The sooner you determine the impact of GASB 96 on your school district, the better you will be able to determine the accounting and reporting treatment for your federal funds.
As you know GASB Statement No. 96 Subscription Based Information Technology Agreements (SBITAs), is effective for fiscal year 2023. If you’ve been thinking about the treatment of these contracts and agreements with federal funds, you are not alone. We have been working with the American Institute of Certified Public Accountants’ (AICPA) Government Audit Quality Center committee members to gain more information as well as with the Texas Education Agency (TEA).
The good news is that for PEIMS purposes, the TEA will allow the 2xx-716514 (SBITA Principal) and 2xx-72-6526 (SBITA interest) for the various submissions.
Unfortunately, you will notice that federal grant applications continue to “gray out” the Debt Service budget line item, but please know that the TEA is working on a resolution.
Here are a few other reminders:
- For any new contracts and agreements entered into during fiscal year 2023, the contract and agreement will be treated as capital outlay using object code 6658 and offset with an other financing resource object code 791x. This is not the case for SBITAs that exists as of the beginning of fiscal year 2023.
- Prepare your budget for object code 6658 in the proper functional expenditure code (Funds 199 and 240 only).
- When you prepare your federal draw downs, only draw down the actual principal and interest paid on the SBITA versus drawing down the full amount of the SBITA originally recorded in object code 6658.
- All principal and interest payments will be recorded in object codes 6514 and 6526, respectively. Be sure to budget for functions 71 and 72for these SBITA debt service payments.
The sooner you determine the impact of this Standard on your school district, the better you will be able to determine the accounting and reporting treatment for your federal funds.