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BARS Cash Manual

 

Object Codes

Reminder: Object 50, Intergovernmental Services and Payments is still acceptable for 2018 financial reports; however it will be invalid for reports starting year 2019 and thereafter. The listing below contains new definitions for Objects 30 and 40 which are applicable to coding of your 2019 expenditures. Please review the definitions to ensure their proper application.

1.4 Object Codes

00 Depreciation, Amortization, Other Decreases in Fund Resources and Transfers-Out

Use this category of object only with the accounts 501, 581, 585, 588, 589, and 597

10 Salaries and Wages

Amounts paid for personal services rendered by employees in accordance with the rates, hours, terms and conditions authorized by law or stated in employment contracts. This category also includes overtime, hazardous duty or other compensation construed to be salaries and wages. Subdivide this account as necessary for local purposes (i.e., regular pay, overtime pay, sick pay (employee related), sick pay (non-employee related), vacation pay, shift differential, and other taxable compensation).

Personal services do not include fees and out-of-pocket expenditures for professional or consultant services performed on assignments. Such services are properly classified as Services.

20 Personnel Benefits

Those benefits paid by the employer as part of the conditions of current or past employment. Subdivide as needed for local purposes. Example: insurance, unemployment compensation, OASI (FICA) – employer-paid portion, uniforms, pension, and workers' compensation. Payments by self-insurance and trust funds to retired or disabled employees or their beneficiaries, employer payments to pension systems and to state agencies for unemployment and disability insurance. Use object 40 for payments from self-insurance funds for property and liability claims.

30 Supplies for Consumption and Resale

Include:

  • items purchased for consumption (e.g., office supplies, forms, agricultural supplies, chemicals, laboratory supplies, cleaning supplies, clothing, construction materials, drugs, electrical supplies, feed for animals, household supplies, lubricants, medicines, painting and plumbing supplies, books, publications, etc.);
  • items purchased for resale (e.g., automotive repair parts, grave markers and liners, central store merchandise, maps, code books, concession supplies, fuel, trees, books and other literary materials, office supplies, forms, agricultural supplies, chemicals, laboratory supplies, cleaning supplies, clothing, construction materials, drugs, electrical supplies, feed for animals, household supplies, lubricants, medicines, painting and plumbing supplies, books, publications, etc.); also power, gas, water and waste disposal services purchased for resale only – if purchased for the governments’ own consumption, use object 40;
  • fuel used to generate power, heating, and operate engines and vehicles (e.g., coal, diesel fuel, gasoline, oil, propane gas, wood, etc.);
  • small tools and minor equipment.

40 Services and Pass-Through Payments

Use this object for governmental type and other professional and technical services provided by other governments (federal, state, local), other funds, or by private entities.

Include:

  • professional services (e.g., accounting, auditing, advertising, computer services, medical, dental and hospital, management consulting, custodial, messenger, testing, monitoring, cleaning, engineering, architectural, legal, investment services, etc.);
  • communication (e.g., postage, internet, telephone, facsimile, shipping, etc.);
  • travel (e.g., mileage, lodging, meals, etc.);
  • taxes (e.g., sales and use, B&O tax, etc.) and operating assessments (i.e., payments to other governments or funds based on levies against property or income of the government or a fund);
  • permits, licenses, accreditation, certification and other fees which are necessary for operations paid to the federal, state or local governments (e.g., survey fees, laboratory accreditation fees, disposal fees, discharge permits, biosolid permits, FERC licenses, etc.);
  • operating rentals and leases (GAAP entities should use object 60 for capital leases; cash basis entities should use object 70 for the principal payments and object 80 for interest payments on capital leases);
  • insurance (e.g., liability, theft, bonds, casualty, etc.; however use object 20 for insurance applicable to personnel benefits);
  • utility services (e.g., water, sewer, gas, electricity, waste disposal, television, etc.; however use object 30 for power, gas or water purchased for resale);
  • contracted repairs and maintenance (use object 60 for construction contracts);
  • other (e.g., court costs, investigation, judgments, damages, dues, subscriptions, memberships, registrations, information and credit services, laundry and sanitation services, filing, recording, witness fees, printing, binding, tuition, etc.).

Also include eligible intergovernmental pass-through payments, contributions and grants from federal, state, and own or other local resources to other governments or nongovernmental entities.

60 Capital Outlays

Expenditures related to purchase or construction of assets considered capital according to the government capitalization threshold policy. This object should be used only with accounts 594 and 595.

Include expenditures related to acquisition of, rights to, or additions to capital assets, including incidental costs such as legal, appraisal and brokerage fees, land preparation and demolishing buildings, fixtures and delivery costs. This category of object includes purchases and construction of major capital assets which are purchased or constructed by the external party. Those constructed or fabricated by the municipality should be classified under other object classes; i.e., wages under Salaries and Wages, materials under Supplies, etc. Exclude small tools and minor equipment (use object 30).

Include land, land and other improvements (e.g., easements, site improvements such as excavation, fill, grading, utility installation, removal, relocation or reconstruction of property, retaining walls, fencing, landscaping, land acquisition costs and related expenditures, intangible rights to land, etc.); acquisition, construction and improvements of buildings (e.g., administrative and office buildings, garage, shops, firehouses, jails, libraries, zoos, park buildings, coastal and riverine structures, alleys, athletic fields, water/sewer systems, fuel depots, dikes, levees, signs and signals, landscape and vegetation, etc.); machinery and equipment (e.g., police dogs and horses, computer software/hardware, artwork, etc.); assets acquired under executory conditional sales contracts (RCW 39.30.010), lease-purchase agreements, installment purchase agreements, and similar arrangements that defer payment for capital outlays over a period of time (GAAP only; cash basis governments should use 594PP70 (principal) and 594PP80 (interest) for capital lease payments.

70 Debt Service – Principal

Use with codes 591, 593, 594 (cash basis only), 596 and 599. Include general obligation, revenue, special assessment bonds, capital leases, installment purchases, anticipation and other notes, anticipation warrants, contracts, intergovernmental loans, other debt, LOCAL program payments, etc.

80 Debt Service – Interest and Issuance Costs

Use with codes 592, 593, 594 (cash basis only) and 599. Include interest on short and long-term external debt, interest on interfund debt, interests on debt to joint ventures and affiliates, LID assessments, interest on intergovernmental debt, leases, interest paid on overdue taxes (RCW 84.69.070), debt issuance and other debt service costs.

This section was last edited by SAO on 01/09/19
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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

8/19/2019New BARS Code (This alert applies only to counties and cities)
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.