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Advisory Report 1999-4

July 8, 1999

Accounting and Reporting for Special Session Instruction

POSITION PAPER PREPARED BY THE NACUBO ACCOUNTING PRINCIPLES COUNCIL

The position paper that follows was approved in April 1999, by the NACUBO Accounting Principles Council. The paper represents preferred industry practice, and in the absence of any guidance from the Financial Accounting Standards Board (FASB), the Governmental Accounting Standards Board (GASB), or the American Institute of Certified Public Accountants (AICPA), this document should be followed by all higher education institutions.

Purpose: NACUBO has reviewed the need for the subcategory Special Session Instruction in NACUBO’s Financial Accounting and Reporting Manual for Higher Education (FARM) and found that current general industry practice does not warrant continuation of the subcategory.

Applicability: This position paper applies to all independent and public higher education institutions.

Scope: Categorizing expenditures in Special Session Instruction is often difficult and meaningless to separate, since the same academic units offer these courses. At issue is whether to maintain the category of Special Session Instruction in the FARM or eliminate it and allow these expenditures to be included in the General Academic Instruction category. Institutions, in their efforts to provide continuous educational activities to meet the needs of both traditional and nontraditional students, have adopted academic calendars that are fairly contiguous throughout the year. Special session and summer session courses have also become stable portions of an institution’s annual budget and revenue projections. Thus, it is becoming more meaningless to identify special session and summer school sessions as being separate from the full academic experience at an institution.

Significance: Eliminating the subcategory Special Session Instruction will eliminate the requirement to separately account for like instructional activities in two separate subcategories under the umbrella major category Educational and General, Instruction. The combining of the subcategory Special Session Instruction with the subcategory General Academic Instruction will still maintain appropriate accountability under the category of Instruction.

Effective Date: The requirements of this document are effective for all higher education institutions for fiscal years beginning after June 15, 1999, with earlier application recommended.

Summary

The following paragraphs will be included in a future revision of the FARM and may be used in the interim for accounting and reporting purposes:

The instruction category includes the following subcategories:

General Academic Instruction. This subcategory includes expenditures for formally organized and/or separately budgeted instructional activities that are carried out during the academic year (as defined by the institution), associated with academic offerings described by IPEDS instructional program categories 01 through 50, and offered for credit as part of a formal post-secondary education degree or certificate program. Open university, short courses, and home study activities falling within this classification and offered for credit are included. However, this subcategory does not include instructional offerings that are part of programs leading toward degrees or certificates at levels below the higher educational level, such as adult basic education.

Vocational/Technical Instruction. This subcategory includes expenditures for formally organized and/or separately budgeted instructional activities that are carried out during the academic year (as defined by the institution), usually associated with IPEDS instructional program categories identified in Appendix C of the National Center for Education Statistics (NCES) publication, A Classification of Instructional Programs, and offered for credit as part of a formal post-secondary education degree or certificate program. Open university, short courses, and home study falling within this classification and offered for credit are included. However, this subcategory does not include instructional offerings that are part of programs leading toward degrees or certificates at levels below the higher education level, such as adult basic education.

Special Session Instruction. This subcategory includes expenditure for formally organized and/or separately budgeted instructional activities (offered either for credit or not for credit) that are carried out during a summer session, interim session, or other period not common with the institution’s regular term. This subcategory classifies expenditures made solely as a result of conducting a special session (such as faculty salaries associated with the special session). Special sessions do not include regular academic terms held during the summer. Expenditures for special sessions conducted over a fiscal year end should be reported totally within the fiscal year in which the program is predominately conducted. The revenues and expenditures for any special session should be reported in the same fiscal year. Reporting expenditures of special sessions is an allowable exception to reporting expenditures on an accrual basis.