2013 ThirdEditionoftheUniformChartof
- (Georgia Department of Community Affairs, 2013) ⇒ Georgia Department of Community Affairs. (2013). “Third Edition of the Uniform Chart of Accounts for Local Governments in Georgia."
Subject Headings: Georgia's Standard Local Government Chart of Accounts (2013)
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PART I. INTRODUCTION
In 1997, the Georgia General Assembly passed the Local Government Uniform Chart of Accounts and Reporting Act (originally HB 491, O.C.G.A. §36-81-3 (e)). It called for the Georgia Department of Community Affairs (DCA) to develop a uniform chart of accounts for all local governments in the state. The chart of accounts contained in this document is fully compliant with generally accepted accounting principles (GAAP) and initially was approved by the Georgia Department of Audits and Accounts (State Auditor) and adopted by the Board of Community Affairs in December 1998.
Beginning in fiscal years ending in 2001, local governments in the state must have adopted and used this uniform chart in their accounting records, audited financial statements, including Comprehensive Annual Financial Reports (CAFRs), and reports to state agencies. They also are required to classify their transactions in conformity with the fund, balance sheet, revenue, and expenditure classification descriptions contained in this chart. While local government accounting records must reflect these account classifications, more detailed sub-accounts can be used as long as they roll up into accounts specified in this document.
Although DCA references the uniform chart of accounts numbering system when requesting information (such as in the annual Report of Local Government Finances), local governments are not required to use it in their accounting systems. As local governments develop new accounting systems, however, they are encouraged to adopt this numbering system. Since DCA will use these account numbers and descriptions to format its requests for financial data and information, using this chart of accounts for accounting purposes will facilitate local governments’ financial reporting. All cities, counties, and consolidated governments in the state, including their component units, are required to adhere to the provisions of this chart of accounts. This chart is not intended to impose an additional level of accounting requirements on component units where state agency–mandated charts of accounts already exist (e.g., boards of education, county boards of health). These other charts are by reference incorporated into this document.
The list of account titles used in this chart is not comprehensive or exhaustive. Local governments should supplement these classifications as necessary to provide information for policy and management purposes. This chart does not, for instance, include specific detailed revenue and expense classifications for utilities, transportation systems, airports, hospitals, and numerous other activities commonly accounted for in proprietary funds. In these cases, local governments are expected to adhere to the financial reporting and accounting requirements of the appropriate regulatory agencies or professional associations. For example, electric and gas utilities may conform to requirements of the Federal Energy Regulatory Commission (FERC) and water and sewer utilities to pronouncements of the National Association of Regulatory Utility Commissioners (NARUC). However, the chart does include accounts necessary to allow local governments to use this chart to account for these proprietary-type activities.
While this chart of accounts requires local governments to account for and report on the use of financial resources in a consistent and uniform format, it does not specify how local government operations are organized and managed. How local governments organize and manage their operations is appropriately the responsibility of local policymakers (e.g., expenditure accounts focus on function and activities rather than departments). The purpose of this chart is to provide a uniform format for local government financial reporting and accounting, allowing state agencies to collect more reliable and meaningful financial data and information from local governments in the state. It is also the hope of DCA officials and the State Auditor that the chart will prove to be a useful resource for local government policymakers and managers on matters related to budgeting, accounting, and financial reporting.
The chart will require periodic revisions to incorporate changes in GAAP or state law or to address errors and omissions. To facilitate this process, any revisions to the uniform chart of accounts will be posted to DCA’s website with instructions regarding which page ( s) should be replaced with updated pages in the chart. Also, a full explanation of such changes will be provided, with citations to the applicable changes in state law, Governmental Accounting Standards Board (GASB) statements, or other circumstances precipitating the change. These changes will be maintained on the DCA website in chronological order for ongoing reference purposes.
BACKGROUND
All local governments prepare and submit reports of their financial position and operations to various state agencies. Most local governments are required to have annual audits prepared of their financial affairs and transactions of all their funds and activities and to submit those audits either annually or biennially to the state auditor [ O.C.G.A. §36-81-7 (a) ]. They also are required to submit financial information and other data to the Department of Community Affairs. Examples include an annual report of their finances (revenues, expenditures, assets, and debts of all funds [ O.C.G.A. §36-81-8 (b) (1) (A) ]) and the rate of taxation for the hotel / motel tax and the amounts collected and expended (O.C.G.A. §48-13-56).
Historically, most local governments in Georgia have developed their own accounting and financial reporting systems that adhere to GAAP as prescribed by the GASB. Nevertheless, considerable variation existed from one jurisdiction to another in how financial information and data were presented in annual audits and reported to DCA. This variation in approaches to financial reporting limited the utility of local government reports. It also made it difficult for local governments interested in comparing their financial and service delivery situations to make valid and useful comparisons — a complaint registered periodically with DCA by local government officials from around the state.
Policymakers in Georgia recognized for some time the need for a local government uniform chart of accounts. It was discussed in various committees of the General Assembly since the mid-1970s. More recently, it was raised in the deliberations of the Georgia Future Communities Commission (GFCC). The Commission was created by a Joint Resolution (H.R. 324) of the Georgia General Assembly in 1995. Its membership was appointed by the Speaker of the House, Lieutenant Governor, Association County Commissioners of Georgia, Georgia Municipal Association, County Officer’s Association, and Georgia Chamber of Commerce and included local government officials, state legislators, and business leaders. The Commission was created to “examine governmental, social, and economic issues confronting local governments” and “to develop specific proposals to ensure that all of Georgia’s local governments become catalysts for economic prosperity.” As one of its “guiding principles, ” the Commission expressed an interest in “encouraging accountable, responsive, and understandable local government and cost effective, financially sound service delivery systems.” In its review of local government service delivery and financing, the Commission noted how difficult it is “in the absence of a standard chart of accounts” to compare revenues and expenditures from one jurisdiction to another and for state and local officials and citizens to make meaningful judgments about local government operations and finances. The Commission included a proposal for a uniform chart of accounts in its initial set of recommendations developed for the General Assembly in 1996, believing that a uniform chart would contribute in a significant way to this important principle — more accountable, responsive, and understandable local government (GFCC 1998: pp. 4, 5, and 13).
PROCESS OF DEVELOPING THE UNIFORM CHART OF ACCOUNTS
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DOCUMENT OVERVIEW
This document contains a uniform chart of accounts for local governments in Georgia. It was modeled after the Government Finance Officers Association’s (GFOA’s) Illustrative Chart of Accounts contained in Appendix C of the Blue Book. Like GFOA’s Illustrative Chart, it includes only accounts used in accounting and financial reporting and is divided into two major sections: a Summary of Account Classifications and Account Descriptions. Both sections follow the same general format, including fund structure, balance sheet accounts, revenues and other financing sources, and expenditures and other financing uses, including function, activity, and object classifications. Appendix A contains a figure summarizing common uses of balance sheet accounts.
In developing this document, deviations from the Blue Book’s illustrative chart of accounts have been incorporated when necessary to reflect laws and policies of the state, the intent of the Local Government Uniform Chart of Accounts and Reporting Act (HB 491), and the perspectives of Georgia finance professionals and local officials. Other account descriptions in this chart have been derived from the sources listed at the end of this Introduction and from selected Georgia cities’ and counties’ charts of accounts. As noted earlier, in an effort to solicit local input, DCA created a Uniform Chart of Accounts Advisory Committee composed primarily of local government officials. Its recommendations contributed significantly to the content of this document. The Committee focused its attention on the fund structure, cost allocation and indirect costs, and the numbering system and account coding scheme. Fund Structure — The Advisory Committee was sensitive to the state’s interest in comparability and recognized the value of requiring that local governments consistently account for some activities in specified funds. Thus, while this chart gives local governments some latitude in the use of funds, it requires that selected governmental activities be accounted for in specific funds. For example, water and sewer, solid waste, and various utilities must be accounted for in enterprise funds and law libraries, confiscated assets, and E-911 in special revenue funds (see Part II for a complete list of required funds). The use of these funds is not limited to the activities specified in this chart. Local governments can choose to account for other activities in these fund types as well.
Cost Allocation and Indirect Costs — Since salaries and benefits are a major cost of local government, consistent allocation of these costs is important for achieving comparable cost data for localities in this state. This chart therefore requires all local governments to charge salaries and benefits directly to the various functions, activities, and departments receiving the benefit.
Allocation of indirect costs also has significant implications for understanding and comparing the cost of local government service delivery. The 2001_edition of this chart required all local governments with reported expenditures / expenses totaling $10 million or more to allocate general fund administrative costs within the general fund and to all other funds within the reporting entity. However, GASB Statement 34 requires governments that allocate indirect costs in their day-to-day accounting records to break them out and report them in a separate column in the government-wide financial statements. Therefore, this chart of accounts no longer requires local governments to allocate indirect costs.
Numbering System / Account Code — The Advisory Committee recommended a numbering system and an account coding structure that is based on the numbering system in GFOA’s Illustrative Chart. Table 1, which follows, summarizes the account coding system used in this chart of accounts, which closely follows the Committee’s recommended system. The structure includes a 13-digit account code, which involves 3 digits for the fund classification; 4 digits for the function and activity; 2 digits for the account class; and 4 digits for the balance sheet accounts, revenue sources, or expenditure objects. Additional digits for department are optional and can be added to expenditure and revenue accounts as desired. Table 1 identifies the numbers of the major categories: fund codes (100–999); balance sheet — assets (11), liabilities (12), and equities (13); revenues (31–39); expenditures (51–61); and functions (1000–9999). Table 2 provides coding examples for specific balance sheet, revenue, and expenditure transactions.
In GFOA’s Illustrative Chart, the numbering system was intended primarily for reference. While local governments are not required to use the specific account numbers included in this chart, they are required to classify their financial transactions in a manner consistent with the account descriptions (more detailed subaccounts can be used as long as they roll up to the accounts used here). Note, however, that financial reports submitted to DCA and other state agencies must be consistent with this uniform chart of accounts. Because the annual Report of Local Government Finances includes not only the account names but also the account numbers, incorporating the account numbers in this chart into your accounting system will greatly facilitate the completion of this report.
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PART II. ACCOUNT CLASSIFICATIONS OVERVIEW
FUND CLASSIFICATIONS
Governmental accounting systems should be organized and operated on a fund basis. All of a government’s individual funds are first classified by category and then by fund type within each category.
There are three categories:
- . Governmental funds — used to account for activities primarily supported by taxes, grants, and similar revenue sources.
- . Proprietary funds — used to account for activities that receive significant support from fees and charges.
- . Fiduciary funds — used to account for resources that a government holds as a trustee or agent on behalf of an outside party that cannot be used to support the government’s own programs.
As previously discussed, generally accepted accounting principles (GAAP) require governments to use governmental fund types for their general government operations and proprietary fund types to account for their business-type activities. However, GAAP allow considerable flexibility in this area. Therefore, some governments account for certain activities in governmental fund types, and other governments account for the same activities in proprietary fund types. This inconsistency greatly contributes to the incomparability of data regarding the cost of service delivery and operations. A major objective of the Local Government Uniform Chart of Accounts and Reporting Act (HB 491) is obtaining financial information and data that allow for meaningful comparisons among local governments in the state. Consequently, this chart of accounts requires that local governments use enterprise funds to account for certain specific activities (e.g., electric, gas, cable television, water and sewer, hospitals, solid waste, airports, etc.) and special revenue funds for other specific activities (e.g., law libraries, confiscated assets, E-911, grants, special districts, hotel/motel tax, etc.). The use of enterprise and special revenue funds is not limited to these activities. Local governments may choose to account for other activities in these fund types as well.
The three categories listed above are divided into the following fund types and individual funds. Governments must use each individual fund included in this chart of accounts, if applicable.
GOVERNMENTAL FUND TYPES
100 General fund 200 Special revenue funds 205 Law library fund 210 Confiscated assets fund 212 County drug abuse treatment & education fund 215 Emergency 911 telephone fund 220 Grant fund(s) (required if the fund’s expenditures exceed 2% of the general fund’s expenditures, otherwise the use is optional) 235 Transportation special district local option sales and use tax (TSPLOST) 25% discretionary fund 250 Multiple grant fund 270 Special district fund(s) (e.g., fire or recreation district) 275 Hotel/motel tax fund 280 Rental motor vehicle excise tax fund
300 Capital projects funds 310 General obligation bond fund 320 Special purpose local option sales tax (SPLOST) fund 330 Homestead option sales tax (HOST) fund 335 Transportation special district local option sales and use tax (TSPLOST) fund 340 Grant fund 350 Local resources fund 360 Revenue bond fund
400 Debt service funds 410 General obligation bonds fund 420 Revenue bonds fund 430 Special purpose local option sales tax (SPLOST) fund 450 Permanent funds
PROPRIETARY FUND TYPES
500 Enterprise funds 505 Water and sewer fund 510 Electric fund 515 Gas fund 520 Combined utility fund 525 Cable television fund 530 Hospital fund 535 Nursing home fund 540 Solid waste fund (collection, recycling, and/or disposal) 545 Mass transit fund 550 Airport fund 555 Special facilities fund 570 Telecommunication fund
600 Internal service funds
FIDUCIARY FUND TYPES
700 Trust and agency funds 710 Agency funds 715 Clerk of Superior Court fund 720 Clerk of Probate Court fund 725 Clerk of State Court fund 730 Sheriff’s fund 735 Recorder’s court fund 740 Tax commissioner’s fund 745 Municipal Court fund 750 Magistrate Court fund 760 Other post-employment benefits fund 770 Trust funds 780 Other post-employment benefits trust fund 775 Pension trust fund 785 Private purpose trust fund
STATEMENTS OF POSITION ACCOUNT CLASSIFICATIONS
The following is a summary of accounts typically used for the governmental fund balance sheet, the government-wide statement of net position, and the proprietary fund statement of net position. Detailed descriptions of these balance sheet accounts are presented in the Account Descriptions Section (following this section). Local governments are not required to use every account listed but may include more detail as desired. However, the accounts needed to complete any state report, most specifically the Report of Local Government Finances, must be used and may not be changed and/or combined. The accounts designated with an asterisk (?) represent the minimum required level of detail for DCA reporting purposes. However, other state and federal reporting requirements as well as the financial information needs of local government administrators and elected officials will necessitate greater detail. Certain valuation accounts that carry credit balances are included among the assets in this list because they are presented with the assets in a balance sheet. For example, the allowance for uncollectible delinquent taxes account appears among the assets, even though it is not an asset, because on the balance sheet the account reduces the amount of reported delinquent taxes receivable to indicate the estimated collectible portion.
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References
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| Author | volume | Date Value | title | type | journal | titleUrl | doi | note | year | |
|---|---|---|---|---|---|---|---|---|---|---|
| 2013 ThirdEditionoftheUniformChartof | Georgia Department of Community Affairs | Third Edition of the Uniform Chart of Accounts for Local Governments in Georgia |