WASBO Accounting Conference

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WASBO Accounting Conference

• Funds 41 80
• Jerry Landmark, Assistant Director
• School Financial Services Team

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Capital Expansion .(where did Appreciation
come from?).Fund 41

• Im not a complete idiot some parts are just
  missing.

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Fund 41Capital Expansion Fund

• What is it?
• How is equalization aid affected by a Fund 41?
• How many districts have a Fund 41?
• Why do districts establish it?
• Why dont more districts establish one?
• What are the advantages disadvantages to Fund
  41?
• How is it different from Fund 49?
• What do I have to do to start one?

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Fund 41Capital Expansion Fund

• Authorization to establish a Capital Expansion
  Fund comes from state statute 120.10(10m)
• It sets specific procedures a district must do to
  establish the fund
• State Statute 121.90 indicates the levy is within
  the revenue limit.

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Fund 41 What is it?

• Its a fund that segregates money for capital
  projects as determined by the school board and
  approved at an annual meeting.

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Fund 41 What is it?

• State Statute 120.10(10m) Vote to create a fund
  for the purpose of financing all current and
  future capital expenditures related to buildings
  and sites. All money raised through taxation or
  otherwise collected pursuant to this subsection
  shall be deposited by the school district
  treasurer in a segregated fund. Such money shall
  not be used for any other purpose or be
  transferred to any other fund except by
  authorization by a majority vote of the electors
  present at a subsequent annual meeting and only
  if notice that the issue would be on the agenda
  was included in the notice of the subsequent
  annual meeting under s. 120.08(1)(c).

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Fund 41 What is it?

• WUFAR says Projects financed with tax levy per
  statue 120.10(10m). State statue restricts the
  use of this fund for capital expenditures related
  to buildings and sites. Equipment cannot be
  acquired through the use of this Fund.

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Fund 41 What is it?

• For the purpose of determining eligible
  expenditures from this Fund, the DPI defines
  capital expenditures related to buildings and
  sites as being expenditures for acquiring and
  remodeling buildings and sites, and maintenance
  or repair expenditures that extend or enhance the
  service life of buildings and building
  components, sites and site components.

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Fund 41 How is Aid affected?

• Aid is affected because the expenditure in Fund
  41 is amortized over the number of years the
  district has levied into the fund, per s.s.
  121.07(6)1.
• See handout

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Fund 41 How many Districts have one?

• As of 2007-08, 50 districts reported activity in
  Fund 41, including 2 new districts
• About 25 additional districts have had Fund 41
  authorization previously but did not levy this
  past year.

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Fund 41 Why do districts establish one?

• To separate capital improvement funds from
  general funds
• To minimize, or control, shared cost increases as
  the expenditures are amortized over a longer
  period.

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Fund 41 Why dont more districts establish one?

• Its within the revenue limit, which reduces a
  districts ability to levy into Fund 10
• Many districts budget Fund 10 dollars to improve
  facilities
• It adds to a districts accounting issues
• It may restrict what a district can do with its
  revenue, depending on the annual meeting
  resolution.

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Fund 41 What are some advantages?

• For a district in negative tertiary aid, it
  allows expenditures out of Fund 41 to be added to
  shared cost over a period of years instead of all
  at once. This reduces the amount of negative
  aid a district generates
• It allows a district to separate some capital and
  maintenance projects from the rest of the budget
  to show the board and public a districts effort
  in these areas.

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Fund 41 What are some disadvantages?

• It may restrict the flexibility a district has in
  spending its revenue, and although most districts
  have voters approve a fairly general motion at
  the annual meeting to provide flexibility in the
  range of projects that can be funded, it still
  must be spent only on projects related to
  buildings and sites

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Fund 41 What are some disadvantages?

• It is within the revenue limit and thus reduces
  the amount of Fund 10 revenue a district has
  available
• For a district in positive aid, it may reduce aid
  in a given year, and defer it to another year,
  because the amount of shared cost in the aid
  calculation is added over several years and not
  all at once.

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Fund 41 How is it different from Fund 49?

• Fund 49 revenue comes from borrowing proceeds,
  which is outside the revenue limit
• Fund 41 revenue comes from a districts levy, and
  is within the revenue limits.

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Fund 41 How is it different from Fund 49?

• Fund 49 is set up for specific, usually large,
  capital projects, and expenditures are not
  included in the aid calculation
• Fund 41 use depends on the annual meeting
  resolution, but usually is used for general
  maintenance and smaller capital projects, and
  expenditures are amortized.

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Questions?

• Check our website at
• http//dpi.wi.gov/sfs/index/
• then click on WUFAR on the left-hand sidebar
  and find Capital Expansion Fund under
  Accounting Issues and Codingor call Jerry
  Landmark at 608-267-9209
• ...I dont suffer from insanity I enjoy every
• minute of it!

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COMMUNITY SERVICE FUNDFund 80

• I smile because I dont know what the
  heck is going on

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Fund 80 Community Service Fund

• This information and the information on our
  website is designed to provide school districts
  with general guidance regarding community service
  fund activities. It is based on the DPI Finance
  Teams interpretation of the statutes. We advise
  districts to seek legal counsel should they
  question either the information or the
  interpretation.

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Fund 80 Community Service Fund

• Our goal today is to
• Provide you with some basic information about
  Fund 80
• Make you aware of things to consider that may
  help you determine if a program or service is
  appropriate for Fund 80.

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Fund 80 Community Service Fund

• State Statute 120.13(19)
• COMMUNITY PROGRAMS AND SERVICES. Establish and
  maintain community education, training,
  recreational, cultural or athletic programs and
  services, outside the regular curricular and
  extracurricular programs for pupils, under such
  terms and conditions as the school board
  prescribes. The school board may establish and
  collect fees to cover all or part of the costs of
  such programs and services. Costs associated with
  such programs and services shall not be included
  in the school districts shared cost under s.
  121.07(6)

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Fund 80 a few simple questions

• How does a district establish Fund 80?
• How does a Fund 80 work?
• What are the advantages and disadvantages of a
  Fund 80?
• What are some common Fund 80 programs?
• What expenditures can a district have in Fund 80?
• How does Fund 80 affect revenue limits and aid?
• What should a district be aware of when
  establishing a Fund 80?
• Do you have any recommendations for what is
  appropriate in Fund 80?
• What happens when someone questions a districts
  use of Fund 80?

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How does a district establish Fund 80?

• The School Board establishes the fund per state
  statute 120.13(19)
• It must meet budget requirements per statute
  65.90
• If an operational levy is needed, it must be
  adopted at the annual meeting per statutes
  120.10(8) and 120.12(3).

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How does a Fund 80 work?

• A school board determines the amount of dollars
  it will support for Community Service Programs
• It adds that amount to the district levy, above
  and beyond other levies such as Fund 10, 38, 41
  and 49.

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What are some advantages of using Fund 80?

• It provides district support for community
  programs, allowing the district to be more
  accessible to its community
• Its outside the revenue limit, which may free up
  Fund 10 dollars for instructional uses.

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What are the disadvantages of using Fund 80?

• Its outside the revenue limit, which adds
  additional dollars to a districts levy
• As a result it sometimes gets greater scrutiny
• It sometimes causes accounting issues.

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What are some common Fund 80 programs?

• Recreational
• After-school swimming
• Softball basketball leagues
• Adult Education
• Community Library
• After School Day Care

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What expenditures can a district have in Fund 80?

• Non-instructional expenditures, and can include
  salaries and benefits in some cases
• Refer to the WUFAR Accounting Requirements for
  specific coding.

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How does Fund 80 affect revenue limits and
equalization aid?

• The levy for Fund 80 was removed from revenue
  limit control starting in the 2000-01 school
  year
• (121.91(2m)(e)(1)
• As a result, the Fund 80 levy is completely
  funded by local taxpayers.
• It has never been a factor in the equalization
  aid calculation.

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What should a district be aware of when
establishing a Fund 80?

• State Statute 120.13(19)
• COMMUNITY PROGRAMS AND SERVICES. Establish and
  maintain community education, training,
  recreational, cultural or athletic programs and
  services, outside the regular curricular and
  extracurricular programs for pupils, under such
  terms and conditions as the school board
  prescribes. The school board may establish and
  collect fees to cover all or part of the costs of
  such programs and services. Costs associated with
  such programs and services shall not be included
  in the school districts shared cost under s.
  121.07(6)

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What should a district be aware of when
establishing a Fund 80?

• Is the program outside the usual instructional
  program?
• Is the program open to everyone in the community?
  (age appropriate)
• Is the program fee supported?
• Are program expenditures directly related to the
  activity included?

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What should a district be aware of when
establishing a Fund 80?

• If you can say yes to all those questions, the
  program may be appropriate for inclusion in Fund
  80.

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What should a district be aware of when
establishing a Fund 80?

• in general, if it involves an activity that
  provides instruction and supporting services to
  K-12 pupils, including extracurricular
  activities..
• .its probably not appropriate for Fund 80.

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Do you have any recommendations for what is
appropriate in Fund 80?

• The program should be
• outside the usual instructional timeframe
• open to everyone in the community (age
  appropriate)
• fee supported
• expenditures are directly related to the activity
  included.

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Do you have any recommendations for what is
appropriate in Fund 80?

• We recommend these activities and costs not be
  accounted for in Fund 80
• District and Building Administration
• Facilities used primarily by the instructional
  program
• Expenditures for the welfare and safety of pupils
  and staff involved with K-12 instructional
  programs.

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Do you have any recommendations for what is
appropriate in Fund 80?

• We recommend these activities and costs not be
  accounted for in Fund 80
• Custodian Costs
• Security Services
• Utility Costs
• unless directly associated with the program
  and fully documented, pro-ration of costs is not
  recommended.

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Do you have any recommendations for what is
appropriate in Fund 80?

• Key question if the program in Fund 80 ended,
  would some of the costs shift to Fund 10?
• For example
• If custodial costs included in Fund 80 if the
  custodian didnt have to clean up after the
  program, would he/she have hours reduced?
• If utility costs are included in Fund 80 would
  costs be shifted to Fund 10?

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Do you have any recommendations for what is
appropriate in Fund 80?

• We recommend a district not charge off part of
  the cost of construction or debt service for
  educational facilities, even if the facility may
  be used by the community. An exception may be if
  the facility is not being used for any
  instructional purposes, but only for community
  recreation.

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Do you have any recommendations for what is
appropriate in Fund 80?

• We recommend a district not charge construction
  or infrastructure maintenance costs, like
  sidewalk and parking lot repair, even if it may
  at times be used by the community.

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Do you have any recommendations for what is
appropriate in Fund 80?

• Facility Rental should not be Fund 80
• Statute 120.13(17) allows a district to grant use
  of its facilities if such use does not interfere
  with school purposes or school-related activities
  and it involves a group that is not under the
  control of the school board
• A district can charge fees as long as they dont
  exceed actual costs
• Facility Rental fees are recorded in the general
  fund, not in Fund 80.

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What happens when someone calls us to question a
districts use of Fund 80?

• The consultant refers them to the website which
  has a letter and PowerPoint presentation that
  details the departments recommendations
• The consultant refers them to the district
  administration for further information.

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Questions?

• Check our website at
• http//dpi.wi.gov/sfs/index/
• then click on Community Service Fund on the
  left-hand sidebar, or call Jerry Landmark at
  608-267-9209
• ...ever stop to think, and forget to start
  again?