Budgeting with Function and Object Codes

Mississippi just released a new Accounting Manual that was revised 5/2021 and is  is effective July 1, 2021.  The new accounting manual is more specific about how expenditures should be budgeted to accurately reflect the purpose of the expenditure.  The new accounting manual will need to be used as we plan for FY22 allocations and for all ESSER allocations.  For many of us, the biggest change is to the identification of function code – 1280 – as the function code to  be used for all student remediation services.  The 1280 function code was at one time used under ESEA for individual supplemental education services (SES) that was available under school improvement for providing students with private tutorial services with outside agencies. This is no longer part of the Mississippi plan.  According to the manual and MDE training, the expenditures that should be assigned to the 1280 function code would be those providing any type of remediation services such as personnel employed as interventionists and during the school day tutors.  Many of us  will be using 1280 as the function code for a number of the expenditures counting toward the  required ARP ESSER 20% allocation to learning loss interventions.

Another change for some districts will be in how summer school has been coded.  According to the new manual, summer school that is for remediation and/or acceleration purposes should be coded to function 1270.  Many use this code; however, it is important to note that the summer school assigned to function 1270 is a program that does NOT provide grade promotion or credit recovery.  The summer school for credit recovery and grade promotion should be coded to 1410 (elementary) or 1420 (high school).

Over the years, there have been many questions raised as to how to code the online instructional computer programs such as i-Ready, Edgenuity, Accelerated Reader, etc. There has has been great inconsistency across the state as to how these programs were budgeted.  Many have used a 443 rental code and others have used 611 software code. The accounting manual finally provided the answer.   According to the new accounting manual, districts should be using object code 324.  For those who have used 611, this will make a difference in the procurement process, since a 300 code is a service as opposed to a 600 commodity.  Services have a larger threshold between one quote, two quotes, or sealed bids than commodities.  According to MDE, the 611 code is appropriate for those computer programs purchased that one maintains ownership of the program, i.e, Microsoft Office products.  If one has to renew from year to year to use the product, it is considered a virtual license.  These student instructional programs should also be coded to the 1100 function codes, since these are the student instructional support function codes.

It is well worth one’s time to review the new accounting manual.  I know many questions will arise, and I encourage discussion among Federal Program Directors and Consortiums in how unique positions and activities will be coded.  All ESSER applications will have to be updated to include the new function and object codes, and the FY22 Title application will need to use the new codes.  Happy budgeting!