La. Admin. Code tit. 28 § XLI-605

Current through Register Vol. 50, No. 11, November 20, 2024

Section XLI-605 - Types of Expenditures and Accounting Treatments

A. The major types of expenditures are operating, capital, debt service and intergovernmental charges described as follows.

1. Operating expenditures for governmental agencies include a wide range of expenditures. Often, the largest portion relates to payroll and related employee benefits. The modified accrual basis of accounting requires that proper accruals be made for the amount of unpaid salaries and related benefits earned at year-end, because these liabilities will be paid early in the next reporting period. (The other types of operating expenditures should be accounted for in the same manner, with the recording of a liability when the goods or services are received and necessary accruals made at year-end.)

2. Capital expenditures relate to the acquisition of capital assets. Such expenditures may be recorded in the general fund, special revenue funds, or capital projects funds, depending on the source of funding. Purchases of personal property, such as furniture and equipment, are usually recorded as expenditures in the general fund if they are financed from operating budgets or in the general fund or special revenue funds if they are financed from grants. Major projects, such as the construction of a school building financed by the proceeds of debt, should be accounted for in a capital projects fund. Costs associated with acquiring capital assets in governmental funds are recorded as capital outlay expenditures when the liability is incurred, usually on receipt of the related asset.

3. Debt service expenditures represent the payment of principal and interest needed to service debt. Such payments are usually recorded as expenditures in the debt service fund on the due date. The general fund may also be used if a debt service fund is not required. The modified accrual basis of accounting provides that accruals for interest are not usually allowed. When funds have been transferred to the debt service fund in anticipation of making debt service payments shortly after the end of the period (no more than 30 days), it is acceptable to accrue interest and maturing debt in the debt service fund in the year the transfer is made. This option is available only if monies are legally required to be set aside in a debt service fund and if used on a consistent basis.

4. Intergovernmental charges relate to the transfer of resources from one school district to another, to or from other local governments, or to or from the state. Examples of such charges include contracted instructional services between public schools, other local governments, or state-operated schools and certain transfers of resources associated with state and local funding (e.g., incremental costs associated with wealth redistribution). Such expenditures are accounted for in the general fund using the modified accrual basis of accounting. Payments between school districts and fiscal agents of cooperative services arrangements (e.g., joint instructional or servicing agreements) are also considered intergovernmental charges.

B. In addition, transfers result in the reduction of a fund's expendable resources, but they are not classified as expenditures. A transfer is a legally authorized movement of monies between funds in which one fund is responsible for the receipt of funds and another fund is responsible for the actual disbursement. In a transfer, the disbursing fund records the transaction as "other financing uses" of resources, and not as an operating expenditure, whereas the fund receiving the transfer does not record the receipts as revenue, but rather as "other financing sources" of funds.

La. Admin. Code tit. 28, § XLI-605

Promulgated by the Board of Elementary and Secondary Education, LR 36:1508 (July 2010).

AUTHORITY NOTE: Promulgated in accordance with R.S. 17:6(A)(10).