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District reclassifies some software subscriptions as capital outlay under new accounting rule
Summary
Staff told the committee that new government accounting standards require some multi-year software subscriptions to be treated like leases, moving costs into capital outlay and changing object-line appearances in the proposed 2026-27 budget.
Gary Bennett explained a technical accounting change that shifts certain subscription-based instructional technology arrangements into capital outlay to reflect their multi-year liability. "We have to treat them like a lease... we pay principal of interest on those, and we have to move them into the Capital Outlay," he said, noting the reclassification makes supplies appear to increase and capital outlay decrease on paper.
Bennett said the district will budget the purchases in supplies and materials and then journal those amounts to capital outlay when closing the books. He described the change as an accounting presentation decision that should improve internal budget management despite creating apparent anomalies on the published line items.
