§ 115C-440. Accounting system.
§ 115C‑440. Accounting system.
(a) System Required. Each local school administrative unitshall establish and maintain an accounting system designed to show in detailits assets, liabilities, equities, revenues, and expenditures. The system shallalso be designed to show appropriations and estimated revenues as establishedin the budget resolution as originally adopted and subsequently amended.
(b) Basis of Accounting. Local school administrative unitsshall use the modified accrual basis of accounting in recording transactions.
(c) Encumbrance Systems. Except as otherwise provided in thissubsection, no local school administrative unit is required to record or showencumbrances in its accounting system. The Local Government Commission, inconsultation with the State Board of Education, shall establish regulations,based on total membership of the local school administrative unit or some otherappropriate criterion, setting forth which units are required to maintain anaccounting system that records and shows the encumbrances outstanding againsteach category of expenditure appropriated in the budget resolution. Any otherlocal school administrative unit may record and show encumbrances in itsaccounting system.
(d) Commission Regulations. The Local Government Commission,in consultation with the State Board of Education, may prescribe rules andregulations having the force of law as to:
(1) Features of accounting systems to be maintained by localschool administrative units.
(2) Bases of accounting, including identifying in detail thecharacteristics of a modified accrual basis and identifying what revenues aresusceptible to accrual.
(3) Definitions of terms not clearly defined in this Article.
Theserules and regulations may be varied according to the size of the local schooladministrative unit, or according to any other criteria reasonably related tothe purpose or complexity of the financial operations involved. (1975, c. 437, s. 1; 1981, c. 423, s. 1.)