4.1 Accounting System Policy

East Central College will maintain a financial reporting system which is in conformance with the laws of the State of Missouri and the Uniform Financial Reporting Manual of the Missouri Department of Higher Education and generally accepted accounting principles.

Procedures: (Revised 8-25-2008)

4.1.1 East Central College will use a fund accounting system which is consistent with the Uniform Financial Reporting Manual of the Missouri Department of Higher Education.

4.1.2 The following fund types are established in order to provide a uniform financial reporting process, and these fund types are defined as follows:

General Fund – The General Fund will be used to account for revenues and expenditures for the academic and service programs of the College. The source of the funds will be local taxes, state aid and student tuition/fees and other general miscellaneous revenue. Expenditures in the fund will include the costs associated with supporting the educational program of the College or maintaining the physical structure and operation of the College.

Bond and Interest Fund – The Bond and Interest Fund is established to account for the payment of principle, interest, and related charges on any outstanding bond issue. Revenue for the fund is received by tax levy which has been authorized by the voters. Expenditures for the fund are restricted to the payment of the items noted above. Debt service for each bond issue must be accounted for separately, using a group of self-balancing accounts within the fund. Expenditures in the fund are restricted.

Auxiliary Enterprises Fund – The Auxiliary Enterprises Fund is established for the purpose of accounting for College services where fees are charged to students, staff or the general public, be it either a sale fee for a good purchased or a user fee for a service rendered. Each enterprise service should be accounted for separately using a self-balancing account within the fund.

Restricted Purpose Fund – The Restricted Purpose Fund is established to account for state or federal monies that have restrictions regarding their use. Each specific account in the restricted purpose fund must be accounted for separately using a self-balancing account. Accounts must be established to insure that the accounting and reporting requirements of the grantor are met. If the grantor provides a special accounting manual for audit purposes, it should be followed exactly.

Each account in the restricted purpose fund is self-balancing, and the account should balance to $0 at the termination of the activity. If it does not, the amount that the account is overspent is a liability against the general fund. If the account is under spent, the balance must be returned to the grantor.

Trust and Agency Fund – The Trust and Agency Fund is established and used to receive and hold funds when the College serves as a custodian or fiscal agent for another body. The College has an agency rather than a beneficial interest in these monies; the College does not necessarily have control or direction over the use and expenditures of the monies, with the exception that the College uses its financial capability and accounting procedures to insure the integrity of the accounts. Each agency’s money should be accounted for by a self-balancing account. These accounts will balance to $0 at the termination of the activity. Monies generated by College clubs that are continuously inactive for three semesters or College athletic activities that are suspended by the Board of Trustees will be returned to the student government fund for use and/or disbursement.

Faculty Development Fund – The Faculty Development Fund is established to provide funding to each full-time faculty member for purposes of professional development expenses. The specific annual allocation to each account is established as part of the annual budget. Balances in each account may not exceed the equivalent of two years of funding at the current annual allocation.

College Restricted Fund – The College Restricted Fund is established to account for College funds that have restrictions imposed by the institution regarding their use. Each specific account in the College restricted fund must be accounted for separately using a self-balancing account, and the account should balance to $0 at the termination of the activity. If it does not, the amount that the account is overspent is a liability against the general fund. If the account is under spent, the balance is returned to the general fund.

Building Construction Fund – This fund will be used to account for revenues and expenditures which are associated with building construction or the purchase of unmovable equipment. The source of monies for this fund will be the proceeds of bond sales, gifts, grants, or other funds restricted to such purposes by their origin or by statute. The expenditures in this fund will be for construction or purchase of unmovable equipment. The accounts in this fund will be self-balancing, and the expenditures will be restricted.

(Adopted 6-1-1987; Revised 8-25-2008)