Commissioner’s Memo COM-06-044 dated December 8, 2005, gave the following Source of Fund Codes and Revenue Codes required for the new facilities programs established by Act 2206 of 2005:
...........................................Source of Funds Code....Revenue Code
Academic Facilities Immediate Repair............401..........32921
Academic Facilities Catastrophic Repair.........402..........32922
Academic Facilities Transitional Program........403..........32923
Academic Facilities Partnership Program........404..........32924
The Source of Funds code is also required for expenditures relating to each of these programs. Therefore, an expenditure that utilizes the revenue for Academic Facilities Immediate Repair must be charged to a budget unit that includes Source of Funds Code 401. If a district receives revenue that is a reimbursement for expenditures made in a previous school year, a transfer to the fund originally charged may be made from the Academic Facilities Fund. A detailed accounting of those previous year expenditures must be attached to the Journal Entry recording the transfer and, if requested, submitted to the Arkansas Department of Education. No other transfers in or out of Academic Facilities Funds are allowable.
All funds received for these programs must be utilized in accordance with the rules adopted by the Arkansas Commission of Public School Academic Facilities and Transportation. Questions regarding those rules should be directed to the Division of Academic Facilities and Transportation at 501-682-4261.
Costs of projects utilizing funds from one of the above sources will exceed the total revenue provided by Act 2206 of 2005. Therefore, the expenditures for each project will normally be charged to both a restricted and a non-restricted Source of Funds code. Since transfers are only allowable if reimbursing a prior year expenditure, the total expenditures coded to Source of Funds 401, 402, 403 and 404 will be equal to the revenue for each of the Source of Funds codes by the completion of the project.
In order to accurately track the total expenditures for each facilities project that utilizes Act 2206 revenue, it will be necessary to include a district-defined program code (3-digit number following LEA number) in the budget unit. This program code should be within the range of 070 – 099 inclusive. This range of program codes should not be used for any purpose other than projects utilizing state facilities revenue. For program code purposes, a facilities project is all improvements relating to a specific academic facility and included on a single application for facilities funding. If expenditures relating to these projects have already occurred, it will be necessary to reclassify the expenditures to budget units that include the required program code. These reclassifications must occur prior to submitting the September 15, 2006, Cycle 1 Report.
There is no requirement that a particular fund be used for projects utilizing Academic Facilities Immediate Repair and Academic Facilities Catastrophic Repair revenue. Funds 2, 3 and 5 would all be appropriate funds for these projects. The type of expenditure will determine the appropriate function code. For example, function codes in the 4000-4999 range are for “New Construction” types of expenditures that will be added to Fixed Asset Inventory. Act 1426 of 2005 defines new construction as “any improvement to an academic facility and, if necessary, related areas, such as the physical plant and grounds, that brings the state of condition or efficiency of the academic facility to a state of condition or efficiency better than the academic facility’s original condition of completeness or efficiency.”
Function codes in the 2600-2699 range will include maintenance, repair and renovation of facilities. Act 1426 defines this as “any activity or improvement to an academic facility and, if necessary, related areas, such as the physical plant and grounds, that: (A) Maintains, conserves, or protects the state of condition or efficiency of the academic facility; or (B) Brings the state of condition or efficiency of the academic facility up to the facility’s original condition of completeness or efficiency.” Expenditures charged to the 2600-2699 range of function codes should not be added to Fixed Asset Inventory and, unless paid from state facilities revenue, count toward meeting the Act 1426 requirement to spend 9% of foundation funding “exclusively to payment of utilities and custodial, maintenance, repair, and renovation activities and related personnel costs.”
Projects utilizing Academic Facilities Transitional Program revenue and Academic Partnership Program revenue will be for "New Construction" projects and should be charged to Fund 3 (Building Fund) and functions in the 4000-4999 range. The costs of these projects should be added to Fixed Asset Inventory.