Financial Accountability System Resource Guide, Update 17 ...

1 Financial Accountability System Resource Guide, Update 17 Module 1: Financial accounting and Reporting Texas Education Agency 2020 Module 1 | Financial accounting and Reporting Texas Education Agency Financial Accountability System Resource Guide, Update 17 Module 1: Financial accounting and Reporting Table of Contents TABLE OF CONTENTS .. 2 NOTES ON USING THIS MODULE .. 8 Financial accounting REQUIREMENTS .. 10 Financial accounting and Reporting System .. 10 Statutory and Regulatory Requirements and Generally Accepted accounting Principles .. 11 Statutory and Regulatory Requirements.

2 11 GAAP .. 12 Records Retention .. 13 Budget Requirements .. 13 Audit 14 District Fiscal Year .. 14 Changing to a June 30 Fiscal Year .. 15 Changing Back to an August 31 Fiscal Year End .. 16 District Depository Contract .. 17 Investment of Public Funds .. 17 Requirements Related to Ethical Considerations .. 18 Nepotism .. 18 Conflict of Interest .. 21 Other Conflict of In terest Disclosure R equirements .. 24 Financial accounting ELEMENTS .. 25 Current Assets .. 25 Texas Education Agency 2020 Financial Accountability System Resource Guide 2 Module 1 | Financial accounting and Reporting Cash and Investments.

3 26 Accounts Receivable .. 27 Property Taxes .. 27 Other Receivables .. 28 Inventory .. 29 Monitoring and Valuing Inventory .. 29 Capital Assets .. 30 Control of Capital Assets .. 32 Inventories of Capital Assets .. 32 Capitalization of Capital Assets .. 33 Impairment of Capital Assets .. 33 Liabilities .. 37 Current Liabilities .. 37 Long-term Liabilities .. 38 Payroll Liabilities .. 38 Arbitrage Rebate Liabilities .. 44 Contractor Withholding .. 46 Debt .. 46 Types of Debt Instruments .. 46 Debt Refunding .. 47 Other Debt Disclosure Requirements.

4 48 Risk Financing and Related Insurance Issues .. 50 Deferred Outflows of Resources and Deferred Inflows of Resources and Outflows and Inflows of Resources .. 50 Deferred Outflows of Resources .. 51 Deferred Inflows of Resources .. 52 Presentation of Deferred Outflows of Resources and Deferred Inflows of Resources on the Financial Statements .. 53 Outflows of Resources and Inflows of Resources .. 54 Texas Education Agency 2020 Financial Accountability System Resource Guide 3 Module 1 | Financial accounting and Reporting Fund Equity .. 56 Fund Balance.

5 56 Net Position .. 56 Fund Types and Financial Statement Presentations .. 57 Basis of accounting .. 58 Measurement Focus .. 59 Government-wide Financial Statements .. 61 Governmental Funds .. 62 Governmental Fund Financial Statements .. 63 Proprietary Funds .. 66 Proprietary Fund Financial Statements .. 67 Fiduciary Funds .. 67 Fiduciary Fund Financial Statements .. 68 Encumbrance accounting .. 69 Reporting Requirements for Encumbrances .. 69 Interfund Transfers .. 70 Reciprocal Interfund Activity .. 70 Nonreciprocal Interfund Activity .. 70 Revenues.

6 71 Reporting of Revenues .. 72 Revenue Categories .. 73 Gifts and Bequests .. 73 Expenditures and Expenses .. 74 Expenditures .. 75 Types of Expenditures and accounting Treatment .. 76 Expenses .. 77 Types of Expenses and accounting Treatment .. 77 Cocurricular/Extracurricular Expenditure Reimbursement Issues .. 78 Texas Education Agency 2020 Financial Accountability System Resource Guide 4 Module 1 | Financial accounting and Reporting Real Property Expenditure Issues .. 79 Other Financing Sources (Uses) .. 80 Special and Extraordinary Items.

7 81 Subsequent Events .. 82 Recognized Event .. 82 Nonrecognized Event .. 83 SPECIAL accounting TREATMENTS .. 83 Shared Services Arrangements .. 84 Fiscal Agent .. 84 The Written Agreement .. 84 Requirements Related to Special Education SSAs .. 88 Other Types of Sharing Arrangements .. 88 Determination of accounting and Reporting Treatment for SSAs .. 89 Food Service Operations .. 90 Food Service Operation Funds .. 90 accounting 92 Revenue Recognition .. 95 Fund Balance .. 97 On-Behalf Teacher Retirement System Payments .. 98 Overview of Teacher Retirement Contributions and Payments.

8 98 On-Behalf Payment Calculation and accounting Methodology .. 99 Pension Expense, Net Pension Liability, Other Postemployment Benefits, and Related Items .. 101 Financial Statement Presentation and Data Control Codes (DCC) for the TEA .. 103 Definitions of Terms Related to Pension accounting for GASB 68 and 75 .. 104 Example of TRS Pension Allocation.. 106 Example of Pension Expense, Contributions, and Journal Entries .. 107 Proportionate Share o f Collective N et Pension Liability or Assets .. 115 Texas Education Agency 2020 Financial Accountability System Resource Guide 5 Module 1 | Financial accounting and Reporting COST accounting .

9 118 accounting Considerations .. 119 Minimum Requirements for State Reporting .. 119 Account Code Structure Minimum Requirements .. 120 Direct and Indirect Costs .. 124 Direct Costs .. 125 Indirect Costs .. 125 Salary and Fringe Benefits Allocations .. 126 Allocation of Salaries .. 126 Fringe Benefits .. 132 Cost Allocation Methods .. 137 Administrative Costs .. 142 REQUIRED REPORTS AND DATA SUBMISSION .. 142 Annual Financial and Compliance Report .. 143 Deadlines for Submitting the AFR .. 143 Instructions for Submitting the AFR .. 143 Required Components of the AFR.

10 144 Data Feed Codes .. 147 Publication in a Newspaper .. 147 Notification for Late Audit .. 148 Noncompliance .. 148 Other Reports to the TEA, State Agencies, and Local Entities .. 148 State Compensatory Education Audit .. 148 State Reporting for Bonds .. 149 Other State-Required Report Municipal Advisory Council .. 150 PEIMS Reporting .. 150 District Reporting Schedule .. 151 Texas Education Agency 2020 Financial Accountability System Resource Guide 6 Module 1 | Financial accounting and Reporting Reports to Federal Agencies .. 151 Single Audit Filing.