The State Department of Labor is working on its revenue budget for the year ending June 30, 2015. The State uses a system of account numbers to simplify its bookkeeping processes. The system uses four digits to the left and four digits to the right of the decimal point. The basic structure for an account would appear as: 0000.0000. The first digit in the number (on the extreme left) represents whether the account is describing an asset (resource owned by the state), a liability (obligation owed by the state), revenue, or expense. The code would be:
1. Asset
2. Liability
3. Revenue
4. Expense
The second and third digits signify the department. Several examples for the State are as follows:
01 Legislature
02 Governor’s Office
03 Judiciary
04 Agriculture
05 Transportation
12 Labor
The fourth digit represents the subdivisions within each department. For the Department of Labor, these are:
1 Economic Planning and Development
2 Economic Assistance and Security
3 Manpower and Employment Services
The first two digits to the right of the decimal point represent specific line- item revenue sources and expense codes:
01 Direct State Appropriations
02 Grants- in- Aid
11 Salaries and Wages
12 Materials and Supplies
13 Maintenance
The third and fourth digits to the right of the decimal point represent programs. For the Department of Labor, the programs are:
01 Administration and Support Services
02 Unemployment Insurance
03 State Disability Insurance
04 Vocational Rehabilitation Services
05 Workplace Standards
06 Employment Services
For example, account 3122.0104 represents revenue for the Department of Labor intended for the Economic Assistance and Security subdivision of the department. The revenue comes directly from state appropriations and is intended for use in the Vocational Rehabilitation Services program. This can be seen as follows:
3122.0104 The 3 in the first digit on the far left indicates that this is a revenue account.
3122.0104 The 12 in the next two digits indicates that the account is related to the Department of Labor.
3122.0104 The 2 in the next digit indicates that the account is related to the Economic Assistance and Security subdivision of the department.
3122.0104 The 01 in the first two digits to the right of the decimal point indicates that the source of the revenue is direct state appropriations.
3122.0104 Finally, the 04 in the last two digits indicates that this money is earmarked for the Vocational Rehabilitation Services program. Using this account code system and the information in Exhibit, prepare the following budget reports for the year ending June 30, 2015:
a. Prepare a line- item revenue budget for the Department of Labor. Note that the only two line- items are Direct State Appropriations and Grants-in-Aid.
b. Prepare a responsibility center revenue bud-get for the Department of Labor showing just the three main subdivision totals without line-item information.
c. Prepare a responsibility center revenue bud-get for the Department of Labor showing the three main subdivisions and line- items.
d. Prepare a functional revenue budget with line-item information for the Department of Labor. Treat each of the programs as a separate function of the Department.