2014 DCEDChartofAccountsforMunicipal

(PA DCED, 2014) ⇒ PA DCED. (2014). “DCED Chart of Accounts for Municipalities, 5th edition.” In: Pennsylvania Department of Community and Economic Development (DCED) Library.

Subject Headings: Reference CoA, Pennsylvania CoA.

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Abstract

This publication contains the recommended Chart of Accounts to be used in the fiscal administration of Pennsylvania municipalities. For assistance in the implementation and operation of any system of accounting based on this Chart of Accounts, users should consult the Department of Community and Economic Development (DCED). The account numbers and descriptions of accounts used in the DCED form DCED-CLGS-30: Annual Audit and Financial Report, are based on this Chart of Accounts. These account numbers and descriptions also are used in the Department of Transportation (DOT) Form MS-903, Treasurer Account Book, Form MS-965, Actual Use Report of State Funds, and Form MS-991, County Liquid Fuels Tax Fund Report. Both DCED and the DOT encourage the use of accounting systems based on the Chart of Accounts presented in this publication.

I. Introduction

The Department of Community and Economic Development Chart of Accounts is a numerical system for classifying financial transactions. It is the heart of the accounting system because it provides the means by which all transactions are recorded. For small municipalities, the structure can be quite simple — for larger municipalities, more complex. The Chart of Accounts meets the needs of manual as well as computerized accounting systems.

It is necessary for the purpose of accountability and reporting requirements to group similar transactions by like accounts. The numbering system employed in this Chart of Accounts may require as many as seven or eight digits to correctly identify a given transaction. Each digit is an integral part of the total identification process. The following paragraphs explain the process for identifying funds, assets, liabilities and expenditures or expenses.

General Information

The basis for governmental accounting is determined by the timing of transactions as they relate to when revenues, expenditures, other financing sources / uses (and the related assets and liabilities) are recognized in the accounting system and reported in the financial statements.

The common basis of accounting methods include:

Cash Basis Accounting: Cash basis accounting provides for the recording of revenues when received in cash and the recording of expenditures when paid in cash.

While cash basis accounting may fulfill legal requirements, it does not facilitate accurate reporting of financial position and is considered inappropriate for reporting the financial position of any fund.

Modified Accrual Basis: Modified Accrual Basis accounting recognizes an economic transaction or event as revenue in the operating period when the revenues are both measurable and available to liquidate liabilities of the current period. Available means collectible in the current period or soon enough thereafter to be used to pay liabilities of the current period. Similarly, expenditures are generally recognized when an event or transaction is expected to draw on current available resources.
Accrual Basis Accounting: Accrual basis accounting records the financial effects of transactions and other events and circumstances that have cash consequences in the periods in which those transactions, events and circumstances occur, regardless of the timing of related cash flows.

Generally accepted accounting principles (GAAP) for governmental accounting and financial reporting established by the Governmental Accounting Standards Board (GASB) apply different basis for different types of funds as follows:

Funds: A Fund is the vehicle by which revenues, expenditures, other financing sources / uses (and the related assets and liabilities) are captured to maintain in a segregated manner as perscribed by regulations, restrictions or other limitations.
Governmental Funds: Governmental funds typically use modified accrual accounting. The General Fund, Special Revenue Funds (including the Highway Fund), Debt Service and Capital Projects Funds are Governmental Funds.
Proprietary Funds: Proprietary funds typically use full accrual accounting. Enterprise Funds and Internal Service Funds are Proprietary Funds.
Fiduciary Funds: Fiduciary funds typically are reported based on the type of fund. Expendable trust funds and agency funds use modified accrual accounting. Non-expendable trust funds and pension funds typically use full accrual accounting.

Funds

The first two digits in an account number identify the fund and are referred to as fund prefix numbers. In the example, the account number 01.405.20, the 01 indicates a general fund transaction. Other examples of fund prefix numbers are as follows:

02. Street Lighting Fund
06. Water Fund
08. Sewer Fund
30. Capital Reserve Fund
35. Highway Aid Fund
60. Police Pension Fund

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References

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	Author	volume	Date Value	title	type	journal	titleUrl	doi	note	year
2014 DCEDChartofAccountsforMunicipal	PA DCED			DCED Chart of Accounts for Municipalities