School District Bonds – FAQ & Reporting Guide

What are Bonds?

What forms and schedules are involved with Bonds?

What lines are Bonds reported on?

What are Bond Edits and why do they matter?

How should Normal Bond Activity (Issuance and Payments) be reported?

What is the difference between Advance and Current Refunding?

How should Advance Refunding of Bonds be reported?

How should Current Refunding of Bonds be reported?

How do Bonds connect to the Financial Statements?

What are Bonds?


A bond is a long-term debt instrument issued by a school district to finance large capital expenditures, typically repaid over many years with interest.

Main Types of Bonds
  • Term Bonds: Entire principal due at maturity
  • Serial Bonds: Principal paid in installments
  • Statutory Bonds: Principal paid in installments

Common Uses:
  • School building construction or renovation
  • Purchasing school buses or major equipment
  • Major non-aidable capital projects
  • Refinancing or refunding prior debt (Advance or Current Refunding

Governed By
  • NYS Local Finance Law
  • Office of the State Comptroller (OSC)
  • Governmental Accounting Standards Board (GASB) Standards

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What forms and schedules are involved with Bonds?


  • SS-1: Primary schedule for tracking bond activity
  • SS-2: Non-current liabilities—used to verify year-end balances
  • Schedule A3: Records bond proceeds in General Fund
  • Schedule A4c: Records bond principal and interest paid in General Fund
  • Schedule F2: Records bond principal and interest paid in Debt Service Fund
  • Schedule G2: Records bond proceeds in Capital Fund
  • Exhibits A & F: Records unpaid principal and interest on matured bonds

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What lines are Bonds reported on?


General Fund:
  • Exhibit A: Line 46 – Bond Interest and Matured Bonds Payable
  • Schedule A3
    • Line 85 – Premium on Obligation
    • Lines 125–127 – Proceeds of Long-Term Debt (Term, Serial, Statutory Bonds)
                    o Used when bonds are issued for non-capital purposes
  • Schedule A4c:
    • Lines 385–389 – Term Bonds Principal Paid
    • Lines 390–395 – Serial Bonds Principal Paid
    • Lines 396–401 – Statutory Bonds Principal Paid
    • Lines 418–422 – Term Bonds Interest Paid
    • Lines 423–428 – Serial Bonds Interest Paid
    • Lines 429–434 – Statutory Bonds Interest Paid

    Debt Service Fund:
  • Exhibit F
    •
    • Line 18 – Term Bonds Payable
    • Line 19 – Bond Interest and Matured Bonds Payable
  • Schedule F2 (Revenue):
    • Line 3 – Premium on Obligations
    • Line 7 – Proceeds of Advance Refunding Bonds
    • Line 7b – Proceeds of Current Refunding Bonds
  • Schedule F2 (Expenditures)
    • Line 9 – Fiscal Agent Fees
    • Lines 10–14 – Term Bonds Principal Paid
    • Lines 15–20a – Serial Bonds Principal Paid
    • Lines 21–26 – Statutory Bonds Principal Paid
    • Lines 43–47 – Term Bonds Interest Paid
    • Lines 48–53a – Serial Bonds Interest Paid
    • Lines 54–59 – Statutory Bonds Interest Paid
    • Line 78 – Payment to Escrow Agent (Advance Refunding)

    Capital Fund:

  • Schedule G2
    • Line 5 – Premium on Obligations (totaled from each section below on Schedule G2, e.g., line 30)
    • Lines 13–15 – Proceeds of Long-Term Debt (Term, Serial, Statutory Installment Bonds. Totaled from sections below, e.g., lines 36–38)

    SS-1 (Schedule of Indebtedness):

  • Bond Section (Lines 50–209) includes:
    • Issue Date
    • Interest Rate
    • Beginning/Ending Balances
    • Prior Year Adjustments
    • Amount Issued
    • Principal and Interest Paid
  • Refunding Questions
    • Located directly before Line 50
    • District must answer whether Advance or Current Refunding occurred during the year. (Please see Question 6 below for a description of Advance vs Current Refunding)

    SS-2 (Statement of Non-Current Governmental Liabilities):

  • Line 1 – Term Bonds Payable
  • Line 4 – Bonds Payable

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What does the system check for bond reporting (Bond Edits) and why are they important?


Edit 90 – Negative End-of-Year Balances Check
  • Purpose: Ensures fiscal accuracy and data integrity
  • What it Does: Flags any bond (or other item) that has a negative “Outstanding at Year-End” balance on SS-1
  • Why it Matters: Bonds can’t have negative outstanding amounts—likely indicates a data entry or reconciliation error

Edit 99 – Missing Bond Details

  • Purpose: Validates completeness of critical bond data
  • What it Does: Confirms all bonds on SS-1 include both Issue Date and Interest Rate
  • Why it Matters: Important for calculating interest and verifying bond terms

Edit 108 – Advance Refunding Disclosure

  • Purpose: Ensures refunding activity is declared
  • What it Does: Verifies the district answered “Yes” or “No” to the Advance Refunding question on SS-1
  • Why it Matters: Required to trigger additional checks and validations downstream

Edit 110 – Advance Refunding ≥ $1M or Explanation

  • Purpose: Validates significant financial activity is properly recorded
  • What it Does: If Advance Refunding occurred, checks whether Proceeds and Escrow Payments (Schedule F2) are ≥ $1,000,000, or that an explanation is provided
  • Why it Matters: Transparency and accuracy are essential for large financial transactions

Edit 110a – Any Refunding Declared

  • Purpose: Broadens the refunding check to include Current Refunding
  • What it Does: Requires an answer to whether any Advance or Current Refunding occurred on SS-1
  • Why it Matters: Necessary to trigger the proper edits for either refunding type

Edit 110b – Refunding Proceeds Must Be Entered

  • Purpose: Ensures refunding events are financially reported
  • What it Does: If Advance or Current Refunding occurred, Schedule F2 must show the related Proceeds
  • Why it Matters: Prevents gaps in bond activity and ensures refunding is not omitted

Edit 116 – Beginning vs. Ending Balances Check

  • Purpose: Maintains consistency year over year
  • What it Does: Compares the Beginning Balance of this year to last year’s Ending Balance on SS-1
  • Why it Matters: Discrepancies may indicate data issues

Edit 117 – Bonds Issued vs. Proceeds on Schedules

  • Purpose: Confirms reporting of bond revenues is complete
  • What it Does: Matches bonds issued on SS-1 to proceeds recorded on Schedules A3, F2, and G2
  • Why it Matters: Ensures all bond issuances are correctly reported across relevant funds

Edit 119 – Bond Principal Payments Must Match

  • Purpose: Checks for consistency in payment reporting
  • What it Does: Compares principal paid on SS-1 to Schedules A4c (General) and F2 (Debt Service)
  • Why it Matters: Ensures all bond principal payments are correctly reported across relevant funds
  • Note: Advance refunding may trigger this edit — review link if necessary - Link: https://stateaid.nysed.gov/st3/refund.htm

Edit 120 – Bond Interest Payments Must Match

  • Purpose: Ensures accurate interest expense tracking
  • What it Does: Compares interest paid on SS-1 to Schedules A4c (General) and F2 (Debt Service)
  • Why it Matters: Ensures all bond interest payments are correctly reported across relevant funds

Edit 121 – SS-1 vs. SS-2 Ending Balances

  • Purpose: Aligns debt balances between reporting statements
  • What it Does: Ensures the total bonds outstanding on SS-1 match amounts reported on SS-2
  • Why it Matters: Required for accurate representation of long-term liabilities

Edit 121a – Current Refunding: Actual Proceeds ≥ Principal Paid

  • Purpose: Ensures a Current Refunding is recorded correctly
  • What it Does: Confirms principal paid on Schedule F2 is equal to or greater than the actual proceeds from a Current Refunding
  • Why it Matters: Prevents underreporting or incomplete refunding disclosure

Edit 121b – Current Refunding: Projected Proceeds ≥ Principal Paid

  • Purpose: Same as 121a, using projected instead of actual proceeds
  • What it Does: Confirms projected principal paid on Schedule F2 is equal to or greater than the projected proceeds from a Current Refunding
  • Why it Matters: Prevents underreporting or incomplete refunding disclosure

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How should normal bond activity (issuance and payments) be reported?


Scenario:

The district issued new bonds and/or made principal and interest payments during the fiscal year — a standard bond cycle.
Step-by-Step Reporting Instructions:

Step 1: Record the New Bond(s) on SS-1

  • Use lines 50–202, one section per bond
    • Include: Issue Date, Interest Rate, Amount Issued, Principal & Interest Paid (if any)
  • If there was no Advance or Current Refunding, select “No” for both questions above line 50

Step 2: Enter Proceeds in the Correct Fund

  • If in General Fund → Schedule A3, lines 125–127
  • If in Capital Fund → Schedule G2, lines 13–15 (summation of sections on lower part of schedule)
  • Ensure the Schedule G2 amount is in the correct section: Buses, Non-Aidable Projects, etc.
  • Ensure SS-1 Line 206 = Cumulative total on Schedules A3 + G2
  • Record any premium on obligations as well:
    • General Fund → Schedule A3, line 85
    • Capital Fund → Schedule G2, line 5 (summation of lower sections)

Step 3: Record Principal Payments

  • General Fund → Schedule A4c, lines 385–401
  • Debt Service Fund → Schedule F2, lines 10–26
  • Ensure SS-1 Line 207 = Cumulative total on Schedules A4c + F2

Step 4: Record Interest Payments

  • General Fund → Schedule A4c, lines 418–434
  • Debt Service Fund → Schedule F2, lines 43–59
  • Ensure SS-1 Line 209 = Cumulative total on Schedules A4c + F2

Step 5: Verify Outstanding Ending Balances

  • SS-1 Line 208 must equal SS-2 Lines 1 + 4

Step 6: Edits

  • No edits related to bonds should be triggering, unless due to rounding

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What is the difference between Advance Refunding and Current Refunding of bonds?


Advance Refunding

  • Timing: More than 90 days in advance of the old bond(s) maturity date(s)
  • Tax Treatment: Interest income is not tax-exempt (if issued after Dec. 31, 2017)
  • Involves: An escrow account/agent

Current Refunding

  • Timing: Within 90 days of the old bond(s) maturity date(s)
  • Tax Treatment: Interest income is usually tax-exempt
  • Involves: Usually does not involve an escrow account/agent

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How should Advance Refunding of bonds be reported?


Scenario: Advance Refunding — District issued new bonds to pay off older ones early via escrow

Step 1: Schedule F2 – Record Advance Refunding Proceeds & Disbursements

  • Line 7 – New bond proceeds from the Advance Refunding
  • Line 3 – Premium on obligations (if applicable)
  • Line 78 – Payment to Escrow Agent
    • Do not enter the amount of the bond paid off in the Advance Refunding on any of the Debt Service lines (10–26)
  • Line 9 – Fiscal Agent Fees

Step 2: SS-1 – Declare Advance Refunding Occurred

  • Select "Yes" between lines 49h–50 for Advance Refunding
  • Answer for Current Refunding as well (likely "No")

Step 3: SS-1 – Report Paid-Off Bond(s)

  • For old bond(s) paid off via escrow, show Principal and Interest Paid
    • Enter between lines 50–202, based on which lines cover the respective bond(s)
  • Ensure the Outstanding Balance of the paid-off bond(s) at Year-End = $0

Step 4: SS-1 – Enter the New Bond

  • Use a blank section (lines 50–202)
  • Include: Issue Date, Interest Rate, Issued Amount
    • Issued amount should equal Proceeds on Line 7 of Schedule F2
  • If any Principal or Interest was paid on this new bond, record that too

Step 5: SS-1 – Record Remaining Bond Activity

  • Bonds not involved in refunding go to SS-1 normally
  • Total Bonds Issued (SS-1 Line 206) = Proceeds on F2 (line 7) + other proceeds on A3/G2 for other issuances
  • Total Bond Principal (SS-1 Line 207) = Principal paid off in Advance Refunding + principal on A4c/F2 for other issuances
  • Total Bond Interest (SS-1 Line 209) = Interest totals from A4c and F2

Step 6: Verify Ending Balances

  • SS-1 Line 208 must equal SS-2 Lines 1 + 4

Step 7: Edits (Expected)

  • This edit will trigger — expected behavior for an Advance Refunding
  • Confirm that the edit difference equals the principal paid off in the refunding
  • Add comment (example):
    "Advance Refunding conducted; $X amount was paid off in the refunding, which is equal to the difference showing in the edit."
  • No other edits related to bonds should be triggering, unless due to rounding

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How should Current Refunding of bonds be reported?


Scenario: Current Refunding — District paid off old bonds using new bond proceeds within 90 days

Step 1: Schedule F2 – Record Current Refunding Proceeds & Disbursements

  • Line 7b – New bond proceeds from the Current Refunding
  • Line 3 – Premium on obligations (if applicable)
  • Line 9 – Fiscal Agent Fees
  • Line 20a – Principal paid (refunded bond that was paid off)
  • Line 53a – Interest paid (if any)

Step 2: SS-1 – Declare Current Refunding Occurred

  • Set "Yes" between lines 49h–50 for Current Refunding
  • Answer for Advance Refunding as well (likely "No")

Step 3: SS-1 – Report Paid-Off Bond(s)

  • For old bond(s) paid off, show Principal and Interest Paid
    • Amounts should equal lines 20a and 53a, respectively, as reported on Schedule F2
  • Ensure the Outstanding Balance of the paid-off bond(s) at Year-End = $0

Step 4: SS-1 – Enter the New Bond

  • Use a blank section on SS-1 (lines 50–202)
  • Include: Issue Date, Interest Rate, Issued Amount
    • Issued amount should equal Proceeds on Line 7b of Schedule F2
  • If any Principal or Interest was paid on the new bond, record that too

Step 5: SS-1 – Record Remaining Bond Activity

  • Bonds not involved in refunding go to SS-1 normally
  • Total Bonds Issued (SS-1 Line 206) = proceeds on F2 + A3/G2 for other issuances
  • Total Bond Principal (SS-1 Line 207) = bond paid off in Current Refunding + A4c/F2 for other issuances
  • Total Bond Interest (SS-1 Line 209) = A4c/F2

Step 6: Verify Ending Balances

  • SS-1 Line 208 must equal SS-2 Lines 1 + 4

Step 7: Edits

  • No edits should trigger, unless due to rounding

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How do bonds connect to the financial statements (F/S)?


Statement of Net Position

  • Will show the amount of Bond Payable remaining.
  • This may be total across all funds, broken down into individual funds, or both.

Revenue/Expenditures

  • Bond proceeds will be shown under Revenues or Other Financing Sources.
  • Payments towards Bonds will be shown as Debt Service.
    • Should show both Principal and Interest.
    • This may include payments towards BANs as well.

Notes to the Financial Statements

  • The notes should include details about the individual bonds.
  • Usually, they will have:
    • Issue Dates
    • Interest Rates
    • Remaining Principal Balance
    • Total Interest Paid

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Last Updated: September 17, 2025