UNDERSTANDING THE BOARD SECRETARY AND TREASURER REPORTS Juanita A. Petty, RSBA Wayne Township Board of Education PURPOSE • To provide overall summary of financial activity and a picture of the District’s financial status • To provide assurance that estimated revenues are being realized to support current operations • To provide a better awareness of the budget-toactual status • To monitor cash • To ensure that the District’s accounting system is in balance ACCOUNTING BASICS ASSETS: Items owned by the District Normally have “debit” balances Current Assets include: • Cash • Investments (NJ Cash Management, CD’s) • Capital Reserve Account • Maintenance Reserve Account • Receivables (tax levy, tuition, state aid) • Resources: Unrealized Revenues (estimated-actual revenues) Basics continued LIABILITIES: Amounts owed by the District Normally have “credit” balances Current liabilities include: • Accounts payable • Contracts payable • Those debts the District expects to pay within a year or less ESSENTIAL LAWS OF ACCOUNTING DEBITS = CREDITS ASSETS = LIABILITIES + FUND BALANCE ASSETS – LIABILITIES = FUND BALANCE FUND ACCOUNTING * Fund 10 – General Fund 11: general current expense 12: capital outlay (items over $2K) 13: special schools * Fund 20 – Special Revenue Fund (entitlement grants) Fund Accounting continued * Fund 30 – Capital Projects Fund (funds construction costs) * Fund 40 – Debt Service Fund (cashier to pay bond principal/interest) * Fund 60 – Enterprise Funds (food service, support services) * Fund 90 – Trust and Agency Funds REPORT ORGANIZATION • Interim Balance Sheet • Interim Statements comparing budgeted revenue with Actual-to-date and Appropriations with Expenditures and Encumbrances-to-date • Schedule of Revenues – Actual Compared with Estimated • Statement of Appropriations Compared with Expenditures and Encumbrances INTERIM BALANCE SHEET Contains two sections: Assets and Resources Section Liabilities and Fund Equity Section REMEMBER: Assets/Resources MUST EQUAL Liabilities + Fund Equity Balance Sheet Accounts Asset Accounts 101 102-106 111 116-118 121 132 141 142 143 153 Cash Cash Equivalents (petty cash) Investments Reserve Accounts Tax Levy Receivable Interfund Receivable Intergovernmental Receivable – State Intergovernmental Receivable – Federal Intergovernmental Receivable - Other Other Receivables Balance Sheet Accounts Liabilities Accounts 411 Intergovernmental Accounts Payable – State 421 Accounts Payable Fund Balance Accounts 753 754 761 770 Reserve for Encumbrances – Current Reserve for Encumbrances – Prior Reserved Fund Balance – Capital Reserve Unreserved Fund Balance Report of the Board Secretary For the Month: _________ Assets: Cash Investments Capital Reserve Receivables Total Assets: 1,000 100 5,000 0 6,100 Liabilities: Accts. Payable Fund Balance: Res. For Encumbr. 2,100 Unreserved 3,500 Total Liab + FB: 500 6,100 INTERIM STATEMENTS Provide the first layer of detail of the amounts shown in the general ledger budgetary control account balances. There are two parts: Revenues Section – budget estimated, actual, over/under, and unrealized balance Expenditures Section – appropriations, expenditures, encumbrances, and available balance Revenue Statement • Contains “summarized” information as of date of report • Budget Estimated Column is the budgeted amount, including revisions (adjusted budget) • Actual Column is actual amount recognized to date • Over/(Under) Column reflects whether actual to date is greater than or lesser than budgeted • Unrealized Balance Column shows the difference between the budgeted and actual amounts Positive amount – will still be recognized Negative amount – actual has exceeded the budgeted amount Expenditures Statement • Contains “summarized” information as of date of report • Presented at function level – same as advertised budget • Appropriations Column reflects budgeted amount, including revisions (adjusted budget) • Expenditures Column reflects the expenditures when purchase orders are closed and paid • Encumbrances Column reflects outstanding commitments, either open orders or contracts • Available Balance Column is the balance left after the Expenditures Column and Encumbrances Column are subtracted from the Appropriations Column (uncommitted amount; funds available) Detail Statements Schedule of Revenues Contains detail of Interim Revenue Statement Statement of Appropriations Contains detail of Interim Expenditures Statement Variations to Report • Reports for other Funds (Special Revenue 20, Capital Projects 30, Debt Service 40) are more summarized • They do not include Interim Statements Balancing Details • Total Assets MUST equal total liabilities + fund balance • Actual revenues, expenditures and encumbrances MUST match on all sections of the report • Revenue Account (302) = Total of Actual Revenue • Encumbrances (603) = Reserve for Encumbrances (753/4) • Encumbrances (603) = Total Encumbrances on the Expenditure Report and Open Purchase Order Report • Expenditure Account (602) = Total Expenditures on Expenditure Report Timelines • Secretary Report monthly • Treasurer Report monthly • Recommended timeline – example: Bank statements received beginning of October for month of September. Reports would be submitted to Board for approval at the end of October Nonconformance to this timeline results in an audit recommendation What if it’s not in balance? • Transaction may be have posted to the wrong Fund • If you’ve done a journal entry, you may have to do the transaction through the budget, revenue or purchase order module rather than the general ledger • If you’ve added a new account in your general ledger, you must ensure that it is properly set up to reflect in your Board Secretary’s Report • Check to be sure all reports were run at the same time and on the same date • Electrical problems could create a surge that affected a transaction as you posted it Treasurer Report • Basically a monthly bank reconciliation • Details cash receipts and cash disbursements • Includes all Governmental Funds – 10, 20, 30 and 40 • Includes Enterprise Funds (60) • Includes Trust and Agency Funds (90) Format of Report Three Sections: • Governmental Funds • Enterprise Funds • Trust & Agency Funds Four Columns: • Beginning Cash Balance • Cash Receipts This Month • Cash Disbursements This Month • Ending Cash Balance Report of the Treasurer For the Month: ___________ Funds Beginning Cash Balance Fund 10 5,000 Fund 20 Cash Receipts Cash Disbursement Ending Cash Balance 1,500 400 6,100 100 100 50 150 Fund 30 1,000 2,000 1,000 2,000 Fund 40 5,000 5,000 TOTAL 11,100 8,600 1,450 100 500 Fund 60 500 0 10,000 18,250 100 Payroll 0 10,000 10,000 0 Agency 0 5,000 3,800 1,200 Reconciling to Secretary Report • Compared on Fund by Fund basis • Ending Cash Balance on Treasurer Report MUST equal Cash and Cash Equivalents on Secretary’s Report • For Fund 10, also include Investments and Reserve Accounts in cash total What if they don’t match? Similar to balancing your checkbook… • Verify timing differences – make sure all deposits are recorded in the correct period; otherwise, detail as deposits in transit • Verify outstanding checks to be sure they are included or have been removed if cleared by the bank Matching cont’d • Make sure that interest has been posted during the period • Be sure to verify that a transaction was not posted to the wrong Fund QUESTIONS?