Ohio Community Schools Alert: Essential Changes to Accounting Systems and Fraud Training Requirements

If you’re managing a community school in Ohio, you’ve probably noticed the constant stream of regulatory updates that seem to arrive just when you’ve gotten comfortable with the last round of changes. Well, brace yourself, more are coming. But don’t worry, we’ve broken down what you really need to know about two major updates that will affect your school’s operations. 

What’s Changing in School Accounting Systems?

Remember that accounting system you’ve finally gotten used to? It’s changing again. The Auditor of State (AOS) is updating the Uniform School Accounting System (USAS) Manual soon, and honestly, it’s been a long time coming. 

Some schools have mentioned that they have been coding grant expenses three different ways over the past two years because the guidance wasn’t clear. Sound familiar? You’re not alone. 

The good news is the updated manual actually makes sense. They’re finally adding: 

• A glossary that explains the codes in plain English 
• A FAQ section (which means others have been just as confused as you) 
• New fund numbers for those grants Department of Education and Workforce (DEW) keeps rolling out 
• Removal of those fund codes for programs that ended years ago but somehow stayed in the system 

While you don’t have to use the State Software, Ohio Administrative Code 117-06-01 still requires your accounting software to follow the USAS manual for those financial reports you submit to the DEW. 

And yes, I’m referring to those dreaded “Period H submissions” – the financial reports showing how you’re coding receipts and expenses that you send to DEW throughout the year. If you’ve ever had one rejected because of coding issues, these updates should actually help. 

For schools working with management companies, there’s extra homework. Under Ohio Revised Code Sections 3314.024 and 3314.02(A)(8), your management company needs to use these new codes too. Check out AOS Technical Bulletin 2004-009 if you want the full details on how their expenses need to appear in your financial statements. 

Here’s the real talk:

The changes don’t kick in until July 2025, so you might be tempted to file this away for “future you” to deal with. But I’ve seen this play out several times with schools, and I can tell you what happens: June 2025 arrives, everyone scrambles, mistakes get made, and auditors have a field day. 

Instead, the schools that thrive are the ones mapping out their transition now. If you are already scheduling staff training sessions for early 2025, you are on the right track. You don’t want to spend months correcting errors that could have been prevented with proper preparation. 

About That New Fraud Training Requirement

Let’s switch gears to something equally exciting – mandatory fraud training! Starting with your 2025 audit, expect your auditor to check if all your employees completed the required fraud training on time. 

Why is this happening? A few bad apples. After some high-profile cases of financial mismanagement in public entities, Ohio Revised Code 117.103 was updated to require fraud reporting training. 

Here’s what it means for your school: 

Staff employed before September 1, 2024, should have already completed this training by November 29, 2024. Anyone hired after that gets a 30-day grace period from their start date. And then everyone needs a refresher every four years. 

Sounds simple enough, right? But here’s where schools get tripped up, especially with tracking completion and keeping those certificates. I recently spoke with an administrator whose school failed an audit point because they couldn’t produce training certificates for two substitute teachers. You don’t want to be that school. 

A simple spreadsheet with employee names, completion dates, and certificate locations could be incredibly helpful. Nothing fancy, but it could save you during an audit. 

What Real Schools Are Doing Now

Let me share what I’m seeing the more successful schools doing: 

1. They’re having the conversations now– Warning your staff about both changes at monthly meetings. Mention it every time so it’s not a surprise when you must act. 
2. They’re cleaning house – A few forward-thinking schools are using this as an opportunity to fix coding inconsistencies they’ve been living with for years. “We had a mess of special purpose funds,” one treasurer admitted. “This is our reason to finally straighten it out.” 
3. They’re budgeting for help – Several schools have set aside consulting hours in next year’s budget specifically for implementation support. Smart move. 
4. They’re comparing notes – I’ve noticed informal networks of school finance officers sharing approaches across districts. If you’re not part of one of these groups, you could be missing out. 
5. They’re testing systems – One particularly clever IT director is already creating a test environment to see how their software handles the new codes. 

Why Rea? Because We’ve Been There

Look, I could tell you about our credentials and experience with community schools (which are substantial), but here’s the real reason to consider working with us: we’ve helped several schools through transitions like these. 

We’ve seen what works, what doesn’t, and where the common pitfalls are. Our team includes people who understand the massive undertaking that this can be. We speak plain English, not accounting jargon. 

We have helped community schools overhaul their entire financial coding structure while simultaneously implementing a new compliance tracking system. They didn’t miss a beat. 

Don’t wait until auditors are breathing down your neck to get your systems in order. Reach out to us. The initial conversation is free, and you might be surprised at how painless we can make these transitions. Let Rea’s Government Accounting team show you how we can help make you successful and keep you on track.