ADE Director's Communication Memo Form

Memo Number : COM-07-097

Date Created : 03/29/2007


Co-op Directors

Type of Memo: Regulatory
Response Required: No
Section:   APSCN - Bill Goff, Director
New Financial Coding Requirements for 2007-2008

Regulatory Authority:
Ark. Code Ann. Sections 6-20-2201 et seq. (as amended by Act 730 of 2005)

Contact Person:
Kathleen Crain

Phone Number:


Due to changes in legislation and financial reporting requirements, the following new financial coding requirements will be effective beginning with the 2007-2008 school year.

1. Program code 438 must be used for all expenditures relating to Alternative Learning Environments. This will allow school districts and the state to track all expenditures relating to Alternative Education, both from restricted Categorical Funds and unrestricted funds.

2. Program code 270 must be used for all expenditures relating to Gifted and Talented Programs. This will allow school districts and the state to track all Gifted and Talented expenditures to ensure minimum expenditure requirements have been met.

3. When allocating maintenance and transportation expenditures to athletics or any other program, object code 68999 must be used or each individual line within functions 2600-2699 and 2700-2799 must be allocated separately. For example, if athletic trip bus miles equal 10,000 and the state average cost per mile of $3.31 is used, the total bus transportation cost for athletics would be $33,100. The journal entry for this allocation would be:

Debit 2000 2720 000 115 00 68999 33,100
Credit 2000 2720 000 000 00 68999 33,100

Net result is zero in function 2720 and object code 68999 but $33,100 has been moved to program code 115.

4. Salaries and benefits of Supervisory Aides and other costs associated with the supervision of students during non-instructional time (before and after school, recess, etc.) must be charged to function 2191.

5. Instructional Facilitators are responsible for facilitating continuous improvement in classroom instruction by providing instructional support to teachers in the elements of research-based instruction and by demonstrating the alignment of instruction with curriculum standards and assessment tools. Typically they will specialize in math (job code 7100), literacy (job code 7110), science (job code 7120) or social studies (job code 7130). For 2007-2008 the expenditures related to Instructional Facilitators must be charged to one or more of the applicable function codes shown below:

a. Function 2294 Instructional Facilitator, Math
b. Function 2295 Instructional Facilitator, Science
c. Function 2297 Instructional Facilitator, Literacy
d. Function 2298 Instructional Facilitator, Social Studies

6. Function code 5300, Payment to Other LEAs (Within the State) and Function Code 5400, Payment to Other LEAs (Outside the State) will not be allowed for 2007-2008 expenditures. The paying district must code the expenditure to the function that applies to the goods or services being purchased. The Arkansas district receiving payment must receipt the revenue in the 19510-19519 range of revenue codes. Special rules may apply to shared grant funds involving a lead district and/or educational service cooperatives. Please contact APSCN Financial Field Support or the APSCN Help Desk at 800-435-7989 for questions relating to grant funds administered on behalf of multiple LEAs.

7. Location codes 770-779 are reserved for districts to use when multiple campuses share resources and a state assigned 3-digit LEA number is required in the budget unit. Budget units may be established utilizing location codes 770-779, and expenditures can be allocated to the appropriate school-level budget unit before closing the year. For example, psychological examiner who covers several different campuses can be charged to a budget unit with a location code in the 770-779 range. At year-end, the salaries and benefits of the psychological examiner can be allocated and re-distributed to the appropriate campuses using a reasonable method such as ADMs. All budget units containing location codes 770-779 must be zero prior to submitting cycle 1.

8. Costs associated with Criminal Background checks must be charged to function code 2576. This function code will apply to costs pertaining to both certified and classified personnel.

9. Activities, other than Food Services, where the intent is to finance or recover the costs primarily through user charges must be charged to function 3200-3299, Other Enterprise Operations. (Food Service operations are in 3100-3199) Examples of expenditures charged to function 3200-3299 include bookstore purchases, fund-raiser purchases for resale, and concession stand inventory.

10. Purchased services for substitute classroom teachers must be charged to object codes 63220-63229 and to the function code that best describes the need for the substitute. As a general rule, the same Fund, Source of Fund, Function, Location, Program, and Subject Area used for the contracted classroom teacher is also to be used for the substitute teacher. One exception to that general rule is if the regular teacher is absent for the purpose of attending professional development. In that case, function 2213 must be used with the appropriate Fund and Source of Fund code.

11. To be consistent with other salary object codes and to provide a distinction between certified and classified salaries, object code 61950, Annuity is to be used for Certified personnel and 61951, Annuity for Classified Personnel.

12. A greater level of detail will be required for legal fees. The following object codes are required for 2007-2008:

a. 63440-Legal, Defense of District
b. 63441-Legal, Representation of District as Plaintiff
c. 63442-Legal Opinions and Advise
d. 63443-Legal Document Preparation

House Bill 2656 has not been enacted as of this writing but if enacted, additional financial and student coding will be required for 2007-2008. If House Bill 2656 becomes law, required coding changes will be developed and communicated as soon as possible. Some of those new coding requirements will include tracking expenditures made from Student Growth and Declining Enrollment revenue. This will likely require a Source of Fund code to be used for these revenues and the expenditures from these revenues.

The new Financial Accounting Manual for Arkansas Schools and Educational Service Cooperatives for 2007-2008 is posted on the APSCN web site at School Business/Financial Officers should review this manual early in the budgeting process for 2007-2008. In addition to changes to implement the new requirements stated above, optional object code 66999 (Low Value Equipment) has been removed due to a duplication with object code 66107.

The APSCN Exceptions Report should be printed periodically between now and year-end in order to help identify coding errors that must be corrected prior to submitting cycle 1. The Exceptions Report is based on the AFRB Coding Specifications that can also be found on the APSCN web site. All possible coding errors will not be identified by the Exceptions Report. School Districts and Cooperatives are responsible for complying with all coding requirements, even if the requirements are not included in the Exceptions Report program.


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