Make Accounting Codes Explainable

What is broken, and why?

“Other Items of Expense” does not identify one service, program or spending purpose. The warehouse report shows that this broad category includes account 5390950, SCO Inbound Interface Department Expenditures: transactions first processed outside FI$Cal by the State Controller’s Office and subsequently entered into FI$Cal. Other rows represent a mixture of goods, services and miscellaneous expenses.

The problem is an incomplete explanation at the category level. A readable label alone cannot distinguish an imported accounting entry from the underlying activity it records.

What Herb Morgan’s team has already done

The team documented the category in a reference card, connected it to official accounting guidance, and specified the fields needed to investigate it. The card directs researchers to separate Controller interface rows from the remaining expense accounts before interpreting the totals.

The same approach identifies “Information Technology” as an account family covering distinct activities such as software maintenance, data services, equipment leases and interagency billing. It is not a single technology project.

The concrete correction

1. Keep the original code and its official definition together. Preserve the source label so the explanation can be traced back to the record.
2. Separate different accounting mechanisms. Distinguish imported Controller entries, direct purchases and internal charges.
3. Join the missing context. Examine account description, department, fund, program, budget reference, vendor, document and positive or negative movement.
4. Publish a reusable explanation. Attach its sources, interpretation and remaining questions to the reference card.

These are documented research practices that can support clearer public financial reporting. Software can make the joins searchable; official definitions and accounting interpretation establish what the result means.

What remains to be established

A category-level explanation does not verify every transaction, service delivered or program outcome. Those questions require the corresponding transaction records and supporting evidence.