Basis of Accounting and Reporting
Similar to most school districts in Illinois, District 68 operates on a cash basis day-to-day with revenues recorded when received and expenditures recognized when paid.  However, the District conforms to the requirements set forth in Governmental Accounting Standards Board Statement 34 which requires the use of modified accrual accounting for the District’s year-end financial statement.  A Management’s Discussion and Analysis (MD&A) section which provides an analytical overview of the District’s financial statements is included in the audit report presented to the Board in November.

A major revision to the Illinois School Accounting System was completed this spring and corresponding changes are reflected in this budget including modifications to the Bond & Interest Fund and establishment of a Capital Improvements Fund.
 
Fund Accounting
As mandated by the state, all of the financial activity of the District is segregated into various funds.  Each fund is an independent fiscal and accounting unit designed for a specific activity.  The District currently uses the following funds:

• The Education Fund is where the greatest variety and largest volume of transactions are recorded because it includes anything not specifically included in another fund.  Most revenues and expenditures directly related to the educational program are shown in this fund including teacher and other instructional salaries and costs.  Community services programs such as lunch and child care are included in this fund.   The Education Fund also includes the Special Education sub-fund which covers some special education expenditures and the Tort Immunity sub-fund which can be used to cover the cost of District insurance and risk management.
• The Operations and Maintenance Fund is where the costs of maintaining and operating school facilities are charged including custodial and maintenance salaries and costs.  Capital improvement projects are also shown in this fund.  Revenues in this fund include tax levies, building rental, and interest income.
• The Capital Improvements Fund reflects the cost of major facility related capital improvements.  Projects are funded through transfers from the Operations and Maintenance Fund.
• The Transportation Fund is used to pay the costs associated with transporting children including bus driver salaries and contractual special education transportation.  Revenues include tax levies, student fees, and state transportation aid.
• The Debt Service Fund (formerly Bond and Interest) receives the taxes levied for repayment of debt and makes the payments for interest and retirement of debt. This fund will also now be used for payment of capital leases such as copiers, using funds transferred from the Education Fund.
• The Municipal Retirement Fund is used to pay the pension contributions required of the District for classified staff members who work more than 600 hours per year.  It includes the Social Security sub-fund which is used to pay the District share of social security and Medicare and is supported by tax revenue.
• The Working Cash Fund is the repository for the proceeds of Working Cash Bonds as well as the tax levy.  No expenditures are made from this fund; however, the money is available to loan to other funds or transfer to the Education Fund.

Accounting Classifications

Revenues are grouped into three divisions. 

• Local revenue sources include property taxes, corporate personal property replacement tax revenue, student fees, interest income, rental income, tuition and lunch program receipts. 
• State revenue sources include general state aid as well as special education and transportation reimbursements and categorical state grants. 
• Federal revenue sources include Title I, II, III, and IV (Title V was eliminated for this year).

Expenditures are classified by fund, function, object and program.  Budget expenditures are presented by fund (as described previously).  Some examples of function classifications are Social Work Services and Library Media Services.  The object classification denotes the type of expenditure such as salaries, benefits, services, supplies, capital outlay and tuition.  Program numbers are used internally to divide budgeted expenditures into specific points of control such as the grade level budgets within each school.