To: FMS Listserv

To: FMS Listserv

The House and Senate Joint Education Committee met Monday, November 24, 2008, and passed the following motion:

"By motion made by Rep. Abernathy, the Education Committee requests ADE, BLR, and AASBO to determine if financial coding changes are required in order to better compare school district expenditures with the components of the Adequacy Funding Matrix. The Committee requests that any required changes be communicated by the ADE to school districts no later than January 31, 2009."

The Arkansas Association of School Business Officials has formed a Coding Committee and that committee met November 18, 2008, in anticipation of the above motion. Kathleen Crain, Assistant Director APSCN-Financial Applications, and Bill Goff, Assistant Commissioner-Fiscal and Administrative Services, met with the committee.

The committee reached consensus that the Source of Fund Codes would be the best option for reporting expenditures funded solely with Foundation Funding. Districts currently may use Source of Fund Codes in the range of 001-199 for district-defined purposes. Some of those purposes are to record expenditures from restricted funds over and above foundation funding, and some of those purposes are for local budgeting requirements. It was assumed that only funds 1 and 2 (Teacher Salary and Operating) would contain expenditures from Foundation Funding. Therefore, the committee suggests the following coding requirement for 2009-2010 in order to "better compare school district expenditures with the components of the Adequacy Funding Matrix."

• All Expenditures from Foundation Funding and Enhanced Funding must be charged to either Fund 1 (Teacher Salary) or Fund 2 (Operating).

• All Expenditures from Foundation Funding and Enhanced Funding must be charged to a Source of Fund Code of 000 or within the range of 100 - 199 (inclusive). (1000, 1100-1199, 2000, 2100-2199)

Foundation Funding will include the state funding (revenue code 31101) and the revenue resulting from the 25 mills Uniform Rate of Tax (URT). Enhanced Funding includes state funding in revenue code 31102. At this time, we do not anticipate the need to separately code expenditures from taxes above the 25 mill URT.

If you have any questions or concerns about the above coding change, please email the following address:

William J. (Bill) Goff, CPA

Assistant Commissioner-Fiscal and Administrative Services Arkansas Department of Education