The Kenai Peninsula Borough School District wrapped up its series of public budget explainers this week with a presentation about the district’s chart of accounts.
The Budget 101 series began in September as a way to illuminate the district’s budget process to board members and the public.
Finance Director Liz Hayes led all of the presentations. On Monday, Dec. 4, she explained that the chart of accounts identifies different budget components with numbers called account codes.
The standardized system, last reviewed in 2018, allows districts across Alaska to report their finances in a uniform way and be in compliance with federal standards.
“The chart of accounts has several account code elements,” Hayes said. “There are three that are required to be in our account codes, and two that are optional components of our account code structure.”
The first required component is fund, which includes things like the amount of money the district gets from the state for its general operation, special funds like those from the federal government, and student activity funds, those raised by student groups for their own use.
The next code component is function, which distinguishes revenues and expenditures. The final required component is object, which includes categories like teachers or supplies.
Optional account codes include location and program. Program includes categories like “science” or “football” which are designated by the district.
All of those elements together spit out a code like this example, provided by Hayes: 110-07-4100-0600-3150. That particular code describes an item from the general fund, at Kenai Central High School, with the function of regular instruction, the program ‘science’ and the object ‘teachers’.
“All of our data in the finance system is going to have some type of account code structure assigned to it,” she said.” So this is just one example out of thousands of combinations that we have in this district.”
Those codes appear in board expense reports, finance reports and other places. Hayes shared this year’s chart, showing the different components of the chart organized by function and object.
Organized by function, “regular instruction” is the largest piece of the pie at $55 million, with special education and operations and maintenance coming up next. But when displayed by object, the biggest expense is salaries, at $68 million. Combined with benefits, these objects account for more than $100 million of the district’s budget.
“You can see that these salaries and benefits take up most of the pie,” she said.
Hayes said every other object category is small, and doesn’t offer a lot of wiggle room. As the district faces a $13 million deficit for the next fiscal year, administrators have already warned that payroll costs will come under necessary scrutiny.
