Accounts and Reports

GAAP POLICY AND PROCEDURE MANUAL

• The statement of net assets and the statement of activities should be prepared using the economic resources measurement focus and the accrual basis of accounting. Paragraph 16.
• The statement of revenues should categorize program revenues and general revenues. Paragraph 47 - 53 as amended by GASB 37 Paragraph 12-13.
• The financial statements for governmental funds should be presented using the current financial resources measurement focus and the modified accrual basis of accounting. Paragraph 79.
• Proprietary fund statements of net assets and revenues, expenses, and changed in fund net assets should be presented using the economic resources measurement focus and the accrual basis of accounting. Paragraph 92.

• The following general ledger accounts are set up in STARS for accounts receivables. However, no accounting entries are made in STARS to these accounts.
  • 1010 - Accounts receivable
  • 1011 - Taxes receivable
  • 1012 - Miscellaneous receivables
  • 1013 - Interest receivable
• Revenues are recorded in STARS on a cash basis.
  • The general ledger account number for Revenues is 4001.
  • General ledger account number 5010 (Operating Transfers In) is also used to record certain types of revenue.
  • The operating file of STARS contains numerous revenue subobject codes that are used to account for revenue by source.
  • The revenue subobject codes were modified to separate out operating vs. capital grants.

• Journal entries record accounts receivable / deferred revenues for exchange and non-exchange transactions.
• A conversion table is used to assign STARS revenues to the various functional classifications (i.e., charges for services, operating grants and contributions, permanent endowments & capital contributions) and the general classifications (i.e., taxes, grants and contributions not restricted to specific programs, interest and investment earnings, miscellaneous, transfers) needed for GAAP.
• The conversion table allows taxes to be classified by type and purpose (property tax, income and inheritance tax, sales and excise tax and gross receipts tax).
• Adjustments will be made as necessary where exceptions to the coding exist.
• Determine current vs. long-term receivables.

• Policies regarding revenue recognition.
• Description of nonexchange transactions.
• Gross receivables, allowances for uncollectibles and net receivables.
• Details regarding significant components that are obscured by the financial statements. Significant balances not expected to be collected within one year of the date of the financials should be disclosed.
• Description of the types of transactions included in program revenues.
• The government's policy for defining operating and non-operating revenues of proprietary funds.

• The Universities will provide the information to be used in recording their accounts receivables, deferred revenues, and prepaid tuition.
• The Department of Revenue will provide the information needed to record the taxes receivable. These receivable amounts will be separated out to show what revenue should be deferred for the governmental funds for their modified accrual statements. The taxes receivable include the amounts for the following funds:
  •  State General Fund
    • Sales
    • Withholding
    • Individual income
    • Corporate income
    • Motor carrier
    • Retailers - compensating
    • Consumers - compensating
    • Cigarette / tobacco
    • Marijuana / controlled substances
    • Other
  • Kansas Department of Transportation
    • Sales
    • Retailers - compensating
    • Consumers - compensating
  • Kansas Water Office
    • Water protection
•  SRS will provide the amounts for their receivables which include food stamp, Medicaid and drug rebate.
•  The Treasurer's Office will provide the amounts for interest receivable.
• A conversion table was developed to convert the revenue subobject codes used in the operating file to the revenue classifications needed for financial statement reporting. It was determined that the revenue subobject coded in the operating file would not be changed.
• It was determined that the Kansas Department of Transportation has the majority of the state's capital grants. The estimated amount of the capital grants will be provided by them.

• Government-wide statements:
  • Revenues are recorded when earned.
  • Nonexchange transactions, in which the State gives (or receives) value without directly receiving (or giving) equal value in exchange, include income and sales taxes, grants, entitlements, and donations. On an accrual basis, revenues received from income and sales taxes are recognized in the fiscal year the underlying exchange occurred. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
• Governmental funds:
  • The State considers all revenues reported in the governmental funds to be available if the revenues are due at year-end and collected within sixty days thereafter.
  • Under the terms of grant agreements, the State funds certain programs by a combination of specific cost-reimbursement grants, categorical block grants, and general revenues. Thus, when program expenses are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the State's policy to first apply cost-reimbursement grant resources to such programs, followed by general revenues.
• The following captions will be used for financial reporting of program revenues:
  • Charges for services
  • Operating grants
  • Capital grants
• The following captions will be used for financial reporting of general revenues:
  • Taxes (property tax, income and inheritance tax, sales and excise tax, gross receipts tax)
  • Investment earnings
  • Other revenue
  • Transfers
• Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program.
• Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.