Current through Register Vol. 50, No. 3, March 20, 2024
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.
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
17:6(A)(10).
