Section 100 - Accounting and Financial Reporting

Title Section Sub-Type Summary
101.1 - Statewide Accounting Policy - Cash, Cash Equivalents, and Pooled Cash 0100 - Accounting and Financial Reporting Account Classification

Cash and cash equivalents consist of the pooled cash accounts of the State Treasurer and the following items managed by agencies and institutions of the State and its component units: 

•    Undeposited receipts 
•    Petty cash 
•    Checking accounts outside the State Treasurer 
•    Time deposits outside the State Treasurer, excluding certificates of deposit, which are considered investments. 

Cash and cash equivalents are reported on both the balance sheet and the statement of cash flows as cash and cash equivalents...

101.2 - Statewide Accounting Policy - Inventories 0100 - Accounting and Financial Reporting Account Classification

These inventories consist of general supplies and materials. Where inventories are distributed among several locations, the cumulative total value should be considered in determining materiality. The exception to the foregoing is postage. Because of its liquidity, postage must be recorded when it exceeds $100.00 in value. At year-end, inventories for governmental funds should be reported in the balance sheet as an asset...
 

101.3 - Statewide Accounting Policy - Prepaid Items 0100 - Accounting and Financial Reporting Account Classification

Prepaid items are payments for services that benefit more than one accounting period, such as insurance, rent, and subscriptions...

101.4 - Statewide Accounting Policy - Restricted Assets 0100 - Accounting and Financial Reporting Account Classification

For governmental funds of the State primary government, the accounting classification of restricted assets will be handled at a statewide level. For year-end reporting, OSC staff will prepare worksheet entries on the fund level working trial balances to reclassify unrestricted cash and cash equivalents, investments, and receivables to restricted accounts...

101.5 - Statewide Accounting Policy - Fund Balance Reporting 0100 - Accounting and Financial Reporting Account Classification

For classification of governmental fund balances, the State assumes an expenditure to be made from the most restrictive resource when more than one fund balance classification is available for use...

101.6 - Statewide Accounting Policy - Net Position 0100 - Accounting and Financial Reporting Account Classification

The following applies to the proprietary and government-wide financial statements of the State primary government and to component units. Net Position Restricted by Enabling Legislation (GASB COD 1800): For the State primary government, constraints placed on net position use by enabling legislation are not reported as net position restrictions since such constraints are not legally enforceable...

102.1 - Statewide Accounting Policy - Capitalization/Classification 0100 - Accounting and Financial Reporting Capital Assets

A capital asset is property, such as land, land improvements, easements, buildings, equipment, works of art and historical treasures, and infrastructure, with a cost equal to or greater than $5,000 and a useful life of two or more years. Capital assets are acquired for use in normal operations and are not for resale. These assets may be subject to depreciation...

102.2 - Statewide Accounting Policy - Additions/Renovations/Improvements 0100 - Accounting and Financial Reporting Capital Assets

Additions are considered separate assets and should be capitalized if the cost equals or exceeds the $5,000 capitalization threshold. An addition increases the physical size or operating capabilities of an asset through expansion or extension...

102.3 - Statewide Accounting Policy - Maintenance 0100 - Accounting and Financial Reporting Capital Assets

Maintenance expenses are incurred to keep assets in normal operating condition and to help maintain the original use of the asset. Maintenance expenses do not extend the life of the asset beyond the expected useful life at acquisition or increase the future service potential of the asset. Maintenance costs are incurred to keep the asset operational throughout its useful life...

102.4 - Statewide Accounting Policy - Libraries 0100 - Accounting and Financial Reporting Capital Assets

A library is a repository for literary and artistic materials such as books, e-books, periodicals, newspapers, pamphlets, videos, etc. kept for reading or reference...

102.5 - Statewide Accounting Policy - Depreciation 0100 - Accounting and Financial Reporting Capital Assets

The straight-line and units of output methods of depreciation, with an assumed salvage value of zero, are the recommended methods of depreciation. It is also recommended that depreciation for partial periods be computed using either the half-year convention or on the basis of the nearest full month...

102.6 - Statewide Accounting Policy - Fixed Asset Grants 0100 - Accounting and Financial Reporting Capital Assets

When the State does not hold title to property acquired with federal funds, the property should not be capitalized. (Possession does not equal ownership). The property, however, can be inventoried for tracking purposes...

102.7 - Statewide Accounting Policy - Land 0100 - Accounting and Financial Reporting Capital Assets

Land is the real estate property held by the State. It can be purchased or donated. Since land is considered not to have a limited useful life and its salvage value is unlikely to be less than its acquisition cost, land is not depreciated...

102.8 - Statewide Accounting Policy - Buildings 0100 - Accounting and Financial Reporting Capital Assets

Buildings are structures that are permanent in nature and have an asset life of two or more years. They are subject to depreciation.

Buildings are valued at the purchase price or construction cost. Cost should include all charges necessary to put the building or structure in its intended state of operation (i.e. professional fees for brokers, attorneys, architects, appraisers, financial advisors, interest during the period of construction through June 30, 2019, etc.)...

102.9 - Statewide Accounting Policy - Infrastructure 0100 - Accounting and Financial Reporting Capital Assets

Infrastructure assets are long-lived capital assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets...

102.10 - Statewide Accounting Policy - Intangible Assets 0100 - Accounting and Financial Reporting Capital Assets

Intangible assets of State agencies and component units should be capitalized according to the following thresholds: 

$1,000,000 – Internally generated computer software (application development costs only) 
$100,000 – All other intangible assets (including purchased or licensed computer software)...

102.11 - Statewide Accounting Policy - Collections 0100 - Accounting and Financial Reporting Capital Assets

Except as discussed below, works of art, historical treasures, and similar assets should be capitalized at their historical cost or acquisition value at the date of donation (assets donated prior to July 1, 2015 are recorded at their estimated fair value at the date of donation) whether they are held as individual items or in a collection...

102.12 - Statewide Accounting Policy - Transfers of Capital Assets 0100 - Accounting and Financial Reporting Capital Assets

Capital assets should not be revalued when transferred between funds and/or component units of the State’s financial reporting entity...

102.13 - Statewide Accounting Policy - Impairment of Capital Assets 0100 - Accounting and Financial Reporting Capital Assets

State Agencies 
State agencies should assess their capital assets at least annually to determine if they have any impaired capital assets with material carrying values...

Component Units
Component units should assess their capital assets at least annually to determine if they have any impaired capital assets with material carrying values...

102.14 - Statewide Accounting Policy - Internal Policy/Procedures Manual for Capital Assets 0100 - Accounting and Financial Reporting Capital Assets

Each agency is required to have an Internal Policy/Procedure Manual to detail the agency's capital asset requirements. This manual will not replace the requirements set forth in the statewide policies, but will individualize the statewide policies/procedures for each agency...

102.15 - Statewide Accounting Policy - Tagging 0100 - Accounting and Financial Reporting Capital Assets

Maintaining a positive identification of assets is the primary purpose of tagging. Tagging is important to: 
•    Provide an accurate method of identifying individual assets, 
•    Aid in the taking of physical inventory, 
•    Control the location of all physical assets, 
•    Aid in maintenance of fixed assets, and 
•    Provide a common ground of communication for both the accounting department and the assets' users...

102.16 - Statewide Accounting Policy - Physical Inventory 0100 - Accounting and Financial Reporting Capital Assets

A physical inventory of capital and inventoried fixed assets is taken to verify that assets recorded are physically located in an agency. Inventories are taken at least annually...

102.17 - Statewide Accounting Policy - Missing/Stolen Assets 0100 - Accounting and Financial Reporting Capital Assets

Missing Assets 
Management is responsible for implementing procedures for maintaining control over and the safeguarding of assets. Physical security measures over facilities and authorized personnel must be established and documented...

Stolen Assets 
According to G.S. 143-920, if any state property has been stolen, the employee discovering the theft must report the theft to his/her supervisor...

102.18 - Statewide Accounting Policy - Changing Location of Assets 0100 - Accounting and Financial Reporting Capital Assets

Prior to changing the assigned location of equipment within an agency, Part A of Form FAS-1 (or equivalent agency form) must be completed. The fixed asset number, description, current building and room number, and the reassigned building and room number must be included on this form. The form must be signed by the Division/Section Manager and transmitted to the Fixed Asset Officer...

102.19 - Statewide Accounting Policy - Separation of Duties 0100 - Accounting and Financial Reporting Capital Assets

Although the organization of each department is unique, the capital asset responsibilities should be distributed among several positions...

103.1 - Statewide Account Policy - Compensated Absences 0100 - Accounting and Financial Reporting Long-term Liabilities

The maximum amount of vacation leave that may be carried by an employee from one calendar year to another is 30 days. Any excess at calendar year-end, except for the provisions of Section 35.26 of Session Law 2018-145, is converted to sick leave and does not appear as a liability...

103.2 - Statewide Accounting Policy - Pollution Remediation Obligations 0100 - Accounting and Financial Reporting Long-term Liabilities

State agencies and component units should analyze their pollution remediation obligations at least annually and should recognize pollution remediation liabilities in their financial statements according to the following thresholds...

105.1 - Statewide Accounting Policy - Accounting Cycle 0100 - Accounting and Financial Reporting Statewide Financial Reporting

The State of North Carolina recognizes a fiscal year beginning July 1 and ending June 30. Budgetary reporting, budgetary control, and financial reporting in accordance with GAAP are based on this accounting cycle. 
Unless exempted by the State Controller, newly created or acquired component units of the State are required to have the same fiscal year as the State of North Carolina...

105.2 - Statewide Accounting Policy - Separately Issued Fund Financial Statements 0100 - Accounting and Financial Reporting Statewide Financial Reporting

The following applies to separately issued and audited GAAP-based fund (or departmental) financial statements issued for reporting units that are not legally separate: 
State agencies, universities, community colleges, and other component units may issue separate GAAP-based financial statements for one or more individual funds (or departments), which are intended to represent financial activities of the specific fund(s) (or departments) and not the State or component unit as a whole...

105.3 - Statewide Accounting Policy - Licensing Boards 0100 - Accounting and Financial Reporting Statewide Financial Reporting

The following standards should be followed in the preparation of separately issued financial statements for licensing boards of the State of North Carolina ("Boards"): 
•    The financial statements should be prepared in accordance with Generally Accepted Accounting Principles ("GAAP") as applicable to governments. The Governmental Accounting Standards Board ("GASB") establishes standards of financial accounting and reporting for state and local governmental entities...

105.4 - Statewide Accounting Policy - Submission of Audit Reports 0100 - Accounting and Financial Reporting Statewide Financial Reporting

This policy applies to reporting units included in the State’s Comprehensive Annual Financial Report (Annual Report) that have separately issued financial statements audited by a private CPA firm and which meet at least one of the following two criteria.

1)    The State Annual Report presents the entity in a separate column, or
2)    The State Auditor’s opinion letter in the State Annual Report indicates reliance on the entity’s independent audit report...

105.6 - Statewide Accounting Policy - Foundations 0100 - Accounting and Financial Reporting Statewide Financial Reporting

GASB Statement No. 39 impacts colleges and universities that have foundations and similarly affiliated organizations whose financial data is not currently blended in the institution's annual report...

105.7 - Statewide Accounting Policy - Leases 0100 - Accounting and Financial Reporting Statewide Financial Reporting

This policy establishes the capitalization threshold for lessees that report leases under GASB 87, Leases, and the Procedures section below discusses incremental borrowing rates for lessors and lessees when an interest rate is not explicitly stated in a leasing contract or when an implicit rate cannot be determined.

107.1 - Statewide Accounting Policy - Responsibility for the Uniform NCAS 0100 - Accounting and Financial Reporting Uniform North Carolina Accounting System

The Office of the State Controller (OSC) is responsible for the uniform NCAS and related subsystems, which maintain timely, reliable, accurate, consistent, and complete accounting information on the State of North Carolina government entity. The uniform NCAS includes the financial policies, procedures, and computer software that affect all departments and agencies of the State...

107.2 - Statewide Accounting Policy - General Ledger Standards 0100 - Accounting and Financial Reporting Uniform North Carolina Accounting System

Each state agency is responsible for maintaining a complete general ledger and supporting subsystems for all funds and accounts for which it has responsibility...

107.3 - Statewide Accounting Policy - Fund Accounting 0100 - Accounting and Financial Reporting Uniform North Carolina Accounting System

OSC determines the GASB fund type based on information on the center request form and information provided by the agency...

107.4 - Statewide Accounting Policy - NCAS and CMCS Security 0100 - Accounting and Financial Reporting Uniform North Carolina Accounting System

The provisions set forth in this “General” section apply to all means of access to any information or application designated as a functionality or component of the North Carolina Accounting System (NCAS) or Cash Management Control System (CMCS), under the management and
operation of the Office of the State Controller (OSC) or any State agency assigned these responsibilities...