Charter school business operations can be overwhelming! With so many moving parts – completing even the smallest task can sometimes take longer than expected due to the endless challenges that present themselves in the day to day operations. Business Office personnel are all faced with responsibilities of managing non-instructional functions and services so that the instructional team can focus on teaching and maximizing instructional time. Because your school is a school of choice, the business and logistics side of the school are that much more important to running a smooth and productive operation.
What falls under Charter School “Business”?
If you are a new charter school or just trying to improve your existing processes, it’s important to note and be familiar with the various duties and best practices that come with ensuring your school stays fiscally responsible and compliant with all governmental authorities such as the US Department of Education and the Texas Education Agency (TEA). While the specific tasks of business office personnel are numerous, there are some key areas that are vital to the success of your school’s business operations such as:
- Having a working knowledge of the FASRG (Financial Accountability Systems Resource Guide) which describes the rules of financial accounting for school districts, charter schools, and education service centers
- Being able to build a budget and code expenditures to the correct account codes
- There is a 20-digit account code and every segment is significant
- Conforming to GAAP (Generally Accepted Accounting Principles), Governmental Fund Accounting, and knowing how fixed assets and depreciation are treated
- And finally, financial reporting and compliance which cover areas like
- Allowable expenditures
- Board Reports
- Annual Financial Reports – Accounting documents and records must be audited annually by an independent auditor
- PEIMS (Public Education Information Management System) which encompasses all data requested and received by TEA such as student demographic and academic performance, personnel, financial, and organizational information.
Accounting for anything begins with a budget code!
Building a budget begins with understanding the 20-digit account code and the meaning of each segment. For example: the following table can be found in more detail in Module 11 of the FASRG. Module 11 is the Special Supplement to Financial Accounting and Reporting Non-Profit Charter School of Accounts. Red segment indicates a code that may be used at local option of the charter school. Blue segment indicates a mandatory code for State reporting purposes.
A major purpose of the account code structure is to establish the standard charter school financial accounting system that is compatible with PEIMS. Although some codes are optional to use, the sequence of the codes within the structure are to be uniformly used by all charter schools in accordance with GAAP. Let’s look at the meanings of each segment.
- Fund Code – A mandatory 3-digit code is to be used for all financial transactions to identify the fund group and specific fund.
- Function Code – A mandatory 2-digit code applied to expenditures that identify the purpose of the transaction.
- Object Code – A mandatory 4-digit code that identifies the nature and object of an account, a transaction or a source.
- Sub-Object Code – A 2-digit code for optional use to provide special accountability at the local level.
- Organization Code – A mandatory 3-digit code that identifies the organization, i.e., High School, Middle School, Elementary School, Superintendent’s office, etc.
- Year Code – A mandatory single digit code that identifies the fiscal year of the transaction or the project year of inception of a grant project.
- PIC (Program Intent Code) – A mandatory 2-digit code used to designate the intent of a program provided to students.
- Local Option Code – A single code that is used at the local option
- Local Option Code – An optional 2-digit code that may be used by the district to further describe the transaction
A budget Code Tells a Story
Let’s look at the following “story” and figure out what it’s telling.
So, here we see that textbooks (6321) are being purchased out of the start up grant (Fund 258) for students (Function 11) located at campus (001) for basic regular education purposes (Program Intent Code 11). In this example, the charter school is not using any of the local options which could have further detailed the “type” of book by using a sub-object code or any of the other local option codes.
To learn more details about Budget coding and Accounting topics, sign up for our comprehensive “Accounting Overview” course!