New Jersey Department of Education

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Private Schools for Students with Disabilities

May 23, 2003

TO:	Directors, Private Schools for Students with Disabilities
FROM:	Richard Rosenberg, Assistant Commissioner Division of Finance
SUBJECT:	Private Schools for Students with Disabilities - Revised Chart of Accounts and Cost Category Assignments for the Chart of Accounts

The 2002-2003 school year is the first year that private schools for the disabled must meet the cost percentages contained in N.J.A.C. 6A:23-4.2(a)3. It’s important that these calculations are made as simple as possible. The original chart of accounts for private schools for the disabled contained various object codes that were not assigned to only one cost category which may have presented potential difficulties in the calculation of the cost category percentages. It was originally determined that this could be dealt with by a school’s internal accounting staff and would not cause serious problems and wouldn’t warrant additional line items. After revisiting this issue, I feel it’s necessary to implement revisions to make these calculations as simple as possible.

An example of this is the salaries and fringe benefits of school social workers which were originally assigned to line numbers #151, #152 and #153 in (6) Undistributed Expenditures – Attendance & Social Worker Services, Function code #211. The salaries for school social workers are considered instruction but the other salaries associated with this Function and the other costs in Function code #211 are considered support services. As a result, a new Function code 211.1 (6a Undistributed Expenditures – Social Worker Salaries and Fringes only) was added along with new object codes on lines #157.1, #157.2 and 157.3. If new line items were not added it would present problems in the cost category percentage calculations.

After reviewing the chart of accounts and discussions with representatives of the Private Schools for Students with Disabilities, it was determined that these revisions must be incorporated into the private school’s accounting records for 2002-2003 by the school’s staff. The listing of the additions and revisions appears as an attachment to this memorandum as Additions and Revisions to Exhibit C – Chart of Accounts. These additions and revisions must be incorporated into the private school’s accounting records for the 2002-2003 school year. A revised Prescribed Financial Report reflecting these revisions will be available by June 15, 2003.

Listed below are the updates and revisions to Exhibit C which also impact Exhibits B and F:

Questions and Answers – New Chart of Accounts System (Update) – This is an update to the Q&A that was originally issued in August 2002. The original questions and answers are listed as items #1 through #34 and remain the same except for page number changes on the revised exhibits. The new questions and answers begin as #35 through #51.

Exhibit B – Narrative Explanations of the 2002-2003 Chart of Accounts - This document is a detailed explanation of the chart of accounts and has been updated as a result of the need for additional line items and revisions to the chart of accounts. The shaded areas represent new or revised sections.

Exhibit C – 2002-2003 Chart of Accounts - This document is the Revised Chart of Accounts for private schools and includes all the possible line items that a private school would need to record costs. The shaded areas represent new or revised sections.

Exhibit F – 2002-2003 Chart of Accounts to Cost Category Assignments - The attached document lists, for each line item in the new chart of accounts, the cost category assignment that each line item will be assigned for purposes of the cost category percentage calculation. The last column lists those line items included in the total costs for certification purposes, but will remain outside the cost category percentage calculation for determining the minimum/maximum instructional and administrative percentages. The shaded areas represent new or revised sections.

Please note that all of the line items are assigned to one cost category only with the exception of line numbers #275 through 282 in Unallocated Benefits which are assigned across all cost categories. If the school chooses not to charge benefits, by function to object code 205 for all fringe benefits except pension contribution and object code 232 for pension contributions, then those fringe benefits must be charged to Unallocated Benefits, function 291 to object codes 205 through 290. If Unallocated Benefits are charged, then all fringe benefits (except pensions) will be allocated to the function and cost category based on the salary by function to the total of all salaries by the independent auditor in the audited financial statements.

These revisions are now available on the Department of Education’s website at www.state.nj.us/education. Under the pull down "Overview of DOE Programs", double click on "Finance." Under the "Division of Finance" homepage, double click on "Private Schools for the Disabled" under the heading "Most Requested Items" which is on the right side of the page. The revisions are under 2002-2003 New Chart of Accounts System and marked as "revisions" or "issued."

If you have any questions concerning this memorandum, please contact Jim Verner at (609) 984-4229 or Elise Sadler-Williams at (609) 777-4483.

ADDITIONS AND REVISIONS TO
EXHIBIT C - CHART OF ACCOUNTS
(Also impacts Exhibits B and F)

1.	The addition of IEP required in-house student job positions was added to object codes #106.
2.	Fingerprinting was deleted from all object codes #205 and #290. The original COA issued 4/1/2002 contained fingerprinting as an allowable cost which is contrary to N.J.S.A. 18A:6-7.2. This cost will be considered an allowable cost for the 2002-2003 school year. However, effective July 1, 2003 the payment for fingerprinting costs will be considered non-allowable.
3.	Object codes for School Sponsored Co-Curricular Activities Instruction and School Sponsored Athletics – Instruction for employee benefits (except pension) - #205 and pension contributions - #232 were added as lines #143.1 and #143.2 and as lines #147.1 and #147.2.
4.	Object codes for School Social Workers - salaries - #100, employee benefits (except pension) - #205 and pension contributions - #232 were added as lines #157.1, #157.2 and #157.3.
5.	Object codes for School Nurses - salaries - #100, employee benefits (except pension) - #205 and pension contributions - #232 were added as lines #164.1, #164.2 and #164.3.
6.	An object code for food/beverages for activities which are limited to $3,000 was added as #894, line #183.1 as Undistributed Expenditures – Other Support Services Student – Regular – Miscellaneous Expenditures – Meeting/Other.
7.	Object codes for School Librarians - salaries - #100, employee benefits (except pension) - #205 and pension contributions - #232 were added on lines #202.1, #202.2 and #202.3.
8.	The name of object code #891, line #226 Advertising Expenses (restricted) was changed to Miscellaneous Expenditures – Advertising Expenditures (restricted).
9.	The name of object code #892, line #227 Entertainment was changed to Miscellaneous Expenditures – Entertainment.
10.	A new object code #893, line #227.1 was added for Miscellaneous Expenditures – Real Estate Taxes.
11.	The job functions related to curriculum development were contained in the original Exhibit B in Section 11 as Improvement of Instruction Services/Other Support Services – Instructional Staff which is considered a Support Service. In the old chart of accounts these costs were considered instructional costs and in Exhibit D, page 3, line 56 these costs were mistakenly identified as a classroom instruction cost and transferred from Support Services to Instruction. All costs associated with curriculum development must be considered Improvement of Instruction Services/Other Support Services – Instructional Staff which is considered a Support Service.

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