Georgia's Uniform Chart of Accounts for Local Governments in Georgia-Why It Matters

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Georgia law requires local governments to use the Uniform Chart of Accounts for Local Governments in Georgia. A uniform chart of accounts provides for consistency in recording transactions and comparability in the preparation of audited financial statements. The chart of accounts can also facilitate recording of financial information that will inform decision making.

The focus of governmental accounting and financial reporting is accountability. As we all know, most of the revenue that funds local government services and capital outlay is tax revenue. It is our responsibility to communicate the use of these taxes for service delivery to our citizens.

The Uniform Chart of Accounts provides the coding structure for local government transactions. In addition, it provides detailed descriptions for each segment of the chart to ensure that transactions are properly classified. Many of the account codes were created to ensure compliance with specific Georgia laws. For example, the chart requires the use of fund 320, Special Purpose Local Option Tax Fund (SPLOST), to account for proceeds from SPLOST. This tax is restricted to projects approved by taxpayers and requires separate accounting to satisfy compliance requirements. Often the chart includes Official Code of Georgia Annotated (OCGA) citations supporting the purpose for the detailed accounting.

The chart also includes function and activity codes that enable local governments to categorize transactions according to different service delivery areas. For example, one of the functional classifications in the chart is Public Safety (3000). Within this classification are activities within the function. In reviewing the activity codes under Public Safety, you find it includes Police, Sherriff, Corrections, Fire, Emergency Medical Services, Coroner, E-911 and Other Protection such as Animal Control. Accounting for expenditures within these activities provides increased accountability to citizens. If the government also establishes performance measures in these categories, it can begin to determine its efficiency and effectiveness in providing services.

The chart includes many detailed revenue codes. The authority to collect various revenues is established in Georgia law. These citations are included in the chart. Since budgets are required to be balanced in Georgia, it is essential a finance officer understands their revenue structure as the amount of expenditures budgeted is dependent on estimated revenue.

The object classifications in the chart are those specific line items to which expenditures are charged. For example, personal services and employee benefits uses the object code 51. The chart then provides subcategories of personal services expenditures such as regular employees, temporary employees, overtime and various employee benefits. The number of characters in the object classification allows for local governments to account at a more detailed level than what is required in the chart. My rule of thumb in establishing account codes is I want to be able to run a report to get financial information from my accounting system without getting out a highlighter and using a calculator! That is why it is important to know which financial reports are required or needed for decision making when setting up your chart. You may need information at a more detailed level than the uniform chart of accounts requires.

Often, your accounting system provides an option for including a project code. Project codes are useful when you have a special project such as implementation of a new software program in which you want to capture costs across function and object classifications.

You can get a copy of the chart of accounts on the Georgia Department of Community Affairs website . I encourage you to download the chart. Make sure all employees who code transactions into the accounting system have a copy of the chart. Often employees just have a report from the accounting system with the string of numbers used for account coding. Having the formal chart to review descriptions can lead to more accurate coding. Reliable financial reporting should be an objective of every local government. Accurate and reliable financial data should lead to better decision making.

This article was submitted by:
Tracy Arner, M.Ed., CPA, CPFO

Program Manager

Carl Vinson Institute of Government