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Business Services Guide

Categorical Funding

What Is Categorical Funding?

Categorical funding are allocations that are required to be spent in a particular way or for a designated program. Some of the most common categorical programs are listed in Appendix B of the Budget and Accounting Manual. Categorical funds are separately accounted for in the restricted sub-fund of the general fund.

Categorical funds are recorded as revenue only to the extent they have been earned, i.e. expenses have been incurred for the intended purpose of the program. Deferred revenues (a liability account) should be recorded for revenues which are collected in advance of when they are earned.

How Should Categorical Matching Contributions Be Recorded?

Matching contributions for categorical programs are unrestricted.

Which Account Codes Should Be Used For Budgeting or Recording Categorical Program Revenue?

General Categorical Programs

Account code 8620 is used for general categorical programs. This code is used to record the receipt of restricted state revenue allocated by the Chancellor's Office or other state agencies for which districts receive funds without filing an application or claim. While this filing is not necessary, expenditure reports may be required. Funds are distributed periodically in accordance with provisions of law or as scheduled by the applicable office. These funds are restricted for specific purposes and are recognized as revenue only when earned. Advances are recorded as deferred revenue until earned.

Some examples of general categorical programs are:

Reimbursable Categorical Programs

Account code 8650 is used for reimbursable categorical programs. This code is used to record amounts received or accrued from the apportionment process for which the district is required to submit an application or claim for reimbursement. These funds are restricted for specific purposes.

Contact Information

Please contact Barb Yesnosky for questions related to Categorical Programs. She can be reached at (925) 485-5231.