Section 110.20  Fund Accounting

a)         Financial administration requires that each transaction be identified for administrative and accounting purposes. The first identification is by "fund" which is an independent fiscal and accounting entity, requiring its own set of self-balancing accounts, and created in accordance with special regulations, restrictions, and limitations that earmark each fund for a specific activity or for attaining certain objectives (see Table A). Each fund must be accounted for so that the identity of its resources and obligations and its revenues and expenditures is continually maintained.

b)         The number of funds to be maintained by a particular LEA depends on the nature of its operations rather than on the size of the LEA. Whenever a tax levy is authorized for a given purpose, proper legal accountability for the revenues and expenditures is required. This results in a minimum of two funds for every operating school district in Illinois:  an Educational Fund and an Operations and Maintenance Fund.

c)         If the LEA filed a levy for municipal retirement and filed a levy for social security and Medicare only purposes, then the LEA must maintain a Municipal Retirement/ Social Security Fund.

d)         If taxes are levied to retire bond principal and to pay bond interest, and/or service charges thereon, then the LEA must maintain a Bond and Interest Fund for each outstanding bond issue.

e)         If pupils are transported at LEA expense either to and from school or for other purposes, a Transportation Fund must be maintained.

f)          If bonds are sold to finance construction (other than Fire Prevention and Safety), a Site and Construction and Capital Improvements Fund must be maintained to account for the bond proceeds of each bond issue (other than Fire Prevention and Safety).

g)         If bonds are sold for a Working Cash Fund, a separate fund must be created. This fund would also be created by the filing of a working cash tax levy.

h)         If buildings are rented from the Capital Development Board, a Rent Fund must be maintained.

i)          If taxes are levied for an approved capital improvements project (as described in the resolution and on the ballot), then revenues/expenditures must be identified separately within the Site and Construction and Capital Improvement Fund.

j)          If taxes are levied on bonds sold for an approved Fire Prevention and Safety project, then the LEA must identify each project/amendment separately within the Fire Prevention and Safety Fund.

k)         In addition to the funds, there are two self-balancing groups of accounts for maintaining accounting records of capital assets and long-term liabilities.  The General Fixed Assets Account Group records all tangible fixed assets of the LEA including land, buildings, machinery, equipment, furniture and fixtures, regardless of which fund provided the cash at the time of purchase. The General Long-Term Debt Account Group records all outstanding bonds of the LEA and other long-term debt.

l)          To designate the nine funds and two groups of accounts by symbol rather than using the full descriptions, this standardized numerical designation will be used as the code for this dimension.

1)         10 for Educational Fund

2)         20 for Operations and Maintenance Fund

3)         30 for Bond and Interest Fund

4)         40 for Transportation Fund

5)         50 for Municipal Retirement/Social Security Fund

6)         60 for Site and Construction and Capital Improvements Fund

7)         70 for Working Cash Fund

8)         80 for Rent Fund

9)         90 for Fire Prevention and Safety Fund

10)         98 for General Fixed Assets Account Group

11)         99 for General Long-Term Debt Account Group

m)        LEA's shall use funds appropriate to the legal requirements of their operations and code such funds in the fund dimension. For example, if fund 50 is not used because it is unnecessary to maintain a Municipal Retirement/Social Security Fund, Code 50 cannot be used to designate the Site and Construction and Capital Improvements Fund since 60 has already been (for the purpose of this dimension) assigned as the standard code for the Site and Construction and Capital Improvements Fund.

(Source:  Amended at 18 Ill. Reg. 5178, effective March 22, 1994)