Arkansas Administrative Code
Agency 005 - DEPARTMENT OF EDUCATION
Division 04 - Financial Services **
Rule 005.04.04-004 - ADE 190 - Rules Governing the Development of a Uniform Budget and Accounting System

1.01 These rules shall be known as the Arkansas Department of Education Rules Governing the Development of a Uniform Budget and Accounting System.

1.02 These rules are enacted pursuant to the Arkansas State Board of Education's authority under A.C.A. § 6-11-105, § 6-20-2203 and Act 61 of the Second Extraordinary Session of 2003.

2.01 The purpose of these rules is to set forth the process and procedures for establishing and implementing a uniform budget and accounting system for all public school districts and education service cooperatives.

3.01 Financial Accounting Handbook - The financial coding and chart of accounts as required by A.C.A. § 6-20-2203.

3.02 Arkansas Revisions - The Arkansas financial accounting system developed in compliance with the United States Department of Education, Office of Educational Research and Improvement's Financial Accounting: Classification and Standard Terminology for Local and State School Systems and as required by A.C.A. § 6-20-2203.

3.03 Federal Handbook IIR2 - the United States Department of Education, Office of Educational Research and Improvement's Financial Accounting: Classification and Standard Terminology for Local and State School Systems.

3.04 Handbook IIR2 - is the vernacular of the Arkansas Financial Handbook.

3.05 Valid Comparisons - comparisons deemed to be relevant to the subject material in substance and scope.

3.06 Uniform Budget and Accounting System - a financial chart of accounts consistent with Handbook IIR2 and required state and federal reporting for all public school districts, educational cooperatives, and open enrollment charter schools.

4.01 The Department shall establish a review committee in cooperation with representatives of the Arkansas Association of School Administrators, the Arkansas School Business Officials, the Arkansas Education Association, the education service cooperatives, and the Legislative Joint Auditing Committee.

4.02 The review Committee shall establish criteria for evaluating the categories and expenditures identified in Section 5.03 of this Rule.

4.03 The Review Committee shall make recommendations on a financial handbook for educational cooperatives that outlines appropriate format and codes for expenditures specific to educational cooperatives.

4.04 The Review Committee shall make recommendations on the development of an annual expenditures report to be submitted to the State Board of Education, the Governor, and Senate and House Interim Committee on Education concerning school and district expenditures as required by law.

4.05 By December 31, 2004 the Review Committee will submit to the State Board a timeline for implementation of a Uniform Budget and Accounting System.

4.06 The Review Committee shall ensure all recommendations comply with the requirements of this Rule.

5.01 The State Board of Education shall adopt the uniform budget and accounting system.

5.02 The definitions contained in the Federal Handbook llR2 shall be used for districts and cooperatives so that valid comparisons can be made.

5.03 The State Board of Education shall adopt by rule the "Arkansas Revisions" to the Federal Handbook llR2.

5.04 A financial handbook shall be developed by the State Board of Education for educational cooperatives that outlines appropriate format and codes for expenditures for educational cooperatives.

5.05 The Department of Education shall have the authority to analyze and inspect the financial records of any school, school district, or educational cooperative to verify expenditures.

5.06 By November 1 of each year, the Department shall submit a report to the State Board of Education, the Governor, and Senate and House Interim Committee on Education concerning school and district expenditures as required by law.

5.07 All rules and revisions shall be adopted and published prior to the start of the fiscal year for which they are applicable.