All public school districts in the State of Wisconsin are required to report their financial information using the Wisconsin Uniform Financial Accounting Requirements (WUFAR). The WUFAR dictates the appropriate method for recording revenue and expenses.
Each account number is broken into six segments:
Fund
Type
Location
Object or Source
Function
Project
School districts utilize fund accounting. A fund is an accounting entity with its own self-balancing set of accounts. Each fund, generally, has revenues, expenses, assets, liabilities, and fund balance. Each fund can be thought of as its own bucket – containing its own activity and independent from the other funds.
The account type is used to indicate whether an account is used to record revenues (R), expenses (E), assets (A), liabilities (L), or fund balance (Q).
Location is used to track revenues and expenses by building. Each school within the district is assigned a unique location code. Location codes are currently used for internal purposes only.
Expenses are classified by object, which indicates what is being purchased (e.g. wages, services, utilities, equipment, supplies). Revenues are classified by source, which reflects the origination of the revenue (e.g. tax levy, state aid, federal grant, student fees).
For revenues and expenses, the function defines the purpose. For balance sheet accounts, the function identifies the specific type of asset, liability, and fund balance. Functions fall under one of these high-level categories:
1XXXXX – Instruction: Accounts for expenses related to the instruction provided to students (e.g. teacher wages and classroom supplies).
2XXXXX – Support Services: Accounts for expenses that support instruction and district operations (e.g. staff development, transportation, maintenance, counselors, food service).
3XXXXX – Community Services: Accounts for expenses in the community services fund (Fund 80).
4XXXXX – Non-Program Transactions: Accounts for transfers between funds, tuition paid to other entities, and contracted instructional services.
7XXXXX – Assets: Accounts for all fund assets.
8XXXXX – Liabilities: Accounts for all fund current liabilities.
9XXXXX – Fund Balance: Accounts for each fund balance.
Revenues and expenses may be tracked internally by program or project using this code. The most common application of the project code is for grants, whereby all grant revenue and expenses are tracked together.
Revenue limits (or caps) are a fundamental concept of school finance in Wisconsin.
Legislation enacted in the early 1990's limits the amount of revenue a public school district may generate through property taxes and state general aid.
All else equal, when one of the revenue limit factors increases, the opposite decreases. For example, when state equalization aid decreases, the local property taxes increase (all else equal).
This concept can be thought of like a teeter totter. The horizontal board is the revenue limit -- it's a defined size. When one side goes up, the other goes down.