FISCAL MANAGEMENT MANUAL - Illinois Community College Board

Fiscal Management Manual ~ June 2009 Page 1
Section I
FUND ACCOUNTING
The Public Community College Act establishes several funds for community college transactions.
Each fund is composed of a series of self-balancing accounts. Moreover, community colleges are
required to publicly present their financial information using these funds.
A. PRINCIPLES OF FINANCE FOR INTERNAL FINANCIAL RECORDS
1) IF LEGAL AND SOUND ACCOUNTING PROVISIONS CONFLICT, AUDITED
FINANCIAL STATEMENTS MUST BE PREPARED FOLLOWING SOUND
ACCOUNTING PROVISIONS. HOWEVER, SUPPLEMENTAL SCHEDULES
USING THE LEGAL BASIS ALSO MUST BE PREPARED.
2) FUNDS MUST BE ESTABLISHED AS REQUIRED BY LAW.
A complete group of self-balancing accounts must be established for each fund. This
group should include accounts necessary to set forth the financial position and the results
of operations consistent with legal provisions. It also should meet the requirements of
sound financial administration. The budget document and all public financial reports
should be segregated using the funds or a subset of the funds defined in this manual.
3) ANNUAL INDEPENDENT AUDITS OF ALL FUNDS ARE REQUIRED BY LAW.
An audit of the financial statements, grants received from the ICCB, student enrollments,
and other data used as a basis for distributing state financial support must be submitted
to the ICCB each year. The independent licensed auditor is selected by and reports to
the local board of trustees.
4) MEASUREMENT FOCUS AND BASIS OF ACCOUNTING FOR REVENUES AND
EXPENDITURE
Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and
exchange like transactions should be recognized when the exchange takes place. Revenues,
expenses, gains, losses, assets, and liabilities resulting from non-exchange transactions
should be recognized in accordance with GASB statements 33 and 34.
5) THE ACCOUNTING SYSTEM SHOULD PROVIDE FOR A DOUBLE-ENTRY
BASIS OF RECORDING WITHIN A GROUP OF SELF-BALANCING FUNDS.
Financial transactions should be recorded in terms of debits and credits in a general
ledger from subsidiary books and/or records of original entry.