement - ESEA Title VII Part A - Bilingual Education

corrected CFDA number 312 - Shared Services Arrangement - Temporary Assistance for

Needy Families (TANF)

340 - Shared Services Arrangement - IDEA - Part C (Deaf) new fund code and title effective 9/1/98 per Update 2

341 - Shared Services Arrangement - ESEA Title III, Part A, Subpart 2, Technology Literacy Challenge Fund

new fund code effective 9/1/98 per Update 2

382 - Temporary Assistance for Needy Families (TANF) - State §29.252

384 - Reserved for Future State Definition fund code deleted 9/1/98 per Update 2

401 - State-Funded Optional Extended Year Program new title effective 9/1/98 per Update 2

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Update 2

413 - Telecommunications Infrastructure Fund new fund code effective 9/1/98 per Update 2

414 - Texas Reading Initiative new fund code effective 9/1/98 per Update 2

432 - Shared Services Arrangement - Temporary Assistance for Needy Families (TANF) - State §29.252

new title effective 9/1/98 per Update 2

439 - Shared Services Arrangement - Texas Reading Initiative new fund code effective 9/1/98 per Update 2

440 - Shared Services Arrangement - Telecommunications Infrastructure Fund

new fund code; effective September 1, 1999

749 - Enterprise Funds minor change to explain that this fund is reported in PEIMS Payroll record

Function Codes - Update 4

97 - Payments to Tax Increment Fund new function code effective 9/1/98 per Update 2

Object Codes - Update 4

1200 - Receivables correction to the definition of this category

3470 - Reserve for Capital Acquisitions and Contractual Obligations new title effective 9/1/98 per Update 2

5744 - Revenue from Foundations, Other Non-Profit Organizations, Gifts and Bequests

new title effective 9/1/98 per Update 2

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per Update 2

5755 - Enterprising Services Revenue new title effective 9/1/98 per Update 2

5932 - Medicaid Administrative Claiming Program - MAC new revenue code effective 9/1/98 per Update 2

6639 - Furniture, Equipment and Software new title effective 9/1/98 per Update 2

6659 - Capital Lease of Furniture, Equipment and Software new title effective 9/1/98 per Update 2

1.4.11 - Other Uses/Non-Operating Expenses/Residual Equity Transfers Out Object Codes

correction to PEIMS reporting detail for budget purposes

Program Intent Codes - Update 4

Changes to Program Intent Codes in Section 1.4.15.4

11 - Basic Educational Services minor change per notice in Update 2

24 - Accelerated Education minor change per notice in Update 2

Miscellaneous Changes - Update 4

Section No. Topic Description of change(s)

1.2.5.2 Payroll Liabilities changed example from 183 day to 187 day contract 1.2.9.2 Unreserved Fund Balances changed title of schedule

referenced in Appendix 3 1.6.4.1 Allocation of Salaries changed example from 183

day to 187 day contract 1.8.1.1 Description of General Requirements location of web site for current out-of-state meal, lodging and median rates

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Changes to Appendices 1-10 - Update 4

Changes to Appendices 1-10 - Update 4

Section No. Topic Description of

change(s)

Appendix 1

Summaries of GASB Statements 1 thru 32 added detail #32 Appendix 3

Fund Balance and Cash Flow Worksheet changed title of schedule to agree with annual audit report title

Appendix 5

Accounting Code Listings minor changes to correspond to codes in main text in 1.4 Account Codes

Appendix 6

Function/Object Accounting Matrix minor correction under object 6213 and 6214

Appendix 7

Accounting for Debt Transactions minor correction in Illustration 4, Entry B Example Accounting Entries changed example from 183

day to 187 day contract Appendix 8

Other Federal Regulations

Introduction major changes Part 1 - General Requirements for all Federal Programs minor edits with some

additions Part 2 - Special Revenue Fund Program Requirements

B. Elementary and Secondary Act, Title I, Part A, Improving Basic Program Operated by Local Education Agencies

changes made per

Compliance Supplement 6/98 F. Adult Education (Department of Education) changes made per

Compliance Supplement 6/98 H. Elementary and Secondary Education Act (ESEA)

as amended by P.L. 103-382, Title I, Part A, Section 1120(e) Capital Expenses

changes made per