Accounting Procedures Handbook

7 CHART OF ACCOUNTS I. OVERVIEW Maryland Boards of Education are required to adhere to the definitions of accounts contained in the Financial Reporting Manual for Maryland Public Schools (FRMMPS) when submitting expenditure information to the Maryland State Board of Education in order to ensure reasonable comparability between school system’s financial information. While a Board of Education may use a unique chart of accounts, which is different in structure than the state’s chart, they are required to report in accordance with the provisions outlined in the FRMMPS. The Chart is broken down at the broadest level into the following overall funds: Fund 1 Current Expense Fund or G/F (General Fund) Fund 2 School Construction Fund Fund 4 Debt Service Fund Fund 5 Food Services Fund Fund 6 Student Activities Fund Fund 7 Trust/Agency Fund Fund 8 General Fixed Assets Group Each Fund is next broken down into Classifications as follows: Classification 1 Financial Resources (Revenue) Classification 2 Expenditures Classification 3 Assets Classification 4 Liabilities Classification 7 Fund Balance/ Retained Earnings Under Classifications are Objects, which are allocated as follows: Object 1 Salaries and Wages Object 2 Contracted Services Object 3 Supplies and Materials Object 4 Other Charges Object 5 Land Buildings and Equipment Object 6 Principal Object 7 Interest Object 8 Transfers Refer to the FRMMPS for a copy of the State Chart of Accounts. II. CONTROL OBJECTIVES • To establish a coding structure that supports internal financial reporting and decision making. • To establish a linkage to the state chart of accounts to meet the requirements of the Financial Reporting Manual for Maryland Public Schools. • To ensure adequate monitoring and maintenance of the Board’s internal chart of accounts and linkage to the state chart of accounts. III. PROCEDURES Any request to establish a new general ledger account number must be approved and processed by the Budget Manager after confirming compliance with the FRMMPS. Annually the Accounting