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BARS Cash Manual

 

General Ledger Accounts

1.2 General Ledger Accounts

1.2.10 The specific account numbers contained here are not prescribed, as long as equivalent detail is maintained. However, this general ledger has been carefully designed to meet several needs. Use of general ledger accounts in cash basis governments is OPTIONAL.

1.2.20 First, the accounts provide for detailed identification of assets, deferred outflows, liabilities, deferred inflows and fund balances and net position that any local government fund might acquire. Throughout the general ledger, the fifth and subsequent digits have been left for local governments to use in establishing more detailed breakdowns where needed.

1.2.30 Second, the general ledger has been designed to permit logical summarization of the detailed accounts at various levels. The table which follows on the next few pages illustrates in detail the structure of the general ledger. In general, the outline is as follows:

1.2.40 Third, the comprehensiveness of the general ledger combined with the uniform summarization outlined above is designed to make the preparation balance sheets a simple matter of extracting the balances at the same level for all the funds of a government. The headings on the chart which begins on the next page identify which digits to sort or summarize by for reporting purposes. The presentation of the balance sheet is structured in similar manner as the general ledger accounts.

  • The first digit identifies whether the account is an asset or a liability/fund balance or net position account (e.g., 1 or 2).
  • The second digit is used to categorize the major classification of assets, liabilities, fund balance, and net position. The outline on the previous page identifies these major classifications, which are used as subheadings on the balance sheet.
  • The third digit defines the reporting level for all assets and liabilities. In the fund balances/net position section, some subaccounts are combined for reporting purposes: accounts 276-278 and 281-283.
  • The fourth digit defines the prescribed accounting detail in the BARS general ledger. Ordinarily, this level of detail is not shown on the financial statements.

1.2.50 Finally, the BARS general ledger contains a set of optional control accounts that can be used to monitor budgetary and actual revenue and expenditure/expense account balances. These accounts summarize subsidiary ledger transactions and, depending on the amount of detail that a government elects to use, these control accounts will segregate and classify those transactions as they occur. The budgetary control accounts (291) provide a convenient summary of the total budget of a fund and of the amendments that have been made since the original budget was adopted. Much of the segregation illustrated in the control accounts can be automated by establishing rules by fund or fund type for which subsidiary accounts are summarized in each control account. Updating these control accounts, operating statements, and transferring the balance to the actual fund balance/net position accounts in the 270-280 series can then be done automatically as the subsidiary ledgers are posted.

ASSETS

110-14X CURRENT ASSETS

Include those assets which will be used up or converted into cash within the next operating cycle (e.g., twelve months).

111. Cash and Cash Equivalents

111.10 Cash

Money, negotiable money orders and checks, and balances on deposit with financial institutions after deducting outstanding checks. Include deposits in transit. Do not include petty cash items (see below). Also, for reporting purposes, do not include proprietary fund cash that may be used only for noncurrent purposes (account 150, Restricted Assets). Do not include time deposits or pass book savings accounts. Compensating balances should be disclosed parenthetically or in a note.

111.40 Cash in Treasury Pool Investments (Optional)

This account provides for optional segregation of those amounts of money not invested for a specific fund but included in treasury surplus and invested on behalf of the municipality.

111.70 Petty Cash

Any sum of money or other resources set aside for such specific purposes as minor disbursements, making change, and similar uses.

111.71 Change Funds (Segregation Optional)
111.74 Advance Travel (Segregation Optional)
111.77 Other Imprest Funds (Segregation Optional)

115. Deposits with Fiscal Agents/Trustees

115.10 Deposits with Internal Fiscal Agency (Optional)

This account provides for optional segregation of moneys set aside within the treasury to pay matured bonds and interest.

115.11 Cash (Segregation Optional)
115.12 Investments (Segregation Optional)

115.20 Deposits with External Fiscal Agents

Deposits with fiscal agents, such as commercial banks, for the payment of matured bonds and interest.

115.21 Cash (Segregation Optional)
115.22 Investments (Segregation Optional)

115.40 Deposits with Internal Bond Refunding Trustee

This account provides for optional segregation of moneys set aside within the treasury to invest and accumulate for eventual payment of interest and principal on refunded bonds when called or matured. Do not include any amounts in these accounts in the financial statements.

115.41 Cash (Segregation Optional)
115.42 Investments (Segregation Optional)

115.50 Deposits with External Bond Refunding Trustees

Deposits with bond refunding trustees, such as commercial banks, to invest and accumulate for eventual payment of interest and principal on refunded bonds when called or matured. Do not include any amounts in these accounts on the financial statements.

115.51 Cash (Segregation Optional)

115.52 Investments (Segregation Optional)

115.70 Other Internal Trusts (Not in Treasury)

Moneys held by municipal officials outside the main treasury on behalf of private individuals or organizations, or until ultimate disposition is determined. Include both cash and investments.

115.71 Court Trust (Segregation Optional)

115.72 Prisoner’s Cash (Segregation Optional)

115.90 Other External Trusts

Deposits with fiduciaries including banks, brokers and insurance companies made on behalf of private individuals or organizations.

115.92 Escrow Accounts (Segregation Optional)

118. Investments

Include all securities and other assets acquired primarily for the purpose of obtaining income or profit. Investments should be reported at fair value (for exceptions see the GASB Statement 31).

Investments with original maturities of three months or less may be considered cash equivalents and accounted for in the G.L. account 111.

Do not include investments restricted for specific purpose in proprietary funds (see account 150). Purchased interest should be posted to the revenue account 361.90 (G.L. account 292.10).

The government may use unassigned fourth and fifth digits to establish more detailed breakdowns for the accounting purposes.

121. Taxes Receivable (Net)

121.10 Taxes Receivable (Current Portion)

Include the uncollected portion of property tax which a government has levied and for which the due date has not yet passed. Also include any amounts of other uncollected taxes (see BARS 310 series) that are measurable and available. Do not include interfund receivables (see account 131).

121.30 Taxes Receivable (Delinquent)

Include taxes remaining unpaid on and after the date on which interest is assessed or a penalty for nonpayment attached. This segregation from current taxes is required only for the municipality which is the tax collection agent.

121.50 Interest Receivable on Taxes (Optional Segregation)

Include the uncollected portion of interest receivable on taxes. Include accruals to the end of the fiscal period.

121.70 Penalties Receivable on Taxes (Optional Segregation)

Include the uncollected portion of penalties receivable on taxes. Include accruals to the end of the fiscal period. Penalties assessed for failure to list personal property must be separately identified since they are distributed with taxes rather than remitted to the county general (current expense) fund (RCW 84.56.020(8)).

121.90 Allowance for Uncollectibles (Credit)

A valuation account used to indicate that portion of taxes and related interest and penalties which it is estimated will never be collected.

122. Customer Accounts Receivable (Net)

122.10 Accounts Receivable

Amounts due from customers on open account for goods and services provided. Significant receivable balances not expected to be collected within one year of the date of financial statements should be disclosed in the notes.

122.70 Unbilled Receivables

Amounts earned by the entity for goods or services furnished to private individuals or organizations for which billings have not been prepared at the end of the reporting period.

122.90 Allowance for Uncollectibles (Credit)

A valuation account used to indicate that portion of customer accounts which it is estimated will never be collected and will eventually be written off.

123. Special Assessments Receivable

123.10 Assessments Receivable (Current Portion)

Include the uncollected portion of special assessments which a governmental unit has levied and which are due within 60 days (for governmental funds). Exclude interfund assessments which should be reported in account 131. Also exclude any assessment accounted for in a proprietary fund, which should be reported in account 151.40.

123.30 Assessments Receivable (Delinquent)

Include the uncollected portion of special assessments which are past due. Exclude interfund assessments, which should be reported in account 131. Also exclude any assessment accounted for in a proprietary fund, which should be reported in account 151.50.

123.50 Interest Receivable on Assessments

Include the uncollected portion of interest receivable on special assessments in governmental funds. (Use account 151.60 for proprietary funds).

123.70 Penalties Receivable on Assessments

Include the uncollected portion of penalties receivable on special assessments in governmental funds. (Use account 151.70 for proprietary funds).

124. Interest Receivable

Interest earned on investments, notes, contracts and miscellaneous receivables. Do not include interest on taxes or special assessments. (See accounts 121.50 and 123.50).

125. Notes/Contracts Receivable (Current Portion)

Include current amounts due from private individuals or organizations evidenced by a written promise to pay. In governmental funds, use the account only for that portion due by the end of the current fiscal period; in proprietary funds, use this account for that portion due within the next 12 months.

126. Other Current Receivables (Net)

126.10 Receivable From Developers

Include amounts of impact or developers fees or reimbursable charges for services receivable from private developers.

126.20 Rent Receivable

126.40 Other

126.90 Allowance for Uncollectibles (Credit)

131. Due from Other Funds

A receivable for goods issued, work performed or services rendered to or for the benefit of another fund of the same government. Also use this account for subsidies and other transfers between funds that have been authorized but not yet paid. The owing fund should have an equal amount recorded under account 225. Include receivables between a primary government and blended component units.

132. Interfund Loans Receivable

Include the uncollected amounts of interfund loans. See Loans.

134. Due from Other Governments

Include amounts due to the reporting government from another government. These amounts may represent measurable and available intergovernmental grants, entitlements, or shared revenues; grants or taxes collected for the reporting government by an intermediary collecting government; loans; and charges for services rendered by the reporting unit for another government. Receivables for services that are not governmental in nature, such as insurance, utilities, rents, repairs, and supplies, should not be included here. Use account 122.

135. Due from Component Units

Amounts due to the reporting entity from discretely presented component units. The receivables from blended component units are presented in 131. Some transactions and balances previously recorded in 131 or 134 may need to be reclassified for presentation in the reporting entity (primary government) financial statements. The owing component unit(s) should have an equal amount recorded in 228.

136. Due from Primary Government

Include amounts due to the discretely presented component unit(s) from the primary government. The owing reporting entity (primary government) should have an equal amount recorded in 226. For details, see GAAP Reporting Requirements.

141. Inventories

Use this account for the cost of all stock-in-trade items acquired for sale to private individuals, to other governments, or to other funds and departments. Also include the cost of stockpiled raw materials for use in manufacture and the cost of finished goods manufactured by your government for sale. (Use account 145 to accumulate the costs of manufacturing these items.) The accounts may be subdivided to distinguish different kinds or grades of inventories, or a subsidiary ledger may be used.

General administrative and office supplies which will be consumed in routine operations should not be included in this account (see account 143.40). Merchandise and materials that are put to use as soon as they are acquired need not be charged to this account; however, all Work in Process should be closed to 141.7X and expensed from there.

141.10 Merchandise

Generally, goods supplied from vendors in the form and condition they will be used.

141.40 Raw Materials

This account includes material that may be used in a manufacturing process or as is, such as lumber, paint, and rock.

141.70 Finished Goods

This account is used for completed items that have been manufactured by your government (see account 145).

143. Prepayments

143.10 Insurance

Unexpired portion of insurance premiums (it is not necessary to record insurance prepayments except in proprietary funds).

143.40 Operating Supplies

Cost of stationery and office supplies held for use in routine operations. Use this account only if material amounts of supplies are on hand at the end of the reporting period. Do not include supplies acquired for sale (see account 141.10). For governmental funds, the offsetting credit is the account 282.50, Reserve for Prepaid Items. Note that the expenditure should not be reversed.

143.70 Other Prepayments

145. Other Current Assets

145.10 Work in Process

This account is used to accumulate the costs of manufacturing items for resale to private individuals, other governments, or other funds and departments. It is not used for capital construction (see 189.). Items manufactured for immediate internal use need not be charged to this account.

The various optional subaccounts are used to segregate the total costs to produce such items as crushed rock, asphalt, road signs, rebuilt parts, printing jobs, and other merchandising, jobbing and contract work. When the manufacturing process is complete, the total costs should be transferred to account 141.7X. For financial reporting, include all incomplete work orders not classified as construction in progress.

The accounts may be subdivided to distinguish different types of projects, or a subsidiary work order system may be used.

145.11 Raw Materials Put in Process (Segregation Optional). Include materials used in manufacture, either transferred from account 141.4X or directly purchased as they are needed.

145.13 Direct Labor (Segregation Optional). Include labor costs incurred by your government and related fringe benefits.

145.15 Equipment Charges (Segregation Optional). Include rental charges on equipment, whether paid to another department or fund or to an outside vendor.

145.17 Contracted Services (Segregation Optional). Include payments to vendors which do part or all of the processing of raw materials owned by your government. Examples include contracts for crushing rock from government-owned quarries and printing or fabrication jobs where part of the work is done in-house and part by an outside contractor.

145.19 Other Overhead (Segregation Optional). Include the cost of services and supplies other than those which may be properly included in the foregoing accounts. When labor or equipment rates include overhead, there is no need to accumulate a separate amount to charge to this account.

145.40 Other

150. RESTRICTED ASSETS

Restricted assets are those proprietary fund monetary assets which have their use limited by statute, bond covenant, or other contractual or trust relationship. For reporting purposes, restricted assets must be shown in account 150, although they may be accounted for during the year in separate funds, using current asset accounts (111, 118, 123, etc.). Separate funds are not required for restricted assets, even though bond covenants may stipulate a bond reserve fund, construction fund, etc. The bond covenant use of the term fund is not the same as the use in governmental accounting. For bond covenants, fund means only a segregation or separate account, not a self-balancing set of accounts. Most restricted assets are offset by corresponding current liabilities (accounts 241-245, Current Payable from Restricted Assets), non-current liabilities (accounts 246-248, Non-Current Payable from Restricted Assets), or by a restriction of net position (account 284.20). The common exception is bond proceeds received for construction purposes, which are separately categorized as construction account restricted assets and for which there is no offsetting current liability or net position.

It is not necessary to include cash with fiscal agents in the restricted assets category. It is acceptable to have two Deposits with Fiscal Agent accounts, but it is not necessary either. These amounts are offset by matured payables and the BARS treat both fiscal agent cash and related payables as current items in all funds, because the account titles are sufficient to indicate the limited use of the assets.

Assets restricted for debt service should include money set aside to pay current principal and interest on outstanding debt and money earmarked for deficiencies or contingencies and normally not used until the final retirement of the debt issue. Deposits include customer deposits and must be offset by account 245.10 or 248.10. Replacement accounts include renewal, replacement and emergency moneys that covenants or agreements require to be set aside.

151. Current Restricted Assets – Debt Service, Deposits and Replacements

151.10 Cash And Cash Equivalents

151.20 Investments

151.40 Utility Special Assessments Current

151.50 Utility Special Assessments Delinquent

151.60 Utility Special Assessments Interest

151.70 Utility Special Assessments Penalties

151.90 Other

152. Current Restricted Assets – Landfill Closure and Postclosure Care Costs
(RCW 70.95.215)

155. Current Restricted Assets ‑ Construction Accounts

155.10 Cash and Cash Equivalents

155.20 Investments

155.90 Other

156-197 NON-CURRENT ASSETS

156. Non-Current Restricted Assets – Debt Service, Deposits and Replacements

156.10 Cash and Cash Equivalents

156.20 Investments

156.40 Utility Special Assessments – Current

156.50 Utility Special Assessments – Delinquent

156.60 Utility Special Assessments – Interest

156.70 Utility Special Assessments – Penalties

156.90 Other

157. Non-Current Restricted Assets – Landfill Closure and Postclosure Care Costs
(RCW 70.95.215)

158. Non-Current Restricted Assets – Construction Accounts

158.10 Cash and Cash Equivalents

158.20 Investments

158.90 Other

161. Special Assessments – Non-Current

Include the uncollected portion of special assessments not due for 60 days (governmental funds) or l year (proprietary funds). Exclude interfund assessments which should be reported in account 165. In assessments accounted for in proprietary funds, make certain that all collections are recorded as restricted assets. The current portion and related interest and penalties should be recorded in account 123 (for governmental funds) or account 151 (for proprietary funds).

163. Notes/Contracts Receivable

Noncurrent amounts due from private individuals or organizations evidenced by a written promise to pay, including receivables on capital and financing leases. The current portion should be recorded in account 125.

165. Advances to Other Funds

The uncollected amounts of long-term interfund loans; that is, loans which do not meet the criteria of temporary defined in the Loans. Also include the amount of unearned assessments owed by other funds of the same government.

167. Investment in Joint Ventures (Net)

A joint venture is a legal entity or other organization that results from a contractual arrangement and that is owned, operated, or governed by two or more participants as a separate and specific activity subject to joint control, in which the participants retain (a) an on going financial interest or (b) an ongoing financial responsibility. The municipality’s investment should be accounted for using the equity method, if the investment is material.

170-191 CAPITAL ASSETS

Those assets acquired by the municipal corporation for its own use through purchase, lease, self-construction, donation, or gift, with a life expectancy of more than one year. In addition to land, buildings and equipment, capital assets also include land and air rights, depletable resources such as minerals or timber, improvements made to rented property and the cost of partly-completed capital projects.

In regulated utilities and certain other enterprise funds, plant facilities are primarily classified as to mode (facility type), e.g., source of supply, treatment plant, etc. Within these modes, the assets are segregated into categories of land, buildings, equipment, and other improvements. In the BARS, this scheme is reversed so that all the capital assets of a government can be classified the same way. In the optional detail accounts, the 5th digit can be used by utilities to identify plant-in-service modes. The same digit (and the 6th and 7th digits) may be used for other proprietary funds and for general government capital assets to segregate them by function or purpose.

171. Land (Net)

172‑173 Buildings and Structures (Net)

174. Capital Leases (Net)

175. Leasehold Improvements (Net)

176‑179 Other Improvements (Net)

181‑188 Machinery and Equipment (Net)

189. Construction in Progress

191. Intangible Assets (Net)

Include assets with no physical substance, such as a patent or license, with a useful life that exceeds one year.

191.10 Plant Acquisition Adjustments

Used only in utilities, this account includes the difference between the cost to the current governmental owner and the cost incurred by the person or company that first devoted the property to utility service.

191.30 Franchises and Licenses

Amounts paid to procure franchises, consents, licenses, or certificates of permission and approval, whether in perpetuity or for a specified term of more than one year, that give a government authority to operate certain facilities. Include related legal and filing expenses. Annual or other periodic payments under franchises should be charged to operating expenses. (For utilities, see also 191.7X.)

191.50 Computer Software

Amounts paid to acquire or develop data processing programs and related documentation. The cost of programs developed for sale to others must be expensed as incurred; only those programs developed or acquired for internal use may be capitalized. (The existence of this account is not meant to imply that any software costs must be capitalized, only that they may be.)

191.70 Other Intangible Assets

Include any amount paid by a utility to the assignor of a franchise that exceeds the amount paid by the original grantee.

191.90 Accumulated Amortization (Credit)

The amount of original cost of intangible assets which has already been charged against revenue (or as a use allowance) since the date of acquisition.

193-198 OTHER NONCURRENT ASSETS (NET)

193.10 Investments

Include all securities and other assets acquired primarily for the purpose of obtaining income or profit. Investments should be reported at fair value (for exception, see the GASB Statement 31).

Do not include investments restricted for specific purpose in proprietary funds (see account 150). Purchased interest should be debited to the revenue account 361.90 (G.L. account 292.10).

193.11 Unamortized Premiums on Investments. The unamortized portion of the excess of the amount paid for securities over their face value (excluding accrued interest).

193.12 Unamortized Discounts on Investments (Credit). The unamortized portion of the excess of the face value of securities over the amount paid for them (excluding accrued interest).

193.40 Property Held in Trust or for Future Use

Include nonmonetary property acquired by distraint, foreclosure or default, record at the amount of the tax lien. Use the purchase price for land acquired for a future plant site.

193.50 Pension Asset

The cumulative difference between the employer contribution to a pension plan and the annual pension cost.

193.70 Capital Assets Held for Resale

Include capital assets which have been declared surplus but are still owned by the government until they can be sold, traded, or otherwise disposed.

193.90 Accumulated Depreciation/Amortization (Credit)

195. Other Non-Current Assets

Not regularly recurring noncapital costs of operation that benefits future periods.

195.50 Extraordinary and Other Property Losses

This account is used only in proprietary funds to account for any expenses not recognized as a cost of operations of the period in which incurred, but carried forward to be written off in one or more future periods.

198. Deferred Outflows of Resources

A consumption of net assets by the government that is applicable to a future reporting period. This account should include transactions related to accumulated decrease in fair value of hedging derivatives, deferred amount on refunding [the unamortized difference between the net carrying amount of the debt and its reacquisition price (when the reacquisition price exceeds the net carrying amount – loss on refunding)], grants paid in advance, pension. The categories should be detailed in the financial statements.

LIABILITIES

210-23X CURRENT LIABILITIES

Include liabilities which are payable within next operating cycle (e.g., twelve months).

211. Warrants Payable

The amount of operating warrants issued and outstanding. This account will be credited when warrants are issued and debited when warrants are redeemed or canceled. Do not use this account to record the issuance of revenue warrants (see accounts 235 and 263). Code cities using checks instead of warrants should not use this account.

213. Accounts/Vouchers Payable

213.10 Accounts Payable

Amounts not yet vouchered but owed on open account to private persons or organizations for goods and services furnished to a government (but not including amounts due to other funds or to other governments).

213.40 Vouchers Payable

Liabilities for goods and services evidenced by vouchers which have been pre-audited and approved for payment but not yet paid.

215. Claims and Judgments Payable

Amounts owed as compensation or payment for injury or damage. Include unpaid losses not covered by an insurance contract or bond and amounts owed as the result of court decisions, such a condemnation awards for private property taken for public use.

217. Matured Long-Term Obligations Payable

Include the portion of all long-term debt which has become due. For explanation of the specific categories below, see accounts 251, 252, 253 and 263.

217.10 G.O. Bonds Payable

217.20 Revenue Bonds Payable

217.30 Special Assessment Bonds Payable

217.40 Revenue Warrants Payable

217.50 Leases and Installment Purchases Payable

217.90 Other

219. Matured Interest Payable

Include interest due on long-term debt. For interest accrued between due dates, use account 231.10.

221. Annuities Payable

Include pension benefits due and payable to retired employees in a public employee retirement system.

223. Contracts Payable

223.10 Construction Contracts Payable

Include amounts of progress payments due for construction of buildings and other improvements. If the amounts earned by contractors at the end of the fiscal period are material, they should be estimated and accrued if a progress billing is not available.

223.40 Retainage Payable

Include amounts due on construction contracts, representing a percentage of the progress billings. These amounts are not paid until final inspection, the lapse of a specified time period, or both. (RCW 50.24.130 and Chapter 60.28 RCW) Include amounts deposited to escrow accounts (see account 115.92) as well as amounts held in the municipal treasury.

223.70 Interest on Contracts Payable

Use this account to accumulate interest on retainage when requested by the contractor (RCW 60.28.010).

223.90 Other Contracts Payable

225. Due to Other Funds

A payable for goods issued, work performed or services rendered from or by another fund of the same government. Also use this account for subsidies and other transfers between funds that have been authorized but not yet paid. The recipient fund should have an equal amount recorded under account 131. Include payables between a primary government and blended component units.

226. Due to Component Units

Include amounts due to discretely presented component units from the primary government. The payables to blended component units are presented in 225. Some transactions and balances previously recorded in 225 and 229 may need to be reclassified for the presentation in the reporting entity (primary government) financial statements. The recipient component unit(s) should have an equal amount recorded in 136.

227. Interfund Loans Payable

The amounts of interfund loans not yet repaid. See Loans for further definition.

228. Due to Primary Government

Amounts due to the primary government from discretely presented component unit(s). The payables of blended component unit(s) are presented in 225. An equal amount should be recorded in 135. For details, see GAAP Reporting Requirements.

229. Due to Other Governments

Current amounts due to other governments. These amounts may represent intergovernmental grants or entitlements; loans; and charges for services rendered by another government. Payables for services that are not governmental in nature, such as insurance, utilities, rents, repairs, and supplies, should not be included here. Use account 213 or 231.

231. Other Accrued Liabilities

These are amounts of expenses/expenditures that have been incurred by the end of the fiscal period but will become payable at a future date. Do not include accruals for claims and judgments, annuities, or construction contracts in this account. See accounts 215, 221, and 223.

231.10 Interest Payable

Interest earned by creditors, including bondholders, since the last payment or coupon date.

231.20 Arbitrage Rebate Tax Payable

The interest earnings accrued at the end of the 5th year and due and payable to the U.S. Treasury. See Arbitrage Rebates.

231.30 Accrued Wages

Wages earned by employees since the last payroll. Include the current portion of the unpaid liability for employee absences (vacation and other accruable leave). Use account 259 to record the long-term liability for compensated absences.

231.50 Accrued Employee Benefits

Estimated benefits associated with accrued wages, account 231.30. Include payroll taxes.

231.70 Accrued Taxes

Estimated taxes that are not directly associated with other specific liability accounts, such as B&O taxes or excise taxes. Do not include payroll taxes (see account 231.50).

231.90 Other

235. Current Portion of Long-Term Obligations

The unmatured portion of all long-term debt which will become due within one year (proprietary funds) but which is not yet due and which will require current assets to redeem (see account 240 for the current portion of long-term debt payable from restricted assets). Do not include any portion of refunded debt. Special rules apply to certain types of intermediate-length financing (see accounts 239.60 and 263.60). For explanations of the other specific types of debt, see accounts 251, 252, 253 and 263.

235.10 G.O. Bonds Payable

235.20 Revenue Bonds Payable

235.30 Special Assessment Bonds Payable

235.40 Revenue Warrants Payable

235.50 Leases and Installment Purchases Payable

235.70 Other Notes Payable

235.90 Other

237. Custodial Accounts

A liability account for the net monetary assets held by a governmental unit in a trustee capacity or as a custodian for individuals, private organizations, other governmental units, or other funds. Include such items as sales and leasehold taxes collected for the state, prisoners’ cash, court trusts, contractors’ bonds (bid deposits), and suspense accounts (receipts pending classification and grants or taxes collected by the reporting government as an intermediary). County treasurers should use this account to offset the assets held in custodial funds for special purpose districts. Do not use this account for any fiduciary funds.

239. Other Current Liabilities

239.10 Customer Deposits (Nonproprietary)

Include liability for deposits made by customers as a prerequisite to receiving services. In proprietary funds use account 245.10 instead.

239.60 Anticipation Warrants/Notes

These are short-term financing instruments (Chapter 39.50 RCW). Include the entire principal of those notes and warrants unless the instruments were authorized in anticipation of a bond issue (see account 263.60). This debt should be treated as fund debt, even in governmental funds.

239.90 Other

241-245 CURRENT PAYABLE FROM RESTRICTED ASSETS

These accounts are used only in proprietary funds. Include the amounts of current liabilities and customer deposits for which the assets have been set aside as restricted in accounts 151-155. Do not include matured bonds or progress payments due to contractors; instead, the related assets should be treated as current and nonrestricted. For explanation of the specific types of debt, see accounts 239.60, 251, 252, 253, and 263.

241. Debt Principal Payable

241.10 Revenue Bonds Payable

241.20 Other Bonds Payable

241.40 Notes and Warrants Payable

242. Debt Interest Payable

245. Deposits and Other Payables

245.10 Deposits Payable

245.90 Other

246-260X NON-CURRENT LIABILITIES

246-248 NON-CURRENT PAYABLE from RESTRICTED ASSETS

These accounts are used only in proprietary funds. Include the amounts of current liabilities and customer deposits for which the assets have been set aside as restricted in accounts 156-158. Do not include matured bonds or progress payments due to contractors; instead, the related assets should be treated as current and nonrestricted. For explanation of the specific types of debt, see accounts 239.60, 251, 252, 253 and 263.

246. Debt Principal Payable

246.10 Revenue Bonds Payable

246.20 Other Bonds Payable

246.40 Notes and Warrants Payable

247. Debt Interest Payable

248. Deposits and Other Payables

248.10 Deposits Payable

248.90 Other

251. General Obligation Bonds Payable (Net)

251.10 G.O. Bonds at Face Value (for Capital Purposes)

The face value of all noncurrent bonds used for capital acquisitions and/or improvements for which the government has pledged its full faith and credit.

251.11 No Vote Required

251.12 Vote Required

251.15 Advance Refunding – Defeasance Method

251.16 Advance Refunding – Crossover Method

251.20 Unamortized Premium on G.O. Bonds

The unamortized portion of the excess of G.O. bond proceeds over their face value (excluding accrued interest and issuance cost; see G.L. account 195.30 for issuance cost).

251.30 Unamortized Discount on G.O. Bonds (Debit)

The unamortized portion of the excess of the face value of G.O. bonds over the amount received from their sale (excluding accrued interest and issuance cost; see G.L. account 195.30 for issuance cost).

251.40 G.O. Bonds at Face Value (for M and O Purposes)

The face value of all noncurrent bonds used for maintenance and operations (M and O) for which the government has pledged its full faith and credit.

251.41 No Vote Required

251.42 Vote Required

251.45 Advance Refunding – Defeasance Method

251.46 Advance Refunding – Crossover Method

251.90 Advance Refunded G.O. Bond Issues

The amount of any refunded bonds included in this account should not be reported in the financial statements. For further discussion, see Refunding Debt.

252. Revenue Bonds Payable (Net)

252.10 Revenue Bonds at Face Value (for Capital Purposes)

The face value of all revenue bonds used for capital acquisitions and improvements not due within one year.

252.11 No Vote Required

252.12 Vote Required

252.15 Advance Refunding ‑ Defeasance Method

252.16 Advance Refunding ‑ Crossover Method

252.20 Unamortized Premium

The unamortized portion of the excess of revenue bond proceeds over their face value (excluding accrued interest and issuance cost; see G.L. account 195.30 for issuance cost).

252.30 Unamortized Discount (Debit)

The unamortized portion of the excess of the face value of revenue bonds over the amount received from their sale (excluding accrued interest and issuance cost; see G.L. account 195.30 for issuance cost).

252.40 Revenue Bonds at Face Value (for M and O Purposes)

The face value of all revenue bonds used for maintenance and operations (M and O) and not due within one year.

252.41 No Vote Required

252.42 Vote Required

252.45 Advance Refunding – Defeasance Method

252.46 Advance Refunding – Crossover Method

252.90 Advance Refunded Revenue Bond Issues

The amount of any refunded bonds included in this account should not be reported in the financial statements. For further discussion, see Refunding Debt.

253. Special Assessment Bonds Payable (Net)

253.10 Special Assessment Bonds at Face Value

The face value of bonds issued for public improvements to be repaid (wholly or in part) from assessments levied against benefited properties. Bonds expected to be financed from special assessments should be recorded here even if the full faith and credit of the municipality is pledged.

253.11 LID Bonds

253.12 ULID Bonds

253.13 RID Bonds

253.14 Other Special Improvement Bonds

253.15 Advance Refunding – Defeasance Method

253.16 Advance Refunding – Crossover Method

253.20 Unamortized Premium

The unamortized portion of the excess of special assessment bond proceeds over their face value (excluding accrued interest and issuance cost; see G.L. account 195.30 for issuance cost).

253.30 Unamortized Discount (Debit)

The unamortized portion of the excess of the face value of special assessment bonds over the amount received from their sale (excluding accrued interest and issuance cost; see G.L. account 195.30 for issuance cost).

253.90 Advance Refunded Special Assessment Bond Issues

The amount of any refunded bonds included in this account should not be reported in the financial statements. For further discussion, see Refunding Debt.

255. Advances from Other Funds

The amounts of long-term interfund loans not yet repaid. Also include the amount of deferred assessments owed by a fund to other funds of the same government.

257. Unearned Revenue

Amounts recognized as receivables, including amounts due from other governments, which cannot be classified as revenues. Under the modified accrual basis of accounting, such amounts are measurable but not available. See the discussion of revenue accrual in Accrual of Revenues in Governmental Funds. Also include amounts collected that will not become revenues during the next fiscal year. For example, rental payment received for the last year of a lease running for several more years.

259. Compensated Absences

This account is used to record the noncurrent liability for employee absences. Such compensation should be recorded for all accrued vacation and for that portion of other leave, such as sick leave, for which the employee would be paid on termination. Use account 231.30 to record the current portion of these kinds of leave.

263. Other Noncurrent Liabilities

263.10 Claims and Judgments Payable

The noncurrent portion of amounts owed as compensation or payment for injury or damages.

263.20 Liability for Landfill Closure and Postclosure Care Costs

The estimated and accrued costs related to the closure of landfills in accordance with the Department of Ecology standards. See Solid Waste Utilities: Closure and Postclosure Cost Accounting.

263.30 Utility Operating Reserves

Amounts expensed by a proprietary fund and irrevocably set aside for pension, accident and death benefits, employee health and welfare, etc., but not included in restricted assets. Utilities may also use this account during the fiscal year for amounts expensed to meet the probable liability, not covered by insurance, for losses through accidents, fire, flood, or other hazards, and for losses from injury and damage claims. For reporting purposes, amounts that remain in this account at year-end which represent net self-insurance reserves must be credited against the related risk expense accounts, so that operating statements include as expenses only the actual judgments awarded and/or losses sustained.

263.40 Revenue Warrants Payable

The noncurrent portion of warrants issued with a set term for redemption (also known as time warrants). In most cases, they are backed by the earnings of a specific fund rather than the full faith and credit of the issuing government. Any premium or discount should be accounted for separately from the face value, using subaccounts of this account.

263.50 Leases and Installment Purchases

Include the noncurrent portion of capital leases and lease/purchases. An explanation of capital leases and the required accounting for them is in Leases.

263.60 Notes Payable

Include the noncurrent portion of promissory notes issued by a local government.

Include the entire unpaid principal of intermediate length financing instruments, such as anticipation notes and warrants (Chapter 39.50 RCW) authorized in anticipation of a bond issue, even though it may come due within 12 months.

Other anticipation notes or warrants should be classified as current debt even though payment may be delayed beyond 12 months (see account 239.60).

263.70 Arbitrage Rebate Tax Payable

The interest earnings accrued in years 1-4 that will be due to the U.S. Treasury at the end of the 5th year. Refer to discussion in Arbitrage Rebates.

263.80 Due to Other Governments

Include the noncurrent portion of intergovernmental loans.

263.90 Miscellaneous Noncurrent Liabilities

264. Pension Obligation (Net)

The cumulative difference between annual pension cost and the employer contribution to the pension plan.

267. Other Credits

This account is used in proprietary funds to account for gains that will be amortized over succeeding fiscal periods. Use the separate accounts provided for items such as unamortized debt premium (accounts 251.20, 252.20 and 253.20), customer advances to be refunded (account 245) and amounts held pending disposition (account 237).

271 DEFERRED INFLOWS of RESOURCES

An acquisition of net assets by the government that is applicable to future reporting period. This account should include transactions related to accumulated increase in fair value of hedging derivatives, deferred service concession arrangement receipts, deferred property tax, advance payments of property tax, special assessments, deferred amount on refunding [the unamortized difference between the net carrying amount of the debt and its reacquisition price (when the net carrying amount exceeds the reacquisition price – gain on refunding)], grants received in advance, pension. The categories should be detailed in the financial statements.

281-282 FUND BALANCE
286-288

These accounts are used to indicate the difference between the assets and liabilities reported in governmental funds.

281. Nonspendable Fund Balance

Indicates the portion of fund balance is inherently nonspendable in current period (e.g., prepaid items, inventories, long-term portion of loans receivable, nonfinancial resources held for resale, etc.).

282. Restricted Fund Balance

Indicates the portion of fund balance that is subject to externally enforceable legal restrictions (imposed by creditors, grantors, donors, other governments, etc.). The restrictions may be also imposed by law through constitutional provisions or enabling legislation.

286. Committed Fund Balance

Indicates the portion of fund balance that represents resources whose use is constrained by limitations that the government imposes upon itself at the highest level of decision making (normally the governing body) and that remain binding unless removed in the same manner.

287. Assigned Fund Balance

Indicates the portion of fund balance that reflects a government’s intended use of resources.

288. Unassigned Fund Balance

Indicates net resources in excess of nonspendable, restricted, committed, and assigned fund balance.

283-285 NET POSITION

283.10 Held in Trust for Pension Benefits

The difference between the assets and liabilities of pension plans reported by the employer or sponsor government in a pension (and other employee benefit) trust fund.

283.20 Held in Trust for Pool Participants

The difference between the assets and liabilities of external investment pools reported by the sponsor government in an investment trust fund.

283.90 Held in Trust for Other Purposes

The difference between the assets and liabilities of fiduciary funds, other than pension (and other employee benefit) trust funds or investment trust funds.

284.10 Net Investment in Capital Assets

Capital assets net of accumulated depreciation, reduced by the outstanding balances of borrowings attributable to the acquisition, construction, or improvement of those assets. Deferred outflows and inflows of resources attributable to the acquisition, construction, or improvement of those assets or related debt also should be included. If there are significant unspent related debt proceeds or deferred inflows of resources at the end of the reporting period, the portion of the debt or deferred inflows of resources attributable to the unspent amount should not be included.

284.20 Restricted for ___________

The component of net position that consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets.

284.21 Restricted for ________, Permanent Restriction. Restricted component of net position that may never be spent (e.g., endowments).

284.22 Restricted for ________, Temporary Restriction. Restricted component of net position that may be spent at some time, either in the present or future.

285. Unrestricted

The net amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position.

290. CONTROL ACCOUNTS

An account containing totals of one or more types of transactions the detail of which appears in a subsidiary ledger or its equivalent. The balance of the control account equals the sum of the balances of the detail accounts.

291. Nominal Accounts Control ‑ Budgetary

Budgetary accounts record annual estimates that are formally integrated into an accounting system, whether those estimates are appropriations or merely management estimates. Budgetary accounts should be contrasted with actual accounts, which record true revenues, expenditures or expenses, assets, liabilities and fund balances. Budgetary accounts should also be contrasted with project accounts, which record both estimates and actual amounts, but not on an annual basis.

Nominal accounts are those accounts that are closed to fund balance at the end of each fiscal period. For simplicity of reporting, the BARS includes in the nominal control account only those accounts which appear on the operating statement (revenues, expenditures, etc.).

291.10 Estimated Revenue Control

This account records the total revenues it is estimated will be earned by a specific fund during a government’s own fiscal year.

291.11 Estimated Operating Revenue Control
291.14 Estimated Nonoperating Revenue Control
291.17 Estimated Other Income Control
291.20 Appropriation/Expense Control

This account records the estimated or legally authorized total expenditures or expenses to be incurred during a government’s own fiscal year.

291.21 Estimated Operating Expense Control
291.24 Estimated Nonoperating Expense Control
291.27 Estimated Other Expenses Control
291.30 Estimated Other Financing Sources Control

This account records the total proceeds of borrowings, transfers (and a few other items not regarded as revenues) it is estimated will be received during a government’s own fiscal year.

291.40 Estimated Other Financing Uses Control

This account records the estimated or legally authorized amount of transfers to be paid during a government’s fiscal year.

291.50 Estimated Noncash Transaction Affecting Income (Proprietary Funds Only/Optional)

This account may be used in proprietary funds to establish budgetary control over specific line items affecting outcome from operations.

291.51 Estimated Inventory Purchases
291.53 Estimated Prepayments
291.55 Estimated Work in Process
291.70 Estimated Beginning Fund Balance Control

(Used by governmental funds and for budgeting by object in proprietary funds.)

This account records the amount by which fund assets are expected to exceed fund liabilities at the beginning of the fiscal year.

291.80 Estimated Ending Fund Balance Control

(Used by governmental funds and for budgeting by object in proprietary funds.)

This account records the excess of fund assets over liabilities estimated to exist at the end of the fiscal year.

292. Nominal Accounts Control ‑ Actual

Actual accounts record true revenues earned and expenditures/expenses incurred during a fiscal period.

292.10 Revenue Control

This account records the actual revenues earned by a specific fund during a government’s own fiscal period. Do not include proceeds from long-term debt and transfers-in which are classified not as revenues but as other financing sources. See account 292.3X.

292.11 Operating Revenue Control
292.14 Nonoperating Revenue Control
292.17 Other Income Control
292.20 Expenditure/Expense Control

This account is used to record actual expenditures/expenses incurred during a government’s own fiscal year. Do not include transfers-out which are classified not as expenditures/expenses but as other financing uses. See account 292.4X.

292.21 Operating Expense Control
292.24 Nonoperating Expense Control
292.27 Other Expenses Control
292.30 Other Financing Sources Control

This account records the actual proceeds of borrowings, transfers (and other items not regarded as revenues) which are received during a government’s own fiscal year.

292.40 Other Financing Uses Control

This account records the actual amount of transfers paid during a government’s own fiscal year.

292.50 Noncash Transactions Affecting Income (Proprietary Funds Only)

This account may be used to segregate expenses for specific transactions affecting income from operations.

292.51 Inventory Purchase Control
292.53 Prepayments Control
292.55 Work in Process Control
292.70 Beginning Fund Balance Control

(Used by governmental funds and for budgeting by object in proprietary funds.)

This account records the amount by which fund assets exceed fund liabilities at the beginning of the fiscal year.

Entry to this account is normally made once a year as soon as the entity has closed its books for the previous year, by crediting this account and debiting account 292.8X for the amount of actual beginning fund balance.

292.80 Ending Fund Balance Control

(Used by governmental funds and for budgeting by object in proprietary funds.)

This account records the actual excess of fund assets over liabilities at any specific date. The first entry to this account should be made as soon as the entity has closed its books for the previous year, by debiting this account for the actual beginning fund balance (see account 292.7X for the offsetting entry). Thereafter, entries must be made periodically (no less often than monthly) to update fund balance by charging this account for the excess of fund resources over fund uses since the last time fund balance was updated.

295. Encumbrance Control

Encumbrances are commitments related to unperformed (executory) contracts for goods or services. These are recorded before the actual expenditure is incurred to prevent expenditures from exceeding appropriations.

296. Life-To-Date Accounts Control ‑ Budgetary

296.10 Grants/Projects Authorized

The total amount of ongoing grants/projects authorized through the current fiscal year. This amount should include all grant amendments to date.

296.20 Continuing Grants/Projects Appropriations

The total amount of appropriations for ongoing grants/projects authorized through the current fiscal year. This amount should include all grant amendments to date.

297. Life-to-Date Accounts Control ‑ Actual

297.10 Life-to-Date Resources Earned

Resources earned from inception of the project to date for ongoing projects that extend over a period that does not coincide with or fall within the current fiscal year.

297.20 Life-to-Date Expenditures/Uses

Expenditures incurred from inception of the project to date for ongoing projects that extend over a period that does not coincide with or fall within the current fiscal year.

297.30 Project/Grant Contra

The excess of 297.20, Life-To-Date Expenditures/Uses over 297.10, Life-to-Date Resources Earned. This account represents the current grant receivable and serves to prevent these accounts from impacting fund balance.

298. Net Position – General Government

The difference between (1) asset and deferred outflows of resources, and (2) liabilities and deferred inflows of resources. The local government may use this account for the government-wide financial statements.

This section was last edited by SAO on 01/18/19
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Introduction

2.4 Budget Compliance

2.4.1 Introduction

2.4.1.10 A budget is a legal document that forecasts the financial resources of a government and authorizes the spending of those resources for a fiscal period. At a minimum, local governments’ budget must meet the requirements of Washington state law and the State Auditor’s Office. The SAO does not prescribe how to budget or what a budget should look like. The adopted budget should be of sufficient detail to be meaningful and meet the intention of the law. The SAO considers budgets showing revenues and expenditures at the legal fund level to be the minimum acceptable level of detail.

2.4.1.20 Budgeting is more than just an activity to satisfy state law. It is a sophisticated process of strategic planning, communication and policy development resulting in a detailed plan of operations for allocating and monitoring the use of limited resources among various competing demands. Teaching how to budget is outside the scope of the BARS. However, there are many educational resources available to local governments, such as the Municipal Research and Services Center  (mrsc.org) and the Government Finance Officers Association (gfoa.org).

2.4.1.30 Glossary of Budgetary Terms:

Appropriation. The legal spending level authorized by a budget ordinance or resolution. Spending should not exceed this level without prior approval of the governing body.

Original Budget. The first complete appropriated budget. The original budget may be adjusted by reserves, transfers, allocations, supplemental appropriations, and other legally authorized legislative and executive changes before the beginning of the fiscal year. The original budget should also include actual appropriation amounts automatically carried over from prior years by law.

Final Amended Budget. The original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized legislative and executive changes applicable to the fiscal year, whenever signed into law or otherwise legally authorized.

Comprehensive Budget. An government-wide budget that includes all resources the government expects and everything it intends to spend or encumber during a fiscal period. The comprehensive budget contains annual/biennial appropriated budgets, the annual/biennial portion of continuing appropriations such as the capital improvement projects, debt amortization schedules, and grant projects, flexible budgets and all non-budgeted funds.

Fixed Budget. Those budgets which set an absolute maximum or ceiling on the expenditures of a particular fund, department, or other specific category. A fixed budget can be either an annual/biennial appropriated budget or a continuing appropriation. Fixed budgets must be adopted by ordinance or resolution, either for the government’s fiscal period or at the outset of a service project, debt issue, grant award, or capital project.

Annual/Biennial Appropriated Budget. A fixed budget adopted for the government’s fiscal period. The appropriated budget was traditionally used to determine a government’s property tax levy, and a ceiling on expenditures was made absolute so that the expenditures of a government unit would not exceed its revenues. This budget was also historically a balanced budget, estimated revenues equaling appropriations. The appropriated budget is still used to set tax levies and some budget statutes still require balanced budgets, but it is more generally used to authorize a specific amount of expenditures regardless of whether estimated resources meet or exceed that amount. Appropriated budgets are required by statute in cities (Chapter 35.32A RCW, Chapter 35.33 RCW and Chapter 35A.33 RCW), counties (Chapter 36.40 RCW), and most other local governments in Washington State. These budgets are also called legal budgets, adopted budgets, or formal budgets. The appropriated budgets should be adopted by ordinance or resolution.

Continuing Appropriation. A fixed budget which authorizes expenditures for a fiscal period that differs from the government’s fiscal year, such as capital projects, debt issues, grant awards, and other service projects. These expenditures require an ordinance or resolution to authorize the project, establish the assessment roll, adopt the debt amortization schedule, or accept the grant award. Such ordinances or resolutions set an absolute maximum or ceiling on the expenditures, but the time period for incurring expenditures does not coincide with the government’s fiscal year; it may even cover several years. The major difference between annual/biennial appropriated budgets and continuing appropriations is that the latter do not lapse at fiscal period end; this implies that no legislative action is required to amend the annual/biennial portion of a continuing appropriation, unless the total authorized expenditures would exceed the entire appropriation.

Flexible Budgets. Are usually regarded as managerial tools, which do not set a ceiling on expenses or expenditures but establish a plan for them at various levels of service. They are especially appropriate for the day-to-day operations of a public utility where it is essential to plan fluctuations in the demand for services and where revenues will automatically increase with demand, so that a balanced budget does not depend on establishing a ceiling for expenses.

Working Capital Budget. Combines flexible and fixed budget elements in one document for enterprise and internal service funds. Current operations are flexibly budgeted based on the estimated level of services to be provided and long-range sources and uses of assets are controlled by annual/biennial appropriations and continuing appropriations.

Capital Improvement Budget. Consists of two elements: the annual/biennial portion of capital projects and annual/biennial appropriations for the purchase, construction or replacement of major fixed assets in the current fiscal period.

Operating Budget. Presents the estimated expenditures and available resources necessary to provide the services for which the government was created. An operating budget will contain flexible budgets and fixed budgets; the fixed budgets will include annual/biennial appropriations for services and the annual/biennial portion of continuing appropriations for debt service and for service projects.

Encumbrances. Commitments related to unperformed (executory) contracts for goods or services should be utilized to the extent necessary to assure effective budgetary control and to facilitate cash planning. Encumbrances outstanding at year end represent the estimated amount of expenditures ultimately to result if unperformed contracts in process are completed; they do not constitute expenditures or liabilities.

This section was last edited by SAO on 01/23/19
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Fund Types and Accounting Principles

3.1 Accounting Principles and Internal Control

3.1.7 Fund Types and Accounting Principles

3.1.7.10 The following principles are basic rules of accounting and financial reporting for cash based cities, counties, and special purpose districts.

3.1.7.20 ACCOUNTING AND REPORTING CAPABILITIES

A governmental accounting system must make it possible to determine and demonstrate compliance with finance related legal and contractual provisions.

3.1.7.30 FUND ACCOUNTING SYSTEMS

A governmental accounting system should be organized and operated on a fund basis. A fund is defined as a fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations.

3.1.7.40 BASIS OF ACCOUNTING

Basis of accounting refers to when revenues and expenditures are recognized and reported in the financial statements.

Revenues are recognized only when cash is received and expenditures are recognized when chargeable against the report year’s budget appropriations as required by state law. This generally results in revenues being recognized when delivered to the government or government’s agent and expenditures being recognized when paid. Warrants and checks are considered paid when issued. An exception to expenditure recognition would be during any open period after the close of the fiscal year when expenditures can be charged against the previous period for claims incurred in the previous period. Open periods are required by statute for cities (RCW 35.33.151 and RCW 35A.33.150) and allowed for counties (RCW 36.40.200). Special purpose districts which use the county or a city as their treasurer may use the same open-period as their treasurer. If a district acts as its own treasurer, no open period is allowed by statute.

Revenues and expenditures should be reported at gross amounts by account and not netted against each other.

Revenues and expenditures should be recognized for all receipts and payments of a government’s resources, including those where the cash is handled by an agent (such as a bank, underwriter, etc.) on behalf of the government rather than handled directly by the local government. For example, debt proceeds wired directly to an escrow account, payments by the State Treasurer’s Office to vendors for items purchased with LOCAL resources, etc.

Interest earned on investments may be recognized at cost, amortized cost or fair value in accordance with the government’s disclosed accounting policy.

In addition, revenue and expenditures should also be recognized when the government agrees to forgo revenue in exchange for reduction of expenses (offsetting agreement) or receipt of an asset (e.g., acquiring an asset in exchange for reduced permit fees, etc.). In such cases, the transaction should be recorded as if the cash was received and expended in order to reflect the legal transaction.

This basis results in no reported assets other than cash and investments and no reported liabilities. For example, purchases of capital assets are expensed during the year of acquisition without any capitalization of capital assets or allocation of depreciation expense. However, please be aware that certain liabilities should be reported on Schedule 09 and in the notes in financial statements.

3.1.7.50 TYPES OF FUNDS

In fund financial statements, governments should report governmental, proprietary, and fiduciary funds to the extent that they have activities that meet the criteria for using these funds.

Presented below is a system to classify all funds used by local government and the assignment of code numbers to identify each type of fund. A three digit code is used: the first digit identifies the fund type and the next two digits will be assigned by the governmental unit to identify each specific fund.

Since counties account for special purpose districts in their accounting systems as agency funds, they often provide the districts with reports showing assigned fund codes 630-699. These codes refer to the fund from the county perspective. A district has to “reassign” the county code to the code appropriate to the fund type it is reporting (e.g., if the district’s general fund is coded in the county records as 663, the district in its annual report has to code this fund as 001).

For reporting purposes local governments are required to follow the described below fund structure. However, the local governments may create other funds for accounting or managerial purposes. When preparing external financial reports, those accounting or managerial funds should be rolled to appropriate fund types (e.g., there should be only one general fund or if an entity accounts separately for operating, capital or/and debt activities of its proprietary function, those activities should be rolled up into the appropriate enterprise fund, etc.)

Governmental Funds

Code 000 General (Current Expense) Fund – should be used to account for and report all financial resources not accounted for and reported in another fund. For reporting purposes the local government can have only one general fund.

Although a local government has to report only one general fund in its external financial reports, the government can have multiple general subfunds for its internal managerial purposes. These managerial subfunds have to be combined into one general fund for external financial reporting.

Code 100 Special Revenue Funds – should be used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specific purposes other than debt service or capital projects. Restricted revenues are resources externally restricted by creditors, grantors, contributors or laws or regulations of other governments or restricted by law through constitutional provisions or enabling legislation. Committed revenues are resources with limitations imposed by the highest level of the government (e.g., board of commissioners, city council, etc.) through a formal action (resolution, ordinance) and where the limitations can be removed only by a similar action of the same governing body. Revenues do not include other financing sources (long-term debt, transfers, etc.).

The term proceeds of specific revenue sources establishes that one or more specific restricted or committed revenues should be foundation for a special revenue fund. They should be expected to continue to comprise a substantial portion of the inflows reported in the fund. It is recommended that at least 20 percent is a reasonable limit for restricted and committed revenues to create a foundation for a special revenue fund. Local governments need to consider factors such as past resource history, future resource expectations and unusual current year inflows such as debt proceeds in their analysis.

They may use the calculation below to determine whether an activity would qualify for reporting as a special revenue fund.

Other resources (investment earnings and transfers from other funds, etc.) also may be reported in the fund if these resources are restricted, committed, or assigned (intended) to the specific purpose of the fund.

Governments should discontinue reporting a special revenue fund, and instead report the fund’s remaining resources in the general fund, if the government no longer expects that a substantial portion of the inflows will derive from restricted or committed revenue sources.

All revenues have to be recognized in the special revenue fund. If the resources are initially received in another fund, such as the general fund, and subsequently remitted to a special revenue fund, they should not be recognized as revenue in the fund initially receiving them. They should be recognized as revenue in the special revenue fund from which they will be expended. So, the local governments can either receive resources directly into the special revenue fund, or account for the resources as agency deposits in the receiving fund and, after remitting them, recognize them as revenue to the special revenue fund.

Special revenue funds should not be used to account for resources held in trust for individuals, private organizations, or other governments.

The state statutes contain many requirements for special funds to account for different activities. The legally required funds do not always meet standards for external reporting. So, while the local governments are required to follow their legal requirements, they will have to make some adjustment to their fund structure for external financial reporting.

Code 200 Debt Service Funds – should be used to account for and report financial resources that are restricted, committed, or assigned (intended) to expenditure for principal and interest. Debt service funds should be used to report resources if legally mandated. Financial resources that are being accumulated for principal and interest maturing in future years also should be reported in debt service funds. The debt service transactions for a special assessment for which the government is not obligated in any matter should be reported in an agency fund. Also, if the government is authorized, or required to establish and maintain a special assessment bond reserve, guaranty, or sinking fund, it is required to use a debt service fund for this purpose.

Use enterprise funds (400) for debt payments related to utilities and other business activities.

Code 300 Capital Projects Funds – should be used to account for and report financial resources that are restricted, committed, or assigned (intended) for expenditure for capital outlays including the acquisition or construction of capital facilities or other capital assets. Capital outlays financed from general obligation bond proceeds should be accounted for through a capital projects fund. Capital project funds exclude those types of capital-related outflows financed by proprietary funds or for assets that will be held in trust for individuals, private organizations, or other governments (private-purpose trust funds).

Use enterprise funds (400) for capital projects related to utilities and other business activities.

Code 700 Permanent Funds – should be used to account for and report resources that are restricted to the extent that only earnings, and not principal, may be used for purposes that support the reporting government’s programs – that is for the benefit of the government or its citizens (public-purpose). Permanent funds do not include private-purpose trust funds which account for resources held in trust for individuals, private organizations, or other governments.

Proprietary Funds

Code 400 Enterprise Funds – may be used to report any activity for which a fee is charged to external users for goods or services. Enterprise funds are required for any activity whose principal revenue sources meet any of the following criteria:

  • Debt backed solely by a pledge of the net revenues from fees and charges.
  • Legal requirement to recover cost. An enterprise fund is required to be used if the cost of providing services for an activity including capital costs (such as depreciation or debt service) must be legally recovered through fees or charges.
  • Policy decision to recover cost. It is necessary to use an enterprise fund if the government’s policy is to establish activity fees or charges designed to recover the cost, including capital costs (such as depreciation or debt service).

These criteria should be applied in the context of the activity’s principal revenue source.

The term activity generally refers to programs and services. This term is not synonymous with fund. As a practical consequence, if an activity reported as a separate fund meets any of the three criteria, it should be an enterprise fund. Also, if a “multiple activity” fund (e.g., general fund) includes a significant activity whose principal revenue source meets any of these three criteria, the activity should be reclassified as an enterprise fund.

The determination of an activity’s principal revenue source is a matter of professional judgement. A good indicator of the activity’s significance may be comparing pledged revenues or fees and charges to total revenue. For example, consider a county auditor’s office that charges fees to provide a payroll service to various taxing districts. Even if the fee is meant to cover the cost of the service, the county auditor function as a whole is primarily supported with tax dollars from the general fund. It would be allowable in this case to leave the activity all within general fund.

Finding an appropriate fund type requires a careful analysis since there is not always a clear choice. For example, building permit fees may be accounted for in the general fund or a special revenue fund in certain circumstances, such as when they are partially supported by taxes. However, if there is a pricing policy to recover the cost of issuing those individual building permits, they should be reported in an enterprise fund.

Separate funds are not required for bond redemption, construction, reserves, or deposits, for any utility. If separated, use 400 series number. Separate funds are not required even though bond covenants may stipulate a bond reserve fund, bond construction fund, etc. The bond covenant use of the term fund is not the same as the use in governmental accounting. For bond covenants, fund means only a segregation or separate account, not a self-balancing set of accounts.

Local governments may separate operating, capital projects and debt functions of enterprise funds. However, when reporting such proprietary activities, all those functions should be contained in one fund.

Code 500 Internal Service Funds – may be used to report any activity that provides goods or services to other funds, departments or agencies of the government, or to other governments, on a cost-reimbursement basis. Internal service funds should be used only if the reporting government is the predominant participant in the activity. Otherwise, the activity should be reported in an enterprise fund.

Fiduciary Funds

Note: The new definitions of fiduciary funds are required for reporting fiduciary activities in FY 2019 (i.e., reports submitted in 2020). Additional information regarding these changes is available here.

Code 600 Fiduciary Funds – should be used to account for assets held by a government in a trustee capacity or as a custodian for individuals, private organizations, other governmental units, and/or other funds. These include (a) investment trust funds, (b) pension (and other employee benefit) trust funds, (c) private-purpose trust funds, and (d) custodial funds.

Code 600-609 Investment Trust Funds – should be used to report fiduciary activities from the external portion of investment pools and individual investment accounts that are held in a trust that meets the following criteria: the assets are (a) administered through a trust in which the government itself is not a beneficiary, (b) dedicated to providing benefits to recipients in accordance with the benefit terms, and (c) legally protected from the creditors of the government.

Code 610-619 Pension (and Other Employee Benefit) Trust Funds – should be used to report fiduciary activities for pension plans and OPEB plans that are administered through qualifying trusts. Qualifying trusts are those in which:

  • Contributions to the plan, and earnings on those contributions, are irrevocable. Pay-as-you-go plans do not qualify because they are “payments,” not contributions.
  • Plan assets are dedicated solely to providing benefits to plan members in accordance with the benefit terms. Different plans (for example a pension and an OPEB plan) cannot be commingled in the same trust. The assets must be partitioned for specific plans.
  • Plan assets are legally protected from creditors.

If you are acting as administrator for someone else’s pension/OPEB plans, the plans still must meet the criteria above to be reported in a trust fund.

Code 620-629 Private-Purpose Trust Funds – should be used to report all fiduciary activities that (a) are not required to be reported in pension (and other employee benefit) trust funds or investment trust funds, and (b) are held in a trust that meets the following criteria: the assets are (a) administered through a trust in which the government itself is not a beneficiary, (b) dedicated to providing benefits to recipients in accordance with the benefit terms, and (c) legally protected from the creditors of the government.

Code 630-698 Custodial Funds – should be used to report all fiduciary activities that are not required to be reported in pension (and other employee benefit) trust funds, investment trust funds or private purpose trust funds. The external portion of the investment pools that are not held in trust that meets criteria listed above should be reported in a separate external investment pool fund column under the custodial funds classification.

Code 699 External Investment Pool Fund – The external portion of the investment pools that are not held in trust and meet criteria listed above. Although this is consider a custodial fund, it should be reported in a separate external investment pool fund column under the custodial funds classification.

NOTE: The custodial funds are required to be used by business-type activities and enterprise funds, if the assets, upon receipt, are normally expected to be held for more than three months.

3.1.7.60 NUMBER OF FUNDS

Governments should establish and maintain those funds required by law and sound financial administration. Only the minimum number of funds consistent with legal and operating requirements should be established. Using numerous funds results in inflexibility, undue complexity, and inefficient financial administration.

Local governments should periodically undertake a comprehensive evaluation of their fund structure to ensure that individual funds that became superfluous are eliminated from accounting and reporting.

Elected officials should be educated to the fact that accountability may be achieved effectively and efficiently by judicious use of department, program and other available account coding or cautious use of managerial (internal) funds.

3.1.7.70 BUDGETING, BUDGETARY CONTROL, AND BUDGETARY REPORTING

a. An annual/biennial budget must be adopted by every government.
b. The accounting system should provide the basis for appropriate budgetary control.
c. Budgetary comparisons must be included in the appropriate financial statements and schedules for funds for which an annual/biennial budget has been adopted.

3.1.7.80 TRANSFER, REVENUE AND EXPENDITURE ACCOUNT CLASSIFICATIONS

a. Interfund transfers, proceeds of general long-term debt issues and material proceeds of capital asset disposition should be classified separately from fund revenues and expenditures.
b. Governmental fund revenues should be classified by fund and by the sources indicated in BARS Account Export. Expenditures should be classified by fund and by the categories indicated in BARS Account Export.
c. Proprietary fund revenues and expenses should be classified in essentially the same manner as those of similar business organizations, functions, or activities.

3.1.7.80 COMMON TERMINOLOGY AND CLASSIFICATION

A common terminology and classification should be used consistently throughout the budget, the accounts, and the financial reports of each fund.

3.1.7.90 INTERIM AND ANNUAL FINANCIAL REPORTS

a. Appropriate interim financial statements and reports of operating results and other pertinent information should be prepared to facilitate management control of financial operations, legislative oversight, and, where necessary or desired, for external reporting purposes. (RCW 35.33.141, RCW 35A.33.140 and RCW 36.40.210)

b. Annual reporting requirements are prescribed by the State Auditor’s Office. See Reporting Requirements and Filing Instructions for Cities and Counties or Reporting Requirements and Filing Instructions for Special Purpose Districts for details.

This section was last edited by SAO on 01/07/19
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Reporting Requirements and Filing Instructions for Cities and Counties

4.1 Reporting Principles and Requirements

4.1.5 Reporting Requirements and Filing Instructions for Cities and Counties

4.1.5.10 Pursuant to RCW 43.09.230, Annual Reports are to be certified and filed with the State Auditor’s Office (SAO) within 150 days after the close of each fiscal year.

X Required to be prepared by cities and counties and submitted to the SAO.

4.1.5.20 The matrix on the following pages provides additional details regarding reporting requirements for governmental, proprietary and fiduciary funds.

Caution

4.1.5.30 Local governments with total revenues of $2 million or less are not required to prepare C-4 or C-5 statements unless debt covenants, a contract, a grantor or the city/county’s legislative body requires the city/county to prepare the financial statements or to receive a financial statements audit. If this request is made, C-4 and C-5 statements and notes should be prepared. The $2 million threshold calculation excludes any proceeds from issuance of long-term debt and resources held by the city/county in its fiduciary capacity. Local governments which choose not to prepare C-4 and C-5 statements must have their budgeted information available for the audit.

4.1.5.40 If more than $750,000 in federal funding was expended by the entity during the year and a federal single audit is required, the entity must prepare financial statements if it has expenditures of federal moneys from more than one program or cluster. However, an entity that normally does not prepare financial statements may not need to prepare them for the single audit if it has expenditures from only one program or cluster. Entities should consult with their local SAO team or the SAO HelpDesk if they have questions about this requirement.

4.1.5.50 FORMS

The templates for Online Filing for Schedules 01, 06, 09, 15 and 16 are available on the SAO Annual Financial Reports website. When using the Online Filing option, the system will create the Schedule based on data provided by the city/county on these templates.

Blank forms for other schedules are provided in this Manual. The use of these particular forms is not required; however, information requested by the form is prescribed. Specific instructions accompanying each statement and schedule identify which, if any, details are optional.

4.1.5.60 SUBSEQUENT CORRECTIONS

All subsequent discoveries of errors and omissions in the annual report – from the date of original submission up through the end of the audit applicable to that period – are required to be corrected by resubmitting the annual report. For any misstatements discovered during the audit, governments should ensure open communication with the audit team about the correction. Any misstatements discovered after the audit is completed that affect Schedule 01 should be recorded as a prior period adjustment. If misstatements discovered after completion of the audit are material, governments should immediately alert their audit team.

4.1.5.70 FILING INSTRUCTIONS

Electronic reporting is encouraged when filing annual reports. Annual reports should be submitted via the Online Filing option on the State Auditor’s website at: www.sao.wa.gov. Acceptable file should adhere to the prescribed record layout and should be an Excel file. It should include column headings. All columns must be formatted as text except the Actual Amount column which is numeric. More details are provided on the website.

For questions and/or support e-mail the SAO HelpDesk through our Online Services.

If the city or county cannot provide the annual report in the electronic format it should mail it to:

Annual Report
State Auditor’s Office
Local Government Support Team
P.O. Box 40031
Olympia, WA 98504-0031

4.1.5.80 CERTIFICATION

Prepare the certification, sign and date the certification before submitting your report.

4.1.5.90 The following matrix describes required statements and schedules for cash basis cities and counties and the scope of each schedule.

Annual Report Disclosure Form
MCAG No. _______
(City/County)

(This form is NOT required if you are submitting the annual report electronically.)

Please check if the statements/schedules are attached. Use the column which is appropriate for your government type. If financial statements and/or Schedules 17 and 22 are not applicable mark the spot NA (not applicable). An unmarked spot in your government type column will indicate that a schedule is not attached due to lack of activities described in this schedule in reported year.

______________________________________________________________________________________

[1] Cities and counties may choose to prepare the Schedule 06 in lieu of Schedules 07 and 11. This is an option for the reporting year 2017 and Schedule 06 will be required for the subsequent reporting periods.

[2] Cities with total revenues usually less than $300,000 are also required to submit an Assessment Questionnaire.

[3] There should be only one general fund. Also, if the local government accounts for the debt and capital projects related to proprietary activities in funds other than proprietary, these activities should be incorporated in the appropriate proprietary fund. All interfund transactions between funds which are combined for reporting purposes should be eliminated to avoid double counting.

[4] Only cities and counties with revenue of $2 million or more are required to prepare the financial statements. See Caution on a previous page.

[5] See BARS Manual for detailed instructions indicating which cities are required to prepare this schedule.

[6] Only cities with revenue usually less than $300,000 are required to prepare this schedule.

This section was last edited by SAO on 01/16/19
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Table of Contents

Index of Sections

CHARTS OF ACCOUNTS
BARS Account Export 1.4
Object Codes 1.3
Revenue/Expenditure/Expense Accounts Overview 1.1
General Ledger Accounts 1.2
Account Structure
Applicability 1.1.6
Structure 1.1.2
BUDGETING
Budget Compliance
Introduction 2.4.1
Budget Adoption and Amendments 2.4.3
Budget Process 2.4.2
ACCOUNTING
Accounting Principles and Internal Control
Fund Types and Accounting Principles 3.1.7
Internal Control 3.1.3
Original Supporting Documentation 3.1.4
Reserved and Unreserved Cash and Investments 3.4
Assets
Compensating Balances 3.2.5
Deposits and Investments 3.2.1
Money Held in Trust 3.2.4
Special Assessments 3.2.7
Sweeping Interest and Investment Returns into County General Fund 3.2.3
Capital Assets
Capital Assets Management 3.3.8
Liabilities
Accounting for LOCAL Program Financing Activities 3.4.11
Bonds and Revenue Warrants 3.4.3
Issuance of Duplicate Instruments 3.4.5
Other Post-Employment Benefits 3.4.16
Pension Liabilities 3.4.13
Refunding Debt 3.4.14
Solid Waste Utilities: Closure and Postclosure Cost Accounting 3.4.10
Revenues
Cash Receipting 3.6.1
County Auditor's Operation and Maintenance Fund (Recording Fees) 3.6.2
County Treasurer's Operation and Maintenance Fund 3.6.3
Criminal Justice Funding 3.6.4
Diversion of County Road Property Tax 3.6.5
Electronic Funds Transfer - Receipts 3.6.6
Liquor Tax and Profits - Two Percent for Substance Abuse Treatment Programs 3.6.8
Prosecuting Attorney's Salaries 3.6.12
Suspense Funds 3.6.11
Utility Tax 3.6.13
Working Advances from Department of Social and Health Services (DSHS) 3.6.10
Grants
Grants Accounting 3.7.1
Pass-Through Grants 3.7.2
Expenditures
Confidential Funds (Drug Buy Money, Investigative Funds) 3.8.9
Electronic Funds Transfer - Disbursements 3.8.11
Employee Travel 3.8.2
Imprest, Petty Cash and Other Revolving Funds 3.8.8
Memberships in Civic and Service Organizations 3.8.13
Mobile Devices 3.8.3
Paths and Trails - Accounting 3.8.10
Purchase Cards 3.8.4
Redeemed Warrants/Cancelled Checks 3.8.7
Unemployment and Deferred Compensation 3.8.1
Use of Payroll and Claims Funds 3.8.6
Voter Registration and Election Costs Allocation 3.8.12
Voucher Certification and Approval 3.8.5
Interfund Activities
Interfund Activities Overview 3.9.8
Equipment Rental and Revolving (ER&R) Fund 3.9.7
Loans 3.9.1
Overhead Cost Allocation 3.9.5
Property Transfers 3.9.2
Reimbursements 3.9.4
Utility Surplus Transfers 3.9.3
Compliance
Bond Coverage for Public Officials and Employees 3.10.3
County Fair Operations 3.10.1
Limitation of Indebtedness 3.10.5
New Entity Creation and Dissolution Notification 3.10.6
Promotional Hosting 3.10.7
Public Works Records 3.10.4
Reporting Losses of Public Funds or Assets or Other Illegal Activity 3.10.2
Special Topics
Transportation Benefit District (TBD) 3.11.1
REPORTING
Reporting Principles and Requirements
Reporting Requirements and Filing Instructions for Cities and Counties 4.1.5
Reporting Requirements and Filing Instructions for Special Purpose Districts 4.1.6
Certification 4.1.3
GAAP versus Cash Reporting 4.1.7
Financial Statements
Fund Resources and Uses Arising from Cash Transactions (C-4) 4.3.12
Fiduciary Fund Resources and Uses Arising from Cash Transactions (C-5) 4.3.13
Notes to Financial Statements
Instructions 4.6.2
Supplementary and Other Information
Liabilities (Schedule 09) 4.8.13
Expenditures of Federal Awards (Schedule 16) 4.8.5
SAO Annual Report Schedules
Revenues/Expenditures/Expenses (Schedule 01) 4.8.1
Summary of Bank Reconciliation (Schedule 06) 4.8.17
Disbursement Activity (Schedule 07) 4.8.2
Cash Activity (Schedule 11) 4.8.4
Expenditures of State Financial Assistance (Schedule 15) 4.8.16
Public Works (Schedule 17) 4.8.6
Labor Relations Consultant(s) (Schedule 19) 4.8.7
Sales and Use Tax for Public Facilities - Rural Counties (Schedule 20) 4.8.8
Risk Management (Schedule 21) 4.8.9
Assessment Questionnaire (Schedule 22) (Cash) 4.8.14
This section was last edited by SAO on 01/12/19
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BARS Alerts & Overview of Significant Changes

BARS Alerts

3/5/2019Reporting of the USDA Federal Loans.
8/1/2018BARS Manual Update - New Accounts and Changes to Object Code 50
3/21/2018Capital Assets Inventory in Counties
3/7/2018Tax Abatement information available on the DOR website (GAAP governments only)

Overview of Significant Changes – Applicable to the Reporting Year 2018

TopicReferenceDescription of Changes
  CHART OF ACCOUNTS
BARS Account Export3132500, Housing and Related Services Sale and Use TaxNew account for governments collecting sales and use tax as authorized in RCW 82.14.530.
BARS Account Export3329330, Medical Transformation DemonstrationNew account for revenues for Medicaid payments related to an implementation of the Transformation Plans. The addition was communicated on August 1, 2018 in BARS Alert.
BARS Account Export3329340, Ground Emergency Medical Transportation (GEMT) Payment ProgramNew account for revenues from Medicaid related to the GEMT program. The addition was communicated on August 1, 2018 in BARS Alert.
BARS Account Export3360211, County Fair FundExpanded definition to clarify use of this code.
BARS Account Export3360700, PFD Lodging Tax DistributionCode applicable only to Seattle and King County.
BARS Account Export3432000, Television/Cable/Internet Sales and ServicesExpanded the title and the definition to include internet services as authorized by Chapter 186, Laws of 2018.
BARS Account Export3697000, Pension/OPEB ContributionsRevised title and definition to clarify use of this account for pension and OPEB related revenues only.
BARS Account Export51530, Legal ServicesThe account was divided between internal and external legal services. Within each category were created more separate accounts for different specific legal expenditures. The change will allow governments to analyze and compare costs much more effectively. This also aligns accounting records with procedures auditors are required by professional standards to perform on legal liabilities, so it will help make the audit process more efficient. This change was already announced in 2016 and was not required for the FY 2017 reports; however, the new accounts will be required for 2018 reporting.
Object Codes Object code 50 was removed and the definitions of object codes 30 and 40 adjusted to include the transactions which were previously reported using object 50. For other details see BARS Alert issued August 1, 2018.
   
  ACCOUNTING
Fund Types and Accounting Principles3.1.7The recent changes in governmental accounting regarding fiduciary activities are effective for reporting periods beginning after December 15, 2018; however we incorporated the required changes in this version of manual. The additional information will be available on our website under Fiduciary Funds in BARS manual.

 

Also, updated was the discussion of enterprise [400] funds. There are no new reporting requirements and the update expands the current prescription.

Capital Assets Management3.3.8The entire section was revised to provide a comprehensive guidance for accounting of capital assets. The update also incorporates the changes to RCW 36.32.210 which removed the annual inventory requirement. This change was communicated on March 21, 2018 in BARS Alert.
Other Postemployment Benefits (OPEB)3.4.16This section provides a short overview of other postemployment benefits (OPEB). Starting with financial reports for a fiscal year 2018, all local governments are required to report liabilities related to OPEB, if applicable. [This update provides also samples of disclosure regarding OPEB in the Reporting/Notes to Financial Statements section.]
County Auditor’s Operation and Maintenance Fund (Recording Fees)3.6.2The section was updated to reflect the 2018 legislative changes in the amounts of collected surcharges.
Federal Grants Received During the Open Period – Accounting3.7.3The section was removed since it conflicts with statutory restrictions regarding an open period.
ER&R3.9.7New section was added regarding Equipment Rental and Revolving (ER&R) Fund. This guidance was previously available outside the BARS manual and it is now incorporated into the manual allowing an easy access.
Interfund Activities Overview3.9.8Added a new section to provide a general overview of interfund transactions.
   
  REPORTING
  The recent changes in governmental accounting regarding fiduciary activities are effective for reporting periods beginning after December 15, 2018; however we incorporated the required changes in this version of manual. The additional information will be available on our website under Fiduciary Funds in BARS manual.

 

The following sections were updated 4.1.5.90, 4.1.6.80, 4.3.13 (also includes the change in the pension trust fund title), 4.8.2.50, 4.8.4.30, 4.8.13.50, Note X- Deposits and Investments – paragraph [7]. These changes involved only a title change from agency to custodial funds.

Note 1 – Summary of Significant Accounting Policies A. Fund Accounting – revised first paragraph; added investment and pension/OPEB trust funds to listing of fiduciary funds.

 

C. Budgets – the budgetary section was extracted and added as a separate note since budgetary disclosure is not considered an accounting policy.

Note X – Fiduciary Activities New note Fiduciary Activities was added to explain the change in counties’ reporting of 2017 money held for the special purpose districts. The affected counties were notified in an email dated May 29, 2018. The note is still required for the counties which will be reporting the special purpose districts for the first time in 2018. If they reported them in 2017, the note is not longer required.
Note X – OPEB Plans A new reporting requirements regarding other than pension postemployment benefits (OPEB). Please see the Accounting/Liabilities/Other Postemployment Benefits section for more details.
Schedule 07 The local government should prepare either the Schedule 07, Disbursement Activity and Schedule 11, Cash Activity OR Schedule 06, Summary of Bank Reconciliation for 2018 annual report.
Schedule 09 Clarified that the governments should be reporting both short- and long-term liabilities on the Schedule. Also added new ID. Numbers for registered warrants and lines of credits.
Schedule 11 The local government should prepare either the Schedule 07, Disbursement Activity and Schedule 11, Cash Activity OR Schedule 06, Summary of Bank Reconciliation for 2018 annual report.
Schedule 164.8.5.60

 

4.8.5.120

4.8.5.130

4.8.5180

Note 4, Federal Loans

Revision reflect the clarification for reporting federal grants provided by federal agencies.

 

Remove discussion regarding ARRA grants.

The example of reporting FEMA grants was updated.

Updated for changes related to reporting the following grants: EPA Drinking Water (CFDA 66.468), Clean Water (CFDA 66.458), USDA Interim Financing (CFDA10.760) and (CFDA 10.766).

Revised rules for reporting grants with missing CFDA numbers.

Added sentence regarding interim financing.

Schedule 21 The Schedule was revised to provide relevant information needed in assessing and auditing governments’ risk management circumstances.
   
  ONLINE FILING
Schedule 09 The Schedule 09, Schedule of Liabilities, includes a new validation check for net pension liabilities. Governments will receive a red flag if they have pension related liabilities but do not report them on the Schedule 09 or if they are using the incorrect ID No.
   

BARS Alerts

7/20/2017 BARS Manual Update - Coding Marijuana Excise Tax Distribution (Cities/Counties Only)
3/14/2017 BARS Update - Reporting Court Related Agency Deposits and Remittances (Cities/Counties Only)
1/4/2017 BARS Manuals Update - 2017 Filing System Update

Overview of Significant Changes – Applicable to the Reporting Year 2017

Topic

Reference

Description of Changes

CHART OF ACCOUNTS

Revenue/Expenditure/Expense Accounts

3132400, Local Infrastructure Financing Tool (LIFT)

Added a new account for revenues from the local sales and use tax dedicated for LIFT projects.

Revenue/Expenditure/Expense Accounts

3340370, State Grant from CRAB

The title was changed to Rural Arterial Program (RAP).

Revenue/Expenditure/Expense Accounts

3340372, CRAB Road Arterial – Projects

The title was changed to County Arterial Preservation Project (CAPP).

Revenue/Expenditure/Expense Accounts

335/336

The titles for both categories was revised to State Shared Revenues, Entitlements and Impact Payments.

Revenue/Expenditure/Expense Accounts

3360425, Foundational Public Health Services

A new account was added for 2017 distributions from the DOH.

Revenue/Expenditure/Expense Accounts

3360642, Marijuana Excise Tax Distribution

A new account was added for the distribution of the marijuana excise tax from the State.

Revenue/Expenditure/Expense Accounts

3421000, Law Enforcement Services

The definition was expanded to include payments from the WASP for processing the sex and kidnapping offenders’ registration.

Revenue/Expenditure/Expense Accounts

3670000, Contributions and Donations from Nongovernmental Sources

The definition was clarified regarding connection fees.

Revenue/Expenditure/Expense Accounts

395, Disposition of Capital Assets

Added a clarification regarding use of the account in the proprietary fund.

Revenue/Expenditure/Expense Accounts

398, Insurance Recoveries

The account was split into two 3981, Insurance Recoveries for cash basis governments and 3985, Insurance Recoveries for GAAP. The split was necessary to accommodate reporting by cash basis proprietary funds since the BARS codes in 370 series are not available to them. The revised account 3981 replaces the original 372 code.

Revenue/Expenditure/Expense Accounts

51530, Legal Services

The account was divided between internal and external legal services. Within each category were created more separate accounts for different specific legal expenditures. The change will allow governments to analyze and compare costs much more effectively. This also aligns accounting records with procedures auditors are required by professional standards to perform on legal liabilities, so it will help make the audit process more efficient. This account will be required for 2018 reporting.

Revenue/Expenditure/Expense Accounts

51770, Unemployment Compensation

Changed references to section of the BARS manual to correctly refer the current title (Payroll Accounting vs. Unemployment and Deferred Compensation).

Revenue/Expenditure/Expense Accounts

51830, Maintenance/Security/Insurance/Janitorial Services

Clarified the definition regarding property insurance.

Revenue/Expenditure/Expense Accounts

51863, General Grants and Financial Assistance to Other Governments

Revised title to General Grants, Financial Assistance and Other Distributions to Local Governments.

Revenue/Expenditure/Expense Accounts

538, Combined Water/Sewer/Solid Waste Utilities

Revised title and definition to correctly reflect RCW 54.16.300 (i.e., Combined Utilities).

Revenue/Expenditure/Expense Accounts

562, Public Health

The WA State DOH added additional detail accounts 562.11-562.15 for local governments subject to the DOH’s jurisdiction.

Revenue/Expenditure/Expense Accounts

593, Advance Refunding Escrow

Added to the definition a reminder that this account should be reported also for proprietary funds.

Revenue/Expenditure/Expense Accounts

595, Roads/Streets and Other Infrastructure

Added to the definition a reminder that this account should be reported also for proprietary funds.

Revenue/Expenditure/Expense Accounts

599, Payments to Refunded Debt Escrow

Added to the definition a reminder that this account should be reported also for proprietary funds.

Account Structure

1.1.2

The section was revised to discontinue the old terminology regarding the seven-digit account codes (i.e., Prime, BASUB, etc.). The digits are now referred by their location within the code (i.e., first, second, etc.). This change was applied in all places in the BARS manual and the revised sections are not itemized in this listing.

Revenue/Expenditure Accounts Overview

1.14.10

The section was revised to discontinue the old terminology regarding the seven-digit account codes (i.e., Prime, BASUB, etc.). The digits are now referred by their location within the code (i.e., first, second, etc.).

ACCOUNTING

Diversion of County Road Property Tax

3.6.5.20

The BARS previous procedures were revised to better assist compliance with the provisions of the law.

Payroll Accounting

3.8.1

The title was change to Unemployment and Deferred Compensation to better reflect the content of this section. There are no changes in the prescription.

Loans

A new paragraph (3.9.1.30) was added. The paragraph discusses an issue of incorrectly using its own debt instruments as investments.

REPORTING

Reporting Requirements and Filing Instructions for Cities and Counties

4.1.5.10

The reporting matrix was updated to reflect optional reporting of the new Schedule 06.

Fiduciary Fund Resources and Uses Arising from Cash Transactions (C-5)

4.3.13.10, 4.3.13.40, 4.3.13.70

Adding a requirement for counties to include the special purpose districts on the statement C-5.

Also, the format of the statement C-5 was changed. The fiduciary funds should be aggregated according to the fund type (i.e., pension, investment, private-purpose and agency funds plus total column). The instructions and the Online Reporting were updated to incorporate these changes.

Schedule 01

4.8.1.50, 4.8.1.70

Since a requirement for counties to include the special purpose districts on the statement C-5 was added, Schedule 01 has to include data for these districts.

Column 4 – clarified the instruction regarding reporting of revenues and expenses for proprietary funds.

Schedule 06

Schedule 06, Summary of Bank Reconciliation was added. This Schedule is optional for cities and counties for reporting bank activities in the fiscal year 2017. Governments choosing to prepare Schedule 06 do not have to prepare neither Schedule 07 nor 11 for the 2017 fiscal year. Schedule 06 will be required schedule for reporting year ending December 31, 2018.

Schedule 07

Removing the requirement for this schedule, if the city/county choose to prepare Schedule 06.

Schedule 09

Added 4.8.13.71 and 4.8.13.81 regarding reporting loans with forgiveness clause.

Schedule 11

Removing the requirement for this schedule, if the city/county choose to prepare Schedule 06.

Note X – Pension Plans

Additional column for employers’ contributions was added to the matrix.

Note X – Other Disclosures

Added instructions for reporting special items, contingencies and litigations and government combinations.

ONLINE FILING

Annual Street/Road Finance Report

The pilot project with DOT has been extended another year to explore the possibility of an alternative reporting process to the existing Street/Road Finance Report required to filed to DOT for cities and counties.

Fund Balance – Beginning Check

A minimum variance requirement within $1,000 added summarizing Schedule 01 funds reported.


BARS Alerts

4/21/2016 BARS Manual Update - Revisions to the Schedule of Expenditures of Federal Awards (SEFA/Schedule 16)
4/5/2016 BARS Codes for a New Distribution
2/10/2016 BARS Manual Update - Cash BARS only - Pension Accounting and Reporting
2/10/2016 BARS Manual Update - GAAP BARS only - Pension Liabilities
2/8/2016 BARS Manuals Update - BARS Coding of Miscellaneous Revenue

Overview of Significant Changes – Applicable to the Reporting Year 2016

Topic

Reference

Description of Changes

CHART OF ACCOUNTS

Revenue/Expenditure/Expense Accounts

31720, Leasehold Excise Tax

The definition was updated to clarify that this tax can be imposed only by counties and cities and other governments receiving their share of this tax should code the proceeds to 337, Local Grants, Entitlements and Other Payments.

Revenue/Expenditure/Expense Accounts

31740, Timber Excise Tax

The definition was updated to clarify that this tax can be imposed only by counties and other governments receiving their share of this tax should code the proceeds to 337, Local Grants, Entitlements and Other Payments.

Revenue/Expenditure/Expense Accounts

32180, Concessions

A new account was added. This account should be used for revenues from awarding rights to use government’s property. Previously these proceeds were comingled with proceeds from an actual sales and coded to account 36280, Concession Proceeds and 36290, Other Rents, Leases and Concession Proceeds. Proceeds from governments own sales should be accounted for in 34170, Sales of Merchandise.

Revenue/Expenditure/Expense Accounts

32191, Franchise Fees and Royalties

This account was updated to include royalty payments. Previously the royalties were accounted for in 36290, Other Rents, Leases and Concession Proceeds (e.g., property rights, etc.), 34790, Other Fees (e.g., publication royalties, etc.).

Revenue/Expenditure/Expense Accounts

36210, 36230, 36240, 36250, 36260

These accounts were combined into 36200, Rents and Leases. This account is designed only for rentals and leases which are not a part of the governments’ principal operation [those rents and leases should be accounted in the appropriate 340s service and sales accounts].

Revenue/Expenditure/Expense Accounts

36280, Concession Proceeds

Account removed. For revenues from awarding rights to use government’s property use 32180, Concessions. Proceeds from governments own sales should be accounted for in 34170, Sales of Merchandise.

Revenue/Expenditure/Expense Accounts

362900, Other Rents, Leases and Concession Charges

Account removed. The revenues should be accounted in 36200, Rents and Leases, 32191, Franchise Fees and Royalties 34170, Sales of Merchandise or other appropriate account.

Revenue/Expenditure/Expense Accounts

36850, Special Assessment- Operating

The title was changed to Special Assessment – Service and the definition was updated. If the service assessments are related to the governments’ principal operations, they should be coded in 340s as proceeds from sales of goods and services.

Revenue/Expenditure/Expense Accounts

36910, Sale of Scrap and Junk

The title was changed to Sale of Surplus and a definition was added.

Revenue/Expenditure/Expense Accounts

36950, Special Items

The account changed to account 385, Special/Extraordinary Items to better reflect the substance of the transaction [i.e., special items should not be classified as revenue] The account can be also used for extraordinary items, and the title was adjusted to reflect this.

Revenue/Expenditure/Expense Accounts

379, Capital Contributions

The account was removed since the capital contribution category is not applicable to cash basis governments. System development fees should be accounted for in 367, Contributions and Donations from Nongovernmental Sources unless the related costs of the physical connections, etc. are reported as current period expense – then the systems development fees should be reported as operating revenue (340s).

Revenue/Expenditure/Expense Accounts

380, Nonrevenues

  • The title of this section of the chart was changed to Other Increases in Fund Resources.
  • A new account 385, Special/Extraordinary Items was added [previously accounted for in 36950, Special Items – see above row for description].
  • The account 388, Prior Period Adjustments was changed to 38810.
  • Accounts 386 (1), Agency Deposits and 389, Other Nonrevenues were pooled and rearranged into:
    • 38910, Refundable Deposits,
    • 38920, Retainage Deposits,
    • 38930, Agency Type Collections,
    • 38940, Agency Type Deposits,
    • 38960, Agency Type Interest Earnings, and
    • 38990, Other Custodial Activities.

[Updated the definition of these codes to clarify that they should be used for custodial activities only – to record receipts and disbursements from fiduciary funds as well as any custodial activity reported in other fund types. Subaccount detail allows for reporting by major types of custodial activities in order to provide further clarity, align with internal tracking of custodial balances and support analysis.]

(1) The change applicable to the courts’ deposits and remittances was updated on March 14, 2017. The following BARS Alert was sent to all cities and counties at that time.

The BARS codes for agency deposits/remittances were revised this year and BARS account 386/586 was replaced by several 389/589 accounts. However, the recent submissions of the Schedule 01 indicate that this change creates some confusion. To avoid further misunderstanding at this time the Online reporting system will accept court related deposits and remittances coded as 386/586. All other non-court items should be coded to appropriate 389/589 accounts. We have updated the summary of significant changes in the BARS manual.

Revenue/Expenditure/Expense Accounts

51170, Lobbying Activities

New account. The lobbying services were excluded from account 51120, Advisory Services and are now reported separately.

[Lobbying expenditures are subject to specific compliance and reporting requirements, so governments need to separately track them. Also, the separation will allow cross-checking figure against PDC filings.]

Revenue/Expenditure/Expense Accounts

531, Storm Drainage Utilities

The account description was revised to ensure that this account is used only when a local government has a separate utility for storm drainage. The storm drainage projects that are an integral part of streets and roads should be accounted with transportation codes which are generally accounted for in governmental funds.

Revenue/Expenditure/Expense Accounts

580, Nonexpenditures

  • The title of this section of the chart was retitled to Other Decreases in Fund Resources.
  • A new account 585, Special/Extraordinary Items was added [previously accounted for in 36950, Special Items – see account 385 for description].
  • The account 588, Prior Period Adjustments was changed to 58810.
  • Accounts 586 (1) and 589, Other Nonexpenditures were pooled and rearranged into:
    • 58910, Refunds of Deposits,
    • 58920, Refund of Retainage,
    • 58930, Agency Type Remittances,
    • 58940, Agency Type Disbursements, and
    • 58990, Other Custodial Activities.

(1) The change applicable to the courts’ deposits and remittances was updated on March 14, 2017. The following BARS Alert was sent to all cities and counties at that time.

The BARS codes for agency deposits/remittances were revised this year and BARS account 386/586 was replaced by several 389/589 accounts. However, the recent submissions of the Schedule 01 indicate that this change creates some confusion. To avoid further misunderstanding at this time the Online reporting system will accept court related deposits and remittances coded as 386/586. All other non-court items should be coded to appropriate 389/589 accounts. We have updated the summary of significant changes in the BARS manual.

ACCOUNTING

Deposits and Investments

3.2.1

Updated content to focus on an overview of requirements for deposits and investments and refer to the Office of State Treasurer’s Guide to Public Funds Investing for Local Governments publication for details.

Pension Liabilities

3.4.13.30

The Cash-Basis Pension - Illustration 1 spreadsheet has been updated with the 2016 PEFI collective pension amounts.

REPORTING

Fund Resources and Uses Arising from Cash Transactions (C-4)

4.3.12

The titles of subcategories were revised and the two sections below revenues and expenditures were rearranged to provide greater clarity and state-wide comparability. Also, a link was added to the checklist for preparation of financial reports.

Note X – Pension Plans

The pension note has been updated for the second year of pension reporting.

Liabilities (Schedule 09)

4.8.13.110

Added requirement for cities and counties to provide a BARS code for redemption and specific ID Numbers of debt related to streets/roads to accommodate the DOT Annual Street/Road Finance Report.

Assessment Questionnaire (Schedule 22)

For fiscal year 2016, all diking/drainage districts, cemetery districts, mosquito/pest/weed districts, TV reception districts and water conservancy boards are required to submit the Schedule 22.

ONLINE FILING

Annual Street/Road Finance Report

Steps added as a pilot project exploring an alternative to the DOT Annual Street/Road Finance Report.

BARS Alerts

12/23/2015 BARS Manuals Update - 2016 Filing System Update
10/05/2015 BARS Manual Update - GAAP Cities, Counties and Special Purpose Districts - Upcoming Changes
9/30/2015 BARS Manuals Update - Cities and Counties Only - Cash Basis and GAAP - Marijuana Enforcement Code
3/11/2015 BARS Manuals Update - Cash BARS Only - Reserved and Unreserved Cash and Investments
1/6/2015 BARS Manuals Update - Online Filing System Update

Overview of Significant Changes – Applicable to the Reporting Year 2015

Topic

Reference

Description of Changes

CHART OF ACCOUNTS

The new chart of accounts is an interactive application. To see accounts applicable to your government choose an appropriate government type.

Revenue/Expenditure/Expense Account

3132100

The account title was changed to Public Transportation Systems.

Revenue/Expenditure/Expense Account

3322100

The account Equitable Sharing of Federally Forfeited Property was removed.

Revenue/Expenditure/Expense Account

3350301

The account LEOFF Special Funding was added.

Revenue/Expenditure/Expense Account

3360641

The account Marijuana Enforcement was added.

Revenue/Expenditure/Expense Account

3451100

The detailed codes listed in the 3451100, Soil and Water Conservation Services are optional and not required to be reported on the Schedule 01.

Revenue/Expenditure/Expense Account

3573900

The account Miscellaneous District/Municipal Court Cost Recoupment was removed.

Revenue/Expenditure/Expense Account

3688000

The account Deferred Assessment was removed.

Revenue/Expenditure/Expense Account

5010000

The account Depreciation was added.

Revenue/Expenditure/Expense Account

51860

The account 51860 [Risk Management] was changed to 519; account 51920 [Judgements and Settlement] became 51861, account 51970 [Jobbing and Contacting] became 51862; added account 51863 [General Grants and Financial Assistance to Other Governments].

Revenue/Expenditure/Expense Account

5510000

The account 55920 [Public Housing] was moved to 5510000 [Public Housing Services].

Object Codes

00

The object 00 was updated to include account 501[Depreciation] and exclude account 508 [Ending Balances].

ACCOUNTING

Cash Receipting

3.6.1.50

Added new section discussing requirements when a local government receives payments through third party vendors.

Electronic Fund Transfer

3.6

The section was divided into two sections: one for receipts (3.6.6) and other for disbursements (3.8.11).

Voucher Certification and Approval

3.8.5

Added checks and electronic payments.

Grants – Accounting

3.7.1

This section was updated for the New Uniform Guidance. The following subsections contain new information: 3.7.1.10, .40, .50 and .60.

Pension Liabilities

3.4.13

This is a new section discussing the new reporting requirements regarding governments’ pension liabilities. The guideline contains a link to an Excel spreadsheet with calculation instructions.

Transportation Benefit Districts (TBD)

3.11.1.120

This new section discusses accounting and reporting requirements for cities and counties assuming the TBDs as authorized by the 2015 legislation.

Refunding Debt

3.4.14

This is a new section which discussed refunding debt. The guidelines include coding and reporting the transactions on the Schedule 09.

Accounting for LOCAL Program Financing Activities

3.4.11

This section was revised to provide better guidelines for accounting and reporting of LOCAL program. It does not contain new requirements, only clarifies existing instructions.

Utility Tax

3.6.13

This is a new section discussing accounting and reporting tax on utilities.

REPORTING

Supplementary and Other Information

Schedules 09 (Liabilities) and 16 (SEFA), if applicable, are required from all local governments; however since they are an integral part of the audit reports they were moved from the SAO Annual Report Schedules category to Supplemental and Other Information category to properly align with the audit reports.

Revenues/Expenditures/Expense (Schedule 01)

4.8.1.25

Local governments completing the Schedule 01 for fiscal years ended on or after December 31, 2015 must ensure the data submitted is accurate. The Online filing system will calculate ending fund balances/net position using government-submitted information. If the SAO calculated ending balances/net position result in a variance from the local government’s submitted ending balances of greater than $1,000, the government will not be able to submit its annual report until corrected.

Liabilities (Schedule 09)

Schedule 09 debt and liability IDs were changed from categorizing by fund type to categorizing based on obligation type (i.e., general obligations, revenue and other non-G.O. obligations and assessment obligations). The change allows for better alignment of categories with the debt limit calculation and avoids the need to allocate certain liabilities between different IDs in different categories. Since Schedule 09 uses general, revenue and assessment obligations as titles, the re-alignment will also improve the accuracy of this presentation. In addition, several ID numbers were added to facilitate calculation of debt limit and an ID number was also added for pension liabilities (264.30). Please review and update ID numbers.

Expenditures of Federal Awards (Schedule 16)

4.8

This is a transition year between the requirements of OMB Circular A-133 and the new Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards 2 CFR 200 (Uniform Guidance). This section has been updated for the new Uniform Guidance as it will be applicable for the majority of the BARS users, specifically those entities with a calendar year end. The effective date for the Audit Requirements, which include the SEFA requirements, of the new Uniform Guidance found in Subpart F of 2 CFR 200 is for fiscal years beginning after December 26, 2014. For those entities which the Audit Requirements of the new Uniform Guidance is not effective yet (fiscal years beginning prior to December 26, 2014), we left the references to the OMB Circular A-133 in parenthesis. Click here for the new Uniform Guidance. Also sections 4.8.5.125 and 126 were added and Question 2 was revised.

Information for Schedule 16 was updated in the BARS Manual in the fall of 2015; however, several items were inadvertently missed in those updates. The changes, which were put into effect on April 20, 2016.

Here are the changes to the SEFA, with corresponding information from the Uniform Guidance:

Amounts passed through to subrecipients: Same information, but a location change.

(b) Schedule of Expenditures of Federal Awards. ... At a minimum, the schedule must:

(4) Include the total amount provided to subrecipients from each Federal program.

Change: Therefore, a column is being added to the SEFA and input for these amounts, and the disclosure will not be needed. No additional information is being requested, since the pass-through information was previously reported in the notes.

Use of de minimis indirect cost rate: Additional affirmative disclosure by governments.

(6) Include notes that describe that significant accounting policies used in preparing the schedule, and note whether or not the non-Federal entity elected to use the 10% de minimis cost rate as covered in § 200.414 Indirect (F&A) costs.

Change: The BARS Manual information for the SEFA notes has been updated, along with an instruction stating that it’s not an optional disclosure.

Basis of Accounting note disclosure: (Minor change) Language was added to the sample note to recognize the fact that pre- and post-Uniform Guidance grants may have different bases for recognizing costs (i.e., cost principles). This disclosure will be needed during the transition period when a mixture of pre- and post-Uniform Guidance awards may be shown on the SEFA.

Risk Management (Schedule 21)

Minor updates to add options and clarify questions encountered in practice.

Note X – Debt Service Requirements

The reporting requirements changed from reporting by debt type to reporting principal, interest and total amount. Also, if applicable, local governments are required to provide disclosure regarding their refunding and debt guaranties activities.

Note X – Pension Plans

The cash basis local governments are required to report their pension related liabilities in this new note and on their Schedule 09. The BARS manual in accounting part discusses the new pension accounting and reporting. It also contains a link to Excel spreadsheet with examples of calculation of these liabilities.

Questionnaire for Small Local Governments Accountability Audits (Schedule 22)

4.8.14

The Schedule 22 applicability expanded to include all cash-basis fire districts. Further, all conservation districts filing the Schedule 22 are required to submit the requested Schedule 22 attachments. Schedule 22 introductory training is provided via YouTube video, located here.

BARS Alerts





Overview of Significant Changes – Applicable to the Reporting Year 2014

Topic

Reference

Description of Changes

CHART OF ACCOUNTS

Revenue/Expenditure/Expense Accounts

This Excel book contains three spreadsheets. The spreadsheets are different versions of the same BARS chart:

Above&Prescribed contains all prescribed accounts (including grants) and summary accounts which are above prescribed level and indicate categories of revenues and expenditures;

Prescribed_Only contains all prescribed accounts (including grants) but excludes summary accounts;

Prescribed_NoFederal_Grants contains only prescribed accounts and exclude federal grants.

These spreadsheets are just examples of different versions serving different purposes. You may reformat the chart of accounts similarly to meet your needs; however when reporting only valid prescribed accounts applicable to your entity type should be included on Schedule 01.

Account Structure

1.1.2.30

TheLocal Option field was removed from prescribed BARS code structure. The local governments can add additional digits for their internal purposes in any part of their BARS code; however when reporting to the SAO they have to follow the seven digit code requirement. The entire section was adjusted to reflect this update. The change does not have any impact on BARS coding since the removed fields were never prescribed.

Revenue/Expenditure/Expense Accounts

In previous versions we indicated unprescribed digit with an X. In the current chart of accounts the X was replaced with 0 which, except for two instances where is specifically designated (general fund number and object code for fund balances, nonexpenditures, and transfers-out) indicates unprescribed digit.

Revenue/Expenditure/Expense Accounts

Coding federal (direct - 331/indirect - 333), ARRA (direct - 3391/indirect - 3392), capital (direct – 374/indirect – 375) grants was simplified. The local governments have to use only first two digits of the CFDA for BARS coding. The BARS code still has to be seven digits long; however the last two digits are not prescribed.

Revenue/Expenditure/Expense Accounts

3360104

New account 3360104, Court Cost Reimbursement – Children’s Attorney was added.

Revenue/Expenditure/Expense Accounts

3695000

Added a new account for special items.

Revenue/Expenditure/Expense Accounts

562

The description of the account 562, Public Health Services contains the link to the DOH listing of elements/subelements for this BARS code. The supplement is no longer listed with BARS manuals.

Object Codes

The object codes are not listed together with revenues and expenditures. They are now listed in a separate section.

BUDGETING

The entire budgeting part of manual was replaced with new one. There are NO changes in requirements. The revision included removal of outdated or unnecessary prescriptions and adding statutory requirements for special purpose districts.

ACCOUNTING

Reserved and Unreserved Cash and Investments

3.1.8

Added new section discussing how to properly classified beginning and ending cash and investments. There is no substantive change to the classification. The new section provides only an expanded discussion of the classification. The section was added 03/10/2015.

Money Held in Trust

3.2.4

Updated the discussion of interest on deposits. Clarified the accounting requirements for Superior Court trust funds, emphasizing the need to reconcile accounts monthly.

Compensating Balances

3.2.5

Clarified the discussion of compensating balances and added informational links to MRSC and GFOA.

Accounting for LOCAL Program Financing Activities

3.4.11

Added guidelines for how to account for the LOCAL program.

Imprest, Petty Cash and Change Funds

3.8.8.30

Added that for financial reporting purposes, revolving funds should be reported at their authorized balance in whichever reported fund is predominately served by the account and expenditures should be recorded when submitted for replenishment. This reporting will match the reconciled balance of each revolving fund so long as replenishment is done at fiscal year-end as expected.

REPORTING

Reporting Requirements and Filing Instructions for Cities and Counties

Reporting Requirements and Filing Instructions for Special Purpose Districts

4.1.5.60

4.1.6.60

All subsequent discoveries of errors and omissions in the annual report – from the date of original submission up through the end of the audit applicable to that period – are required to be corrected by resubmitting the annual report. For any misstatements discovered during the audit, governments should ensure open communication with the audit team about the correction. Any misstatements discovered after the audit is completed that affect Schedule 01 should be recorded as a prior period adjustment. If misstatements discovered after completion of the audit are material, governments should immediately alert their audit team.

GAAP versus Cash Reporting

4.1.7

The section discusses advantages and disadvantages of GAAP or cash basis reporting. This information was previously available on our website and now is incorporated into BARS manual.

Fund Resources and Uses Arising from Cash Transactions (C-4)

Fiduciary Fund Resources and Uses Arising from Cash Transactions (C-5)

4.3.12.15

4.3.13.15

Added a requirement to update incorrect financial statements.

Note 1- Summary of Significant Accounting Policies

The note was revised to conform to the reporting and auditing standards for cash basis entities. The local governments are required to follow the new format. This and other notes are available in the Reporting Templates.

Note X-Deposits and Investments

The note was expanded to include deposits and different forms of investments. The local governments are required to follow the new format. This and other notes are available in the Reporting Templates.

Revenue/Expenditure/Expense (Schedule 01)

4.8.1.50

In Column 2 added that the government reports only one fund, it should indicate the fund type and use 0XX for the governmental fund and 4XX for the proprietary fund type.

Expenditure of Federal Awards and State Financial Assistance (Schedule 16)

4.8.5

The Schedule of State Assistance was excluded from the Schedule 16 and it became a separate Schedule 15. There are no changes in the reporting requirements for this Schedule. Adjustments related to split of the previous Schedule 16 into two schedules were carried through the Manual.

The federal expenditures should be still reported on the Schedule of Expenditures of Federal Awards (Schedule 16). In addition to the requirement to submit a data collection form and reporting package to the Federal Audit Clearinghouse, governments are required to submit a copy of the reporting package to each pass-through entity per OMB Circular A-133 section .320 (e), which provides the results of the audit. As a courtesy, the SAO will distribute the reporting package to each pass-through agency listed on the SEFA if you will provide the following contact information:

  • Contact name
  • Contact email address
  • Contact phone number

Questionnaire for Small Local Governments Accountability Audits (Schedule 22)

4.8.14

The Schedule 22 was updated for 2015 to: improve specific targeting of questions to entities based on government type, eliminate questions that would normally be marked, “NA,” due to a previous question’s response, improve the ability to navigate the Schedule 22 and allow entities to upload requested supplemental attachments directly to the Schedule 22, when requested, within the online filing application. Additionally, our Office now offers guidance to all Schedule 22 questions, which is available by following the link located in the BARS manual Schedule 22 instructions.

APPENDICES

Glossary of Accounting Terms

Removed the outdated glossary of accounting terms.

Overview of Significant Changes

The listing of changes focuses only on significant ones; revisions which do not have a substantive impact on accounting or reporting are not listed.