UNIFORM CHART OF ACCOUNTS Expenditure/Expense/Deduction Objects
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EXPENDITURE OVERVIEW: Expenditure objects relate to the services or commodities obtained by a county as the result of an expenditure. For counties operating on a modified accrual basis, the expenditure occurs when goods or services are received and the related fund liability has occurred. Since expenditure objects vary considerably from county to county, we have not assigned numbers to any specific accounts. Rather, we have given examples of the type of accounts to be used within each category. We have, for example, assigned 50 numbers (6100 to 6149) for salary and wage accounts and have given examples of some accounts that might be used. However, counties may change or expand this listing as it fits their needs but should attempt to stay within the designated numbering parameters. PUBLIC AID ASSISTANCE: This category includes all of the expenditure objects that are specific to public aid assistance. The first 100 expense object numbers have been reserved for this purpose. They are 6001 to 6099. These numbers are placed before all other expense objects so that human services (community social services) budgets would show this spending category first, since it is the most significant expenditure within this function. As with all other object categories, only a few of the more relevant objects are listed specifically. Other public aid assistance expenditure objects will be standardized from time to time as the need arises. Until then, counties should use expenditure object code numbers that are relevant to their specific public aid assistance requirements, but within the 100 numbers designated above. Examples of public aid assistance objects: Payments to recipients Payments for recipients
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PERSONAL SERVICES: Personal services include salaries and employee benefits. They do not include independent contractors or self-employed individuals. Account numbers 6100 to 6149 have been reserved for various salary and wage accounts as might be identified by counties. Account numbers 6150 to 6199 have been reserved for various types of employee benefits. Salaries and Wages The following are the basic minimum salary categories maintained by most counties. This can, however, be expanded to reflect any county’s need for additional specific salary category information. Salaries and wages - permanent Salaries and wages - part-time Salaries and wages - temporary Salaries and wages - overtime Salaries and wages - other salaries and wages Per diem amounts paid in lieu of salaries Employee Benefits Insurance This category is for the county’s share of insurance paid for the benefit of employees. The numbers 6150 to 6159 have been reserved for the various types of employee insurance to which the county may be contributing. (Group hospitalization, major medical, group life, etc.) Retirement This category is for the county’s share of contributions to various retirement funds. The numbers 6160 to 6169 have been reserved for the various types of retirement programs to which the county may be contributing.
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Other Employee Benefits This category is for all other amounts paid by counties on behalf of employees but not included in the employees’ gross salary. The numbers 6170 to 6199 have been reserved for these types of expenses. Some of the more common employee benefits have been listed below. Social security contributions Unemployment compensation Workers’ compensation Tuition and education expenses Other employer contributions SERVICES AND CHARGES: Services and charges include services rendered by individuals who are not on the county payroll. They also include charges made by one department of a county to other departments or services performed by county employees under special arrangements not included in their salaries or wages. Communication and Transportation Services This category includes amounts paid for services provided by persons or businesses to assist in transmitting information or transporting people or materials. Account numbers 6200 to 6229 are reserved. Telephone and telegraph Wireless telephone Internet service Postage and postal box rental Freight, UPS, and trucking charges Prisoner conveyance Other communications and transportation usage
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Typing, Photocopying, Duplicating, and Binding This category includes amounts paid for services related to typing, photocopying, etc. This does not include work performed by county employees in their normal performance of duties, except in the event that these services were performed as part of an intergovernmental fund service, where these services were billed to user departments. Account numbers 6230 to 6239 have been reserved. Photocopying and duplicating Publications and brochures Publicity Subscriptions and Dues This category is for amounts paid for advertising, legal notice publications, membership dues, and other related expenses. Account numbers 6240 to 6249 have been reserved. Advertising Membership dues and registration fees Public relations Utility Services This category is for amounts paid for services usually provided by public utilities such as water, sewage, and garbage collection. Included are gas and electricity not used for fuel. Account numbers 6250 to 6259 have been reserved. Electricity Gas Sewer
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Professional and Technical Fees for Service This category is for amounts paid for services that can be performed only by persons with specialized skills and knowledge. Included are the services of architects, engineers, auditors, dentists, medical doctors, lawyers, consultants, accountants, etc. Account numbers 6260 to 6299 have been reserved. Legal Consulting Data processing Court reporting Court services Repair and Maintenance Services This category is for expenditures for repairs and maintenance services provided by non-county personnel. Include contracts and agreements covering the upkeep of grounds, buildings, and equipment. Exclude costs for new construction, renovating, remodeling, initial and additional equipment considered capital expenditure. Account numbers 6300 to 6329 have been reserved. Machinery and equipment Grounds and grounds improvement Other repair and maintenance services Travel This category is for costs of transportation, meals, hotels, and other expenses associated with traveling on business for all county personnel. Include payments for per diem in lieu of reimbursements for subsistence. Account numbers 6330 to 6339 have been reserved. Motor pool vehicle usage Employee automobile allowance or mileage Hotel and meals travel expense Other travel expenses
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Rentals and Service Agreements This category is for expenditures for the lease or rental of land, buildings, and equipment for the temporary or long-term use by the county. Include vehicles, data processing equipment, reproduction equipment, shop, construction, and maintenance equipment. Account numbers 6340 to 6349 have been reserved. Machinery and equipment rentals Building and facility rentals Land rentals Other Charges This category includes services and charges not included in any of the previous categories. Account numbers 6350 to 6379 have been reserved. Insurance Other miscellaneous charges Interdepartmental Charges This category is provided to reflect the costs of labor or services, materials, and other direct and indirect costs incurred by one department of a county for other departments within a county. Account numbers 6380 to 6399 have been reserved. Accounting Data processing Maintenance Copying Other services Vehicle repairs Snowplowing
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DIRECT MATERIALS AND SUPPLIES: As a general guideline, which may vary with departments, a supply item is any article or material which meets any one or more of the following conditions: 1.
It is consumed in use;
2.
It loses its original shape or appearance with use;
3.
It is expendable; that is, if the article is damaged or some of its parts are lost or worn out, it is usually more feasible to replace it with an entirely new unit rather than repair it;
4.
It is an item, having characteristics of equipment, whose small unit cost (for example, less than $500) makes it inadvisable to capitalize the item (if appropriate); or
5.
It loses its identity by fabricating or incorporating it into a different or more complex item. Office Supplies This category includes expenditures for supplies and materials used in the offices of a county that meet the above criteria. Account numbers 6400 to 6409 have been reserved. Stationery and forms Data processing supplies Other office supplies General Operating Supplies This category includes all supplies and materials purchased for the general operations of a county. Included in this category are custodial supplies and general repair items that do not materially increase the value of an asset. Also included in this category is fuel for buildings, including transportation costs involved in securing and delivering the fuel. Account numbers 6410 to 6429 have been reserved. Food and beverages Custodial supplies Fuel for buildings
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Surgical and Medical Supplies This category includes all expendable supplies and materials used for surgical or medical purposes. Account numbers 6430 to 6449 have been reserved. Drugs and medicine Public health supplies Other Operating Supplies All other operating supplies, excluding road and bridge supplies, are to be included within account numbers 6450 to 6479. Agriculture related supplies Recreation supplies Reference books and library materials Law enforcement supplies Non-Capitalized Equipment Supplies Certain small equipment purchases that are below the capitalization threshold, but will be inventoried for insurance or asset safeguarding purposes, are included within account numbers 6480 to 6499. Small equipment Electronics Small furniture
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Road and Bridge Supplies and Materials Account numbers 6500 to 6559 have been reserved for supplies and material expenditures within the county highway function. Engineering and surveying supplies Aggregates and sand Concrete Traffic signs Culverts Road salt and dust control chemicals Repair and Maintenance Supplies This category includes items which are purchased by a county to repair or maintain equipment or vehicles of a county. Account numbers 6560 to 6599 have been reserved. Gasoline, diesel, and other fuels Motor oil and lubricants Tires, tubes, batteries, and motor vehicle parts Machinery parts Other repair and maintenance supplies CAPITAL OUTLAY: This category is used to record amounts paid for the acquisition or construction of capital assets. Generally, only expenditures that will result in additions to capital assets should be recorded in this category of expenditures. To determine if an item should be capitalized, all of the following criteria must be met: 1.
The life of the item must be one year or longer.
2.
The total cost will exceed the amount established by the county’s policy as the capitalization threshold.
3.
The item purchased is not a repair or replacement part.
4.
An improvement must increase the value or extend the life of item improved.
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All expenditures which meet the above criteria should be charged to one of the following codes. Account numbers 6600 to 6699 have been reserved. Site or Grounds Acquisition Record expenditures for the initial acquisition of real property exclusive of buildings or infrastructure. Exclude expenditures relating to subsequent improvements of site or grounds. Site or Grounds Improvements Record expenditures made subsequent to the acquisition of real property (exclusive of buildings or infrastructure). Include planting of areas devoted to grass, flowers, shrubs and trees, installing or replacing walks, playgrounds, driveways, sewers, flagpoles, fences, and other man-made improvements. Infrastructure Acquisition or Construction Record expenditures made for the acquisition or construction of public infrastructure. Examples include: roads, bridges, tunnels, storm drainage systems, water systems, and dams. Infrastructure Improvements Infrastructure improvements are capital costs that materially extend the useful life or increase the value of the public infrastructure, or both. Buildings Acquisition or Construction Record expenditures made for the acquisition or construction of buildings and installation of heating and ventilating systems; electrical; plumbing; fire protection and other service systems; lockers, elevators, and other equipment built into the building; paint; and other interior or exterior decorating.
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Building Additions Record expenditures made for additions to existing buildings. Additions extend the floor area and include installation of heating, ventilating, electrical, plumbing, and other systems necessary for the additional space provided. Building - Improvements Record expenditures for improvements to (or remodeling of) existing buildings. Improvements and remodeling do not increase the floor area. Include improvements in heating, ventilating, electrical, plumbing, and other systems. Buildings - Leased Record amounts paid under installment lease contracts which have a terminal date and result in the acquisition of buildings. Equipment Purchased Record amounts paid for an equipment item which is defined as a material unit which meets all of the following conditions: 1.
It retains its original shape and appearance with use;
2.
It is nonexpendable; that is, if the article is damaged or some of its parts are lost or worn out, it is usually more feasible to repair it rather than replace it with an entirely new unit (which is not true of supplies);
3.
It represents an investment which makes it feasible and advisable to capitalize the item; or
4.
It does not lose its identity by incorporating it through a different or more complex item.
Include furniture, but exclude built-in equipment which is considered part of the building and so classified. Vehicles which are itemized below are also excluded from equipment.
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Vehicles - Purchased Expenditures for the purchase of all transport conveyances that represent additions or replacements to the existing fleet. Vehicles - Leased Amounts paid under installment or lease contracts that have a terminal date and result in the acquisition of additional or replacement transport conveyances. DEBT SERVICES: This category includes amounts paid for the reduction of principal, interest, and debt service costs for the following: 1.
Bonds, notes, loans, and certificate of participation.
2.
Capital leases or installment purchase agreements.
3.
Other long-term debt.
4.
Short-term financing - payable in the same fiscal year in which the money was borrowed. These payments would not result in an expenditure but rather a reduction of a fund liability. Account numbers 6700 to 6799 have been reserved for this category. Bond issuance costs Bond principal Other debt principal retirement Interest on bonded debt Interest on loans Interest on warrants Other debt service charges Fiscal agent fees Advance refunding escrow additional payments
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OTHER EXPENDITURES: This category is for expenditures for goods and services not otherwise classified. Account numbers 6800 to 6849 have been reserved. They may include intergovernmental payments which are payments by the county to other governmental units. Intergovernmental expenditures Expenditures made by one level or unit of government to another government in support of governmental activities administered by the recipient government. Miscellaneous Expenditures made for minor items not otherwise classified. Refunds This category is for payments made for reimbursement of remittances previously made to the county for which refund is now claimed because of error, failure to receive services, or other reasons. EXPENSES: Proprietary funds present and account for activities on the full accrual basis of accounting. Expenses are recognized when a liability has been incurred. Most of the objects identified previously can be used for proprietary funds. However, some additional expense accounts are required for the full accrual basis. These accounts can fit into similar account ranges already identified or grouped in the range 6850-6879. This section identifies these additional accounts. Depreciation Allocation of the cost of tangible property over the useful life of the property rather than deducting the cost as an expense in the year of acquisition. Bad debt expense Expense for writing off additional receivables not accounted for in the allowance for uncollectible accounts. August 2003 Minnesota County Financial Accounting & Reporting Standards
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Amortization of bond issuance costs Allocation of deferred issuance costs over the life of the debt. Amortization of discount/premium on debt Allocation of premium or discount on issuance of debt over the life of the debt. Amortization of deferred refunding issues’ charges Allocation of the excess of the reacquisition price over the net carrying amount of the old debt over the life of the new debt. Losses on sales/disposal of capital assets Difference between the net book value of a capital asset and any consideration received for the sale or disposal of that capital asset. DEDUCTIONS: It is recommended that, with fiduciary funds, the use of the term “expenses” be avoided. Deductions represent items that reduce fiduciary net assets, except for investing-related expenses. Account numbers 6880 to 6899 have been reserved for these categories: Trust payments Benefit payments Refunds of contributions Payments in accordance with trust agreements Distributions to shareholders Administrative expense These numbers may also be used for payments made out of agency funds. Although agency funds do not report results of operations for financial reporting, these accounts can be used as temporary accounts during the year. They actually represent decreases in liabilities and could include the following items:
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Payments to others Payments to other governments Tax settlements to other taxing districts OTHER FINANCING USES, SPECIAL ITEMS, AND EXTRAORDINARY ITEMS: Other financing uses include financial outflows that are classified separately from expenditures. Special and extraordinary items are outflows for significant unusual and infrequent transactions. Account numbers 6900 to 6999 have been reserved for these categories. OTHER FINANCING USES Interfund transfers out Includes transfers of funds from one county fund to another. Transfers do not represent purchases of goods or services but are used as an accounting entity to show that funds have been handled without having goods and services rendered in return. Payments to refunded bond escrow agent Payments to an escrow agent from advance refunding debt proceeds that are to be placed in irrevocable trust. Discounts on bonds/debt issued The excess of the face value of bonds over the amount received from their sale (excluding accrued interest and issuance costs). SPECIAL ITEMS Outflows and/or losses that result in significant transactions or other events within the control of management that are either unusual in nature or infrequent in occurrence.
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EXTRAORDINARY ITEMS Transactions or other events that result in outflows and/or losses that are both unusual in nature and infrequent in occurrence. OTHER Interfund loan payments Payments made to other funds on loans between the funds.
August 2003 Minnesota County Financial Accounting & Reporting Standards
