ADE Director's Communication Memo Form

Memo Number : COM-08-128

Date Created : 06/24/2008


Co-op Directors
other: General Business Managers

Type of Memo: Informational
Response Required: No
Section:   APSCN - Bill Goff, Director
Non-Cash Transactions

Regulatory Authority:
Ark. Code Ann. 6-20-402

Contact Person:
Kathleen Crain

Phone Number:


School Districts and Education Service Cooperatives often engage in non-cash transactions that if not recorded, understate the revenue and expenditures reported to the Arkansas Department of Education (ADE). For example, school food service programs receive food commodities that have a stated value. For purposes of audited financial statements, the value of the commodities received must be included in Food Service Revenue. Also, since those commodities are used to offset food cost, the value of the commodities must be included in expenditures. Auditors normally record this transaction but school districts have seldom recorded and included it in financial data submitted to the ADE.

Another non-cash transaction that often is not included in school district records involves post-dated warrants, installment contracts and lease-purchase agreements in cases where the financing entity makes direct payment for the goods or services received by the school district. When the loan proceeds are not deposited by the school district, it is necessary to post a Journal Entry that records the loan proceeds as well as the expenditures made from those proceeds. All post-dated warrants, installment contracts, and lease-purchase agreements must be registered with the Loans and Bonds Unit of the Arkansas Department of Education. The Loans and Bonds Unit will answer any questions and will provide registration forms (see attachment) upon request.

Non-cash transactions for 2007-2008, and subsequent years, must be recorded by school districts and cooperatives. Examples showing the accounting codes that should be used are attached to this memo.


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