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The Other FundsFunds 21, 38, 39, 41, 46, 49, 50, 60, 72, 73, 80, 91 and 99

Jillian Raff, Auditor

Bruce Anderson, Consultant

Madison Marriott West

March 18, 2020

How does DPI define a “Fund”?

• A fund is an accounting entity consisting of a self-balancing set of asset, liability, and equity accounts used to account for the district's financial transactions in accordance with laws, regulations, or restrictions. The Department of Public Instruction requires reporting of various revenues and expenditures within specified funds.

• A general description for each Fund can be found on pages 5-1 to 5-5 in the WUFAR http://dpi.wi.gov/sfs/finances/wufar/overview webpage

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How does DPI define a “Fund”?

• Instructional Funds: Instructional funds are funds where

elementary and secondary instruction are recorded (i.e. K

- 12) activities [10, 21, 23, 27, 29, 91, 93, and 99]

• Debt Service Funds: These funds are used for recording

transactions related to repayment of the following

general obligation debt. [38 and 39]

• Capital Projects Funds: These funds are used to account

for expenditures financed through the use of bonds,

promissory notes... [41, 44, 45, 46, 48, and 49]3

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How does DPI define a “Fund”?

• Food and Community Service Funds: These funds are used to account and report transactions of the district's food and community service activities. [50 and 80]

• Fund 60 Custodial Fund: This fund is used to account for custodial activity, which is primarily related to pupil organizations, parent organizations, and certain scholarships pursuant to GASB 84.

• Trust Funds: These funds are used to account for assets held by the district in a trustee capacity for individuals, private organizations, other governments and/or other funds. [72, 73, and 76]

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The “Other Funds” - 21: Special Revenue Trust Fund

- 38: Non-Referendum Debt Service

- 39: Referendum Debt Service

- 41: Capital Expansion Fund

- 46: Long Term Capital Improvement Trust Fund

- 49: Capital Projects

- 50: Food Service

- 60: Custodial Fund

- 72: Private Purpose Trust Fund

- 73: Employee Benefit Trust Fund

- 80: Community Service Fund

- 91: Packaged Services (CESA) Fund

- 99: Other Package & Coop Program Fund

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Fund 21

• Account for special revenue funds that can be used for district operations

• Mostly contributions from gifts and donations from private sources for which no repayment or special service is expected

• May include student or other groups activities that no longer meet the definition of fiduciary.

• Must be expended pursuant to donor restrictions or board commitments

• May have a positive fund balance at year end. Cannot have negative fund balance at year end.

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Private Contributions

• Record in Fund 21 when the expenditures will not occur in the same year as the revenue. Fund 21 activity is excluded from the shared costs calculation.

• Record in Fund 10 when all of the expenditures will occur in the same year as the revenue.

• Should be recorded in funds 27, 29, 38, 39, 49, 50, 72, 80, 99 if the contribution relates to the purpose of that fund.

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Fund 60

• Changed significantly for FY19 due to implementation of GASB Statement No. 84.

• Previously an Agency Fund. Now a Custodial Fund.

• Previously only balance sheet accounts were

reported.

• Changed requirements to meet criteria for a fiduciary

fund.

• Caused changes in some WUFAR account codes

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Fund 60

Custodial Fund Requirements:

•Assets are not held in a trust

•Government controls the assets

•Assets fiduciarily derived

•Meets criteria for Benefits of Organizations or

Benefits of Individuals.

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Fund 60

To be for the benefit of organizations the assets must be both:

• For the benefit of organizations or other governments that are not part of the financial reporting entity. (Must be legally separate) and

•Not derived from the government’s provision of goods or services to those organizations or other governments

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To be for the benefit of individuals, the assets must be both:

• For the benefit of individuals andthe government does not have administrative involvement ordirect financial involvement with the assets; and

•Not derived from the government’s provision of goods or services to those individuals

Fund 60

Administrative Involvement

A recipient government has administrative involvement if, for

example, the government:

•Monitors secondary recipients for compliance with program-

specific requirements

•Determines eligible secondary recipients or projects, even if

using grantor-established criteria

•Has the ability to exercise discretion over how funds are

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Fund 60

What, if anything, will be in Fund 60?

•Student Orgs with no administrative involvement

•Parent Orgs with no administrative involvement

•Non-trust scholarship funds with no administrative

involvement (external determination of recipients and district

does not monitor compliance)

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Fund 60

Prior Agency Fund 60 Accounting:

• No reporting of revenues and expenditures

• Assets (usually cash) = Liabilities (usually Due to Orgs)

• No Fund Balance

• None of the above apply with GASB 84

All Fiduciary Funds reporting now require a:

• Statement of Fiduciary Net Position

• Statement of Changes in Fiduciary Net Position

• Revenues and Expenditures disaggregated by source and type

• Includes custodial funds in Fund 60

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Fund 60

More Information:

• SFS GASB 84 Summary

• SFS GASB 84 Recorded Presentation

• SFS GASB 84 Presentation Slides

https://dpi.wi.gov/sfs/finances/wufar/overview

• In process of updating Fund 60 Guidance.

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Fund 38 and Fund 39

• These funds are used for recording transactions related to repayment of general obligation debt (bonds, state trust fund loans, promissory notes)

• Fund 38 - used to account for transactions for debt issues that were incurred without referendum approval

• Fund 39 - used to account for transactions for debt issues that were incurred with referendum approval

• Sub-funds 31 through 37 maybe used as necessary

• Reported in Fund 38 and 39 as appropriate in the DPI budget & annual reports

• More information:

• http://dpi.wi.gov/sfs/finances/debt/overview

• http://dpi.wi.gov/sfs/finances/wufar/accounting-issues-examples15

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Fund 39- Debt Payments

• School Districts must levy sufficient amounts to meet all

principal and interest payments as they become due. Additional

sums may be levied per Wis Stats 67.11(1)(e) if the district

intends to make a prepayment on the debt.

• State law does allow a district to increase its tax levy above the

amounts to pay current debt, “in order to speed the payment of

municipal obligations.”

• Transfer of Fund 39 Accumulated Balance is explained:

- https://dpi.wi.gov/sites/default/files/imce/sfs/pdf/Fund-39-

Balance-Transfer-Policy.pdf

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Fund 41

Capital Expansion Fund

• Projects financed with a tax levy per Wis. Stats. 120.10(10m)

• Levy is within the Revenue Limit

• Restricted to capital expenditures related to buildings and sites

• Not equipment

• Not furnishings

• Requires approval at Annual Meeting

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Fund 41

Eligible expenditures defined:

• For acquiring and remodeling buildings and sites, and

• Maintenance or repair expenditures that extend or enhance the service life of building, building components, sites and site components

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Fund 41

Why use Fund 41?

• Allows for amortization of expenses over length of time

• In year of spending - reduces shared costs in aid formula• Can reduce the impact of negative tertiary aid for districts

in that position

• Smooth out aid for positively aided districts.

Disadvantage• Restricts use of limited revenues to qualifying capital

expansion projects• Cannot be redirected to use for general operations or

routine maintenance

• Creates additional accounting / reporting requirements19

Fund 41 - Amortizing Expenditures Over Time

Yr Levy Expend. Amortized ExpendituresTotal

Amount

1 $105,000 $100,000 $100,000 $100,000

2 $105,000 $100,000 $50,000 $50,000

3 $105,000 $100,000 $50,000 $33,333 $83,333

4 $105,000 $100,000 $33,333 $25,000 $58,333

5 $105,000 $100,000 $33,334 $25,000 $20,000 $78,333

6 $0 $25,000 $25,000 $20,000 $5,000 $50,000

7 $0 $0 $25,000 $20,000 $5,000 $50,000

8 $0 $0 $20,000 $5,000 $25,000

9 $0 $0 $20,000 $5,000 $25,000

10 $0 $0 $5,000 $5,000

T $525,000 $525,000 $100,000 $100,000 $100,000 $100,000 $100,000 $25,000 $525,000

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Fund 41

For more information:

• Capital Expansion Fund - Fund 41

https://dpi.wi.gov/sfs/finances/wufar/accounting-issues-

examples

• Capital Projects Funds 41 and 46 Presentationhttps://dpi.wi.gov/sfs/finances/fund-info/capital-projects-funds

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Fund 46

Long-term Capital Improvement Trust Fund

A school board may establish a “trust” to fund capital improvement projects per their ten year long-term capital improvement plan.

REQUIREMENTS - Getting Started

1. Board approved 10 year capital improvement plan.

2. Board resolution to establish a trust.

3. Creation of a segregated bank account.

For additional information or document submission contact

Roger Kordus: Roger.Kordus@dpi.wi.gov or (608) 267-3752.

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Fund 46

RESTRICTIONS

• Funds may only be accessed five years after the establishment of the “trust” fund.

• Funds must be physically deposited and held in a segregated bank/investment (separate and distinct from other district accounts) until they are expended for capital improvement projects per the district’s plan.

• Funds invested as per sec. 66.0603, Wis. Stats.

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Fund 46

REPORTING REQUIREMENTS

The following must be reported to DPI:

1. Official Board minutes approving the long-term capital improvement plan.

2. Signed resolution creating the Long-term Capital Improvement Trust Fund or official minutes documenting the creation of the fund.

3. Documentation that confirms the existence of a segregated bank/investment account.

https://dpi.wi.gov/sites/default/files/imce/sfs/doc/Long-Term-Capital-Improvement-Trust-Fund-46%282%29.docx

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Fund 73

Employee Benefit Trust Fund

• Used to account for resources held in trust for formally established defined benefit plans, defined contribution plans, or employee benefit plans

• Must be legally established in accordance with state statutes, federal law, and IRS requirements

• Legally irrevocable trust

• Created as a mechanism for districts to fund post-employment benefit obligations

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Fund 73

Employee Benefit Trust Fund

• Districts not required to use this

- May opt to “pay as you go,” however, that does not help reduce the long-term liability

• Requires actuarial study to determine funding levels

- Remember to sent DPI a copy as well

• District makes payments to the trust from the governmental funds (Funds 10, 27, 50, and 80) to fund annual obligations.

• Fund 73 pays the retiree benefits26

Fund 72

Private-Purpose Trust Fund Requirements:

•Meets trust requirements

• Includes all trusts that are not Pension, OPEB, or Investment Trust Funds

•Government controls the assets

•Assets fiduciarily derived

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Fund 72

Changes due to GASB 84:

• Because of the trust criteria, we do expect that some districts will have

changes related to activity previously record in Private-Purpose Trust

Funds (Fund 72)

• Especially related to non-trust scholarship funds.

• Non-trust activity should no longer be in Fund 72

Scholarships should be recorded as follows:

• Fiduciary Scholarship Trust Funds – Fund 72

• Custodial Scholarship Funds – Fund 60

• Non-Fiduciary Scholarship Funds – Fund 10 or 21

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Fund 73

Why use Fund 73?

• To reduce the district’s long-term unfunded

obligations.

• Costs to Special Education Fund are aidable up

to the ADC if one of the three criteria are met.

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Fund 73

• More Employee Benefit Trust Fund information:

• Accounting Issues and Coding Examples” Website: http://dpi.wi.gov/sfs/finances/wufar/accounting-issues-examples

• Fund 73 - Account Descriptions and OPEB Sample Entries

• Fund 73 - Sample of Activity

• Employee Benefit Trust Fund Webpage http://dpi.wi.gov/sfs/finances/fund-info/employee-benefit-trust-fund

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Fund 49

Other Capital Projects Fund

• Primarily Funded with Borrowing Proceeds

• Bonds, Promissory Notes, State Trust Fund Loans

• Capital projects funded through other sources of revenue such as donations and sale of capital objects may be accounted for in Fund 49

• Sub-funds 42, 43, 44, 45, and 47 maybe used as necessary

• Reported in Fund 49 in the DPI budget and annual reports

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Fund 50

• All revenues and expenditures related to the district’s food service activities are recorded in this fund

• A fund balance in the Food Service Fund is permitted

• A deficit in the food service fund must be eliminated with an operating transfer from the general fund (Fund 10).

• More Information:

• http://dpi.wi.gov/sfs/finances/wufar/accounting-issues-examples

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Fund 80

Community Programs and Service Fund websitehttp://dpi.wi.gov/sfs/finances/fund-info/community-service/overview

• The authority for a school board to operate Community Programs and Services (Fund 80) is established under sec. 120.13(19), Wis. Stats., and PI 80.

• 120.13(19) concludes with this sentence:

- The school board may not expend moneys on ineligible costs, as defined by DPI by rule.

- Costs associated with such programs and services shall not be included in the school district's shared cost under s. 121.07 (6).

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Fund 80

Community Programs and Service Fund website

http://dpi.wi.gov/sfs/finances/fund-info/community-service/overview

• The levy for Fund 80 was removed from revenue limit control starting in the 2000-01 school year [s. 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.

Chapter PI 80 Community Programs and Services was creates per 2013 Wisconsin Act 306. Effective Date: May 1, 2015. http://dpi.wi.gov/sfs/finances/fund-info/community-service/fund-80

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Fund 80

In addition, PI 80.02 defines ineligible Fund 80 costs as:

• Costs for any program or service that is limited to only school district pupils.

• Costs for any program or service whose schedule presents a significant barrier for age-appropriate school district residents to participate in the program or service.

• Costs that are not the actual, additional cost to operate community programs and services under s. 120.13 (19), Stats. (No percentages of cost allowed!)

• Costs that would be incurred by the school district if the community programs and services were not provided by the school district

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Does a program or service belongs in Fund 10 (General) or Fund 80?

It is the Board of Education and the Administration who decide what meets the criteria to be in Fund 80.

Districts are encouraged to use the “Decision Tree for potential Fund 80 Community Programs and Services” https://dpi.wi.gov/sites/default/files/imce/sfs/pdf/Final-Decision-Tree-for-Potential-Fund-80-03-2019.pdf before proceeding with a change.

Through this evaluation process the Board and Administration will decided if certain activities are associated with:

• a well-rounded curriculum (curricular and extra-curricular activities) including summer school programs where student minutes will be counted [Fund 10] or

• if the program has the primary function of serving the community. [Fund 80] It is a local decision.

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Fund 80 (PI-80)

• 2013 Act 306 requires that Fund 80 expenditures be audited by the school district’s auditor.

• NOTE: Current law already directs DPI to exclude from Shared Costs (for General Aid purposes) any CPS expenditures.

- If a CPS expenditure audit determines that a district had inappropriately coded CPS expenditures to Fund 10, those expenditures would have to be removed from Fund 10 and would decrease the district’s Shared Costs for General Aid purposes. Wis. Stat. § 121.91(4)(r)

• When the program/activity is held in a K-12 facility, which Fund is paying for the utilities and other related cost?

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Fund 80 (PI-80)

• Current law requires DPI to determine if ineligible CPS expenditures exist

• If reported in the audit process; DPI must reduce the district’s allowable revenue limit authority the following year by the amount of the ineligible CPS expenditures; structured as a negative exemption rather than a reduction to the district’s base.

• This was first applied to the Revenue Limit calculation for the 2015-16 school year, based on 2014-15 expenditures. To date two districts have experienced this consequence.

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Fund 80

Preparing for an CPS audit;

• Each program or service will need to be documented within the district’s accounting system.

• Supporting documentation will be part of the audit process.

• Community Service Fund Information Wisconsin Uniform Financial Accounting Requirements (WUFAR) will assist each district in this process.

• http://dpi.wi.gov/sfs/finances/fund-info/community-service/overview web page provides the most recent information regarding Fund 80.

• “Latest News” includes information on how Fund 80 could repaying Fund 10 for operational costs.

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Fund 90

Package and Cooperative Program Fund

• Used to account for expenditures made by a host district for programs and services offered to other districts

• Fund 91: Through a CESA

• Fund 99: Others

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Fund 91

Host District

• CESA acts as fiscal agent for the districts in the cooperative

• Other districts pay CESA their share

• Host district pays CESA for its share

• Expenditure to Fund 10

• CESA reimburses host district for all program expenditures

• No fund balance allowed

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Fund 99

Fiscal Agent District• District that acts as the fiscal agent for the districts

in the cooperative

• Other districts pay host district their share

• Host district transfers from F-10 its share of

costs

• Revenue to Fund 99

• Expenditure to Fund 10

• Pays all expenditures for program

• No fund balance allowed

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Fund 99

Examples of Cooperative Services:

• Hockey Co-op

• Swim Team Co-op

• Transportation Services

• Business Education Program

• REQUIRES completion of a “66:03 Agreement”

Wis. Stats. 66.0301

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Fund 90

Package & Cooperative Services

• NOTE: Shared Special Education services are recorded in Fund 27 not in Fund 90.

More information:

• Cooperative Service Agreement 66.0301 information can be found on this webpage. http://dpi.wi.gov/sfs/finances/fund-info/package-cooperative-funds

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THANK YOU!

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Jillian Raff, Auditor

608-267-7882

Jillian.Raff@dpi.wi.gov

Bruce Anderson, Consultant

608-267-9707

Bruce.Anderson@dpi.wi.gov

Visit our website: http://dpi.wi.gov/sfs

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