The purpose of the special cost center is to keep the financial activity of SchoolNet separate from the money received under SchoolNet Plus. Fund 450 should be classified as a capital projects fund. Any asset received under the SchoolNet program should be recorded in the fixed asset inventory of the school district. The Office of Auditor of State recognizes that there will be lease agreements between the school districts and the Department of Education that maintain legal ownership of the assets with the State for 5-15 years. The accounting treatment for these assets at the school district level is based on treating these leases as capital leases.
Capital leases are leases that eventually transfer ownership of the leased assets to the lessee.
Assets acquired under a capital lease are recorded on the fixed asset records of the lessee as if they had been purchased. The assets associated with SchoolNet are addressed specifically in this Bulletin because the acquisition process is new for school districts and because these assets have separate reporting requirements to the Department of Education. This is a reminder that all fixed assets acquired under one of the programs mentioned in this Bulletin should be recorded on the fixed asset records of the school district. A portion of the SchoolNet funding will be used to provide technology training. In most cases, this training will be provided through the twelve regional professional development centers operated by the Department of Education.