UNDERSTANDING THE

BOARD SECRETARYAND TREASURER

REPORTS

Juanita A. Petty, RSBAWayne 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-to-

actual status• To monitor cash• To ensure that the District’s accounting system

is in balance

ACCOUNTING BASICSASSETS: 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 continuedLIABILITIES: 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 Fund11: general current expense12: 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 SHEETContains two sections:

Assets and Resources Section

Liabilities and Fund Equity Section

REMEMBER:Assets/Resources MUST EQUAL Liabilities + Fund Equity

Balance Sheet AccountsAsset Accounts 101 Cash102-106 Cash Equivalents (petty cash)111 Investments116-118 Reserve Accounts121 Tax Levy Receivable132 Interfund Receivable141 Intergovernmental Receivable – State142 Intergovernmental Receivable – Federal143 Intergovernmental Receivable - Other153 Other Receivables

Balance Sheet AccountsLiabilities Accounts 411 Intergovernmental Accounts Payable – State421 Accounts Payable

Fund Balance Accounts 753 Reserve for Encumbrances – Current754 Reserve for Encumbrances – Prior761 Reserved Fund Balance – Capital Reserve770 Unreserved Fund Balance

Report of the Board SecretaryFor the Month: _________

Assets: Cash 1,000Investments 100Capital Reserve 5,000

Receivables 0Total Assets: 6,100

Liabilities: Accts. Payable 500Fund Balance: Res. For Encumbr. 2,100

Unreserved 3,500Total Liab + FB: 6,100

INTERIM STATEMENTSProvide 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 StatementsSchedule 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 ReportThree 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 TreasurerFor the Month: ___________

Funds BeginningCash Balance

Cash Receipts

CashDisbursement

Ending Cash Balance

Fund 10 5,000 1,500

400 6,100

Fund 20 100

100 50 150

Fund 30 1,000 2,000 1,000

2,000

Fund 40 5,000

5,000

0 10,000

TOTAL 11,100

8,600 1,450

18,250

Fund 60 500

100 500 100

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?