N.J. Admin. Code § 5:31-7.1

Current through Register Vol. 56, No. 23, December 2, 2024

Section 5:31-7.1 - Accounting and financial reporting systems

(a) The accounting system consists of the methods and records established to identify, assemble, analyze, classify, record, and report an entity's transactions and to maintain accountability for the related assets and liabilities.

(b) An effective accounting system shall include a double-entry accounting for all transactions resulting in a general ledger, which shall be required for all authorities and special districts.

(c) Any accounting system adopted pursuant to (a) and (b) above must make it possible to present fairly and with full disclosure the financial position and results of financial operations of the funds and account groups of the reporting entity, in conformity with generally accepted accounting principles (GAAP) as promulgated by the Governmental Accounting Standards Board (GASB), 401 Merritt 7, P.O. Box 5116, Norwalk, CT 06856-5116, incorporated herein by reference, as may be amended from time to time, and demonstrate compliance with finance-related legal and contractual provisions, including applicable security and financing agreements.

(d) GAAP as it applies to proprietary funds of state and local governments, specifically as it applies to enterprise funds shall be used to account for an authority's ongoing activities, similar to those found in the private sector, where the intent of the governing body is that the costs (expenses, including depreciation) of providing services to the general public on a continuing basis be financed or recovered primarily through user charges and/or where the governing body has decided that periodic determination of revenue earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes.

(e) The financial statements of authorities shall be prepared in accordance with GAAP applicable to enterprise funds. Accordingly, revenues and expenses shall be recognized on the accrual basis. Revenues shall be recognized in the accounting period in which they are earned and become measurable; expenses shall be recognized in the period incurred, if measurable.

(f) The financial statements of special districts shall be prepared in accordance with GAAP applicable to governmental funds of state and local governments. Accordingly, revenues and expenditures shall be recognized on the modified accrual basis. Revenues shall be recognized in the accounting period in which they become available and measurable. Expenditures shall be recognized in the accounting period in which the fund liability is incurred, if measurable, except for unmatured interest on general long-term debt, which shall be recognized when due.

N.J. Admin. Code § 5:31-7.1