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Financial Accounting for Local and State School Systems, 2003 Edition



Account Classification Description
Quick Code Finder by Number/Category
Code Descriptions in Alphabetical Order

Table of Contents
Introduction
Uses of Information
Budgeting
Governmental  Accounting
Financial Accounting
Cost Accounting and Reporting for Educational Programs
Activity Fund Guidelines
Summary of Account Code Changes and other Appendices
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Contact:
Frank Johnson
(202) 502-7362



Chapter 6, Account Classification Descriptions

Classifications of Expenditures

Object
This classification is used to describe the service or commodity obtained as the result of a specific expenditure. The nine major object categories are further subdivided. The definitions of the object classes and selected sub-object categories follow:
 Code  Description
500* Other Purchased Services. Amounts paid for services rendered by organizations or personnel not on the payroll of the school district (separate from Professional and Technical Services or Property Services). Although a product may or may not result from the transaction, the primary reason for the purchase is the service provided.
 
510 Student Transportation Services. Expenditures for transporting children to and from school and other activities. (Used only with function 2700)
 
511* Student Transportation Purchased From Another School District Within the State. Amounts paid to other school districts within the state for transporting children to and from school and school-related events. These include payments to individuals who transport themselves or their own children or for reimbursement of transportation expenditure/expenses on public carriers. Expenditures for the rental of buses that are operated by personnel on the school district payroll are recorded not here but under object 442. (Used only with function 2700)
 
512* Student Transportation Purchased From Another School District Outside the State. Payments to other school districts outside the state for transporting children to and from school and school-related events. (Used only with function 2700)
 
519 Student Transportation Purchased From Other Sources. Payments to persons or agencies other than school districts for transporting children to and from school and school-related events. (Used only with function 2700)
 
520 Insurance (Other Than Employee Benefits). Expenditures for all types of insurance coverage, including property, liability, and fidelity. Insurance for group health is not charged here but is recorded under object 200. (Used with functions 2310 or 2610)
 
530 Communications. Services provided by persons or businesses to assist in transmitting and receiving messages or information. This category includes telephone and voice communication services, telephone, and voicemail; data communication services to establish or maintain computer-based communications, networking, and Internet services; video communications services to establish or maintain one-way or two-way video communications via satellite, cable, or other devices; postal communications services to establish or maintain postage machine rentals, postage, express delivery services, or couriers. (Usually used with functions 2230, 2320, or 2410)
 
540 Advertising. Expenditures for announcements in professional publications, newspapers, or broadcasts over radio and television. These expenditures include advertising for such purposes as personnel recruitment, legal ads, new and used equipment, and sale of property. Costs for professional advertising or public relations services are not recorded here but are charged to object 340. (Usually used with functions 2300 or 2500)
 
550 Printing and Binding. Expenditures for job printing and binding, usually according to specifications of the school district. This includes designing and printing forms and posters, as well as printing and binding school district publications. Preprinted standard forms are not charged here but are recorded under object 610. (Usually used with function 2530, but may be assigned to other functions)
 
560 Tuition. Expenditures to reimburse other educational agencies for instructional services to students residing within the legal boundaries described for the paying school district. (Used only with function 1000)
 
561* Tuition to Other School Districts Within the State. Tuition paid to other school districts within the state.
 
562* Tuition to Other School Districts Outside the State. Tuition paid to other school districts outside the state.
 
563* Tuition to Private Sources. Tuition paid to private schools.
 
564* Tuition to Educational Service Agencies Within the State. Tuition paid to agencies such as regional educational service centers for educational services to students.
565* Tuition to Educational Service Agencies Outside the State. Tuition paid to agencies such as regional educational service centers for educational services to students.
 
566* Tuition to Charter Schools. Tuition paid to charter schools for services provided in accordance with the established charter for that school.
 
567* Tuition to School Districts for Voucher Payments. Tuition paid to school districts for students using a state or local voucher program. School districts and state departments of education should use this code for all payments made to school districts for voucher programs.
 
569*

Tuition-Other. Tuition paid to the state and other governmental organizations as reimbursement for providing specialized instructional services to students residing within the boundaries of the paying school district.

So-called reverse state aid payments, which arise out of education finance equalization efforts, are not coded here. Rather, these should be established on the balance sheet or statement of net assets at the time taxes are levied as Due To State Government. (These amounts are not shown as revenues to the school district.)

 
570 Food Service Management. Expenditures for the operation of a local food service facility by other than employees of the school district. Included are contracted services, such as food preparation, associated with the food service operation. Direct expenditures by the school district for food, supplies, labor, and equipment would be charged to the appropriate object codes. (Used only with function 3100)
 
580 Travel. Expenditures for transportation, meals, hotel, and other expenditure/expenses associated with staff travel for the school district. Payments for per diem in lieu of reimbursements for subsistence (room and board) also are charged here. (Used with all functions except 5000)
 
590 Intereducational, Interagency Purchased Services. Purchased services other than those described above. Any interdistrict payments other than tuition or transportation should be classified here. This code identifies other payments for services made between a school district and other governmental entities. This code should be used so that all interdistrict payments can be eliminated when consolidating reports from multiple school districts at state and federal levels (when a question arises about whether to code such payments to the 300 series of objects or to this code). (Used primarily with function code 2000)
 
591* Services Purchased From Another School District or Educational Services Agency Within the State. Payments to another school district within the state for services rendered, other than tuition and transportation fees. Examples of such services are data processing, purchasing, nursing, and guidance. This code should be used so that all interdistrict payments can be eliminated when consolidating reports from multiple school districts at state and federal levels (when a question arises about whether to code such payments to the 300 series of objects or to this code).
 
592* Services Purchased From Another School District or Educational Service Agency Outside the State. Payments to another school district outside the state for services rendered, other than tuition and transportation fees. Examples of such services are data processing, purchasing, nursing, and guidance. This code should be used so that all interdistrict payments can be eliminated when consolidating reports from multiple school districts at state and federal levels (when a question arises about whether to code such payments to the 300 series of objects or to this code).
 

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600* Supplies. Amounts paid for items that are consumed, are worn out, or have deteriorated through use or items that lose their identity through fabrication or incorporation into different or more complex units or substances. Refer to Appendix E for the criteria for distinguishing between a supply item and an equipment item. Equipment that has a cost lower than the school district's capitalization threshold should be coded in this series instead of to a 700 series code.
 
610

General Supplies. Expenditures for all supplies (other than those listed below) for the operation of a school district, including freight and cartage.

A more thorough classification of supply expenditures is achieved by identifying the object with the function-for example, audiovisual supplies or classroom teaching supplies. (Used with all functions except 5000)

 
620 Energy. Expenditures for energy, including gas, oil, coal, and gasoline, and for services received from public or private utility companies.
 
621 Natural Gas. Expenditures for gas utility services from a private or public utility company. (Used with functions 1000, 2610, and 3100)
 
622 Electricity. Expenditures for electric utility services from a private or public utility company. (Used with functions 1000, 2610, and 3100)
 
623 Bottled Gas. Expenditures for bottled gas, such as propane gas received in tanks. (Used with functions 1000, 2610, and 3100)
 
624 Oil. Expenditures for bulk oil normally used for heating. (Used with function 2610)
 
625 Coal. Expenditures for raw coal normally used for heating. (Used with function 2610)
 
626 Gasoline. Expenditures for gasoline purchased in bulk or periodically from a gasoline service station. (Used with functions 2650 and 2710)
 
629 Other. Expenditures for energy that cannot be classified in one of the foregoing categories.
 
630 Food. Expenditures for food used in the school food service program. Food used in instructional programs is charged under object 610. (Used only with function 3100)
 
640 Books and Periodicals. Expenditures for books, textbooks, and periodicals prescribed and available for general use, including reference books. This category includes the cost of workbooks, textbook binding or repairs, and textbooks that are purchased to be resold or rented. Also recorded here are the costs of binding or other repairs to school library books. (Used with all functions except 5000)
 
650 Supplies-Technology-related. Technology-related supplies include supplies that are typically used in conjunction with technology-related hardware or software. Some examples are diskettes, parallel cables, and monitor stands. (Used with all functions but primarily used with 2230 and 2580)
 
700* Property. Expenditures for acquiring capital assets, including land, existing buildings, existing infrastructure assets, and equipment.
 
710* Land and Land Improvements. Expenditures for the purchase of land and the improvements thereon. Purchases of air rights, mineral rights, and the like are included here. Also included are special assessments against the school district for capital improvements such as streets, curbs, and drains. Not included here, but generally charged to objects 450 or 340 as appropriate, are expenditures for improving sites and adjacent ways after acquisition by the school district. (Used with functions 4100, 4200, and 4600)
 
720* Buildings. Expenditures for acquiring existing buildings. Included are expenditures for installment or lease payments (except interest) that have a terminal date and result in the acquisition of buildings, except payments to public school housing authorities or similar agencies. Expenditures for the contracted construction of buildings, for major permanent structural alterations, and for the initial or additional installation of heating and ventilating systems, fire protection systems, and other service systems in existing buildings are recorded under object 450. Buildings built and alterations performed by the school district's own staff are charged to objects 100, 200, 610, and 730, as appropriate. This code is used with governmental funds only. (Used with function 4500 only)
 
730* Equipment. Expenditures for the initial, additional, and replacement items of equipment, such as machinery, furniture and fixtures, and vehicles.
 
731 Machinery. Expenditures for equipment usually composed of a complex combination of parts (excluding vehicles). Examples are lathes, drill press, and printing presses. (Usually used with functions 1000 and 2600)
 
732 Vehicles. Expenditures for equipment used to transport persons or objects. Examples are automobiles, trucks, buses, station wagons, and vans. (Usually used with functions 2650 and 2700)
 
733 Furniture and Fixtures. Expenditures for equipment used for sitting; as a support for writing and work activities; and as storage space for material items. (Used with all functions, except 5000)
 
734 Technology-Related Hardware. Expenditures for technology-related equipment and technology infrastructure. These costs include those associated with the purchase of network equipment, servers, PCs, printers, other peripherals, and devices. Equipment that has a cost lower than the school district's capitalization threshold should be coded to object code 650, Supplies-Technology-Related. (Used with all functions but primarily used with 2230 and 2580)
 
735 Technology Software. Expenditures for purchased software used for educational or administrative purposes that exceed the capitalization threshold. Software costs that are below the school district's capitalization threshold should be coded to object code 650, Supplies-Technology-Related. (Used with all functions but primarily used with 2230 and 2580)
 
739 Other Equipment. Expenditures for all other equipment not classified elsewhere in the 730 object series.
 
740* Infrastructure. Expenditures for purchased infrastructure assets by the school district. These items include water/sewer systems, roads, bridges, and other assets that have significantly longer useful lives than other capital assets. (Used with functions 4000 only but primarily used with functions 4200 and 4600)
 
790 Depreciation. The portion of the cost of a capital asset that is charged as an expense during a particular period. In accounting for depreciation, the cost of a capital asset, less any salvage value, is apportioned over the estimated service life of such an asset, and each period is charged with a portion of such cost. Through this process, the cost of the asset is ultimately charged off as an expense. (Used with all functions, except 5000)
 
800 Debt Service and Miscellaneous. Amounts paid for goods and services not otherwise classified above.
 
810* Dues and Fees. Expenditures or assessments for membership in professional or other organizations or payments to a paying agent for services rendered. (Used with functions 1000 and 2000)
 
820 Judgments Against the School District. Expenditures from current funds for all judgments (except as indicated below) against the school district that are not covered by liability insurance, but are of a type that might have been covered by insurance. Only amounts paid as the result of court decisions are recorded here. Judgments against the school district resulting from failure to pay bills or debt service are recorded under the appropriate expenditure accounts as though the bills or debt service had been paid when due. (Used only with function 5000)
 
830 Debt-Related Expenditures/Expenses
 
831* Redemption of Principal. Expenditures to retire bonds (including current and advance refundings) and long-term loans. (Used only with function 5000)
 
832* Interest. Expenditures for interest on bonds or notes. (Used only with function 5000)
 
833 Amortization of Bond Issuance and Other Debt-Related Costs. Expenses in connection with the amortization of bond and other debt issuance costs, including lease-purchase debt issuance costs. Included are amortized deferred gain and loss amounts in connection with the defeasance of bonds. This code is used in Proprietary and Fiduciary funds only. (Used only with function 5000)
 
834

Amortization of Premium and Discount on Issuance of Bonds. Expenses amortized as debt premium and/or discount in connection with the issuance of debt. This account is used in Proprietary and Fiduciary funds only.

An additional account (revenue object code 6200) has been established for accounting for the amortization of debt premiums such that districts may report premium and discount amortization separately as required in certain states (or where only credits may be reported for revenue codes and only debits for expenditure codes). However, account 834 may be used to record all discount and premium amortization (reported as a contra revenue). (Used only with function 5000)

 
890 Miscellaneous Expenditures. Amounts paid for goods or services not properly classified in one of the objects included above.
 
900 Other Items. Used to classify transactions that are not properly recorded as expenditures/expenses but require control and reporting by the school district.
 
910 Fund Transfers Out. Includes all transactions conveying financial resources from one fund to another within the district.
 
920 Payments to Escrow Agents for Defeasance of Debt. (Used only with function 5000)
 
930

Net Decreases in the Fair Value of Investments. Losses recognized from the sale of investments or changes in the fair value of investments. Losses represent the excess of the cost or any other basis at the date of sale (or valuation) over sales value (or fair value). For financial reporting purposes, GASB Statement 31 requires that all investment income, including changes in the fair value of investments, be reported as revenue in the operating statement.

This account has been established for investment losses so that districts may report gains or losses separately as required in certain states (or where only credits may be reported for revenue codes and only debits for expenditure codes). However, account 1530 may be used to record all investment gains or losses (reported as a contra revenue).

 
931 Realized Losses on Investments. Losses recognized from the sale of investments. Losses represent the excess of the cost or any other basis at the date of sale over sales value. For financial reporting purposes, the net of all realized and unrealized investment gains and losses should be reported as a single line in the financial statements; however, this account and the following account may be used for internal tracking purposes.
 
932 Unrealized Losses on Investments. Losses recognized from changes in the value of investments. Losses represent the excess of the cost or any other basis at the date of valuation over fair value. For financial reporting purposes, the net of all realized and unrealized investment gains and losses should be reported as a single line in the financial statements; however, this account and the previous account may be used for internal tracking purposes.
 
940

Losses on the Sale of Capital Assets. The excess of book value of the capital assets sold over the amount received. This account is used in Proprietary and Fiduciary funds only and the statement of activities. Revenue account 5300 is used for Governmental funds.

This account has been established for accounting for losses from capital asset sales such that districts may report gains or losses separately as required in certain states (or where only credits may be reported for revenue codes and only debits for expenditure codes). However, account 1930 may be used to record all gains or losses on these sales (reported as a contra revenue).

 
950 Special Items. Used to classify special items in accordance with GASB Statement 34. Included are transactions or events within the control of the school district administration that are either unusual in nature or infrequent in occurrence. For some districts, this may include termination benefits resulting from workforce reductions or costs in connection with an early retirement program offered to all employees represented in one or more classes of employees. Special items also include events that are not within the control of the district. In the governmental funds, these items should be separately captioned or disclosed.
 
960 Extraordinary Items. Used to classify items in accordance with APB Opinion No. 30 that are transactions or events that are both unusual in nature and infrequent in occurrence. For some districts, this includes significant costs related to a natural disaster caused by fire, flood, tornado, hurricane, or hail storm or costs related to an environmental disaster.

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Footnote

*Account codes that are necessary for the NCES reporting are noted with an asterisk (*).

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