Description of Accounting Structure and Budget Classifications
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.
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 also included in this fund. The Education Fund also includes the Special Education sub-fund which covers some special education expenditures.
- The Tort Immunity Fund (formerly a sub-fund of the Education Fund) is used to cover a portion of the cost of district insurance and risk management. Revenues in this fund include tax levies and interest income.
- The Operations and Maintenance Fund is where the costs of maintaining and operating school facilities are charged including custodial and maintenance salaries and costs. 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 bond sales and 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 receives the taxes levied for repayment of debt and makes the payments for interest and retirement of debt. This fund is also 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 tax levies. No expenditures are made from this fund; however, the money is available to loan to other funds or transfer to the Education Fund.
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 - Low Income, Title II - Teacher Quality and Title III - Bilingual.
Expenditures are classified by fund, function, object and program. Budget expenditures are presented by fund (as described previously). Some examples of function classifications are Elementary Classroom Instruction, Social Work Services, and Library Media Services. The object classification denotes the type of expenditure such as salaries, benefits, services, supplies, and capital outlay. Program numbers are used internally to divide budgeted expenditures into specific points of control such as the grade level budgets within each school.
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