Current through all regulations passed and filed through September 16, 2024
(A) All local public offices shall maintain
an accounting system and accounting records sufficient to enable the public
office to identify, assemble, analyze, classify, record and report its
transactions, maintain accountability for the related assets (and liabilities,
if generally accepted accounting principles apply), document compliance with
finance-related legal and contractual requirements, and prepare financial statements required by rule
117-2-03
of the Administrative Code.
(B) The
management of each local public office is responsible for the assertions
underlying the information in the public office's financial statements. The
accounting system should assure that the following assertions are achieved for
all transaction types and account balances applicable to the local public
office's operations, considering the basis of accounting applicable to it:
(1) Assertions about classes of transactions
and events, and related disclosures, for the
period under audit:
(a) Occurrence:
Transactions and events that have been recorded or
disclosed have occurred, and such transactions
and events
pertain to the
entity.
(b) Completeness: All
transactions and events that should have been recorded have been recorded, and all related disclosures that should have been included
in the financial statements have been included.
(c) Accuracy: Amounts and other data relating
to recorded transactions and events have been recorded appropriately, and related disclosures have been appropriately measured
and described.
(d) Cutoff:
Transactions and events have been recorded in the correct accounting
period.
(e) Classification:
Transactions and events have been recorded in the proper accounts.
(f)
Presentation:
Transactions and events are appropriately aggregated or disaggregated and
clearly described, and related disclosures are relevant and understandable in
the context of the requirements of the applicable financial reporting
framework, or as prescribed by the auditor of state.
(2) Assertions about account balances, and related disclosures, at the period end:
(a) Existence: Assets,
liabilities, and equity interests exist.
(b)
Completeness: All assets, liabilities, and equity
interests that should have been recorded have been recorded, and all related
disclosures that should have been included in the financial statements have
been included.
(c) Rights and
obligations: The entity holds or controls the rights to
assets, and liabilities are the obligation of the entity.
(d)
Accuracy,
valuation, and allocation: Assets, liabilities, and equity interests have been
included in the financial statements at appropriate amounts, and any resulting
valuation or allocation adjustments have been appropriately recorded, and
related disclosures have been appropriately measured and
described.
(e)
Classification:
Assets, liabilities, and equity interests have been recorded in the proper
accounts.
(f) Presentation
: Assets, liabilities, and equity interests are appropriately
aggregated or disaggregated and clearly described, and related disclosures are
relevant and understandable in the context of the requirements of the
applicable financial reporting framework.
(C) The following systems and
documents may be used to effectively maintain the accounting and budgetary
records of the local public office:
(1) All
local public offices should integrate the budgetary accounts, at the legal
level of control or lower, into the financial accounting system. This means
designing an accounting system to provide ongoing and timely information on
unrealized budgetary receipts and remaining uncommitted balances of
appropriations.
The legal level of control is the level (e.g., fund, program or
function, department, or object) at which spending in excess of budgeted
amounts would be a violation of law. This is established by the level at which
the legislative body appropriates. For all local public offices subject to the
provisions of Chapter 5705. of the Revised Code, except school districts and
public libraries, the minimum legal level of control is described in section
5705.38
of the Revised Code. For school districts, the minimum legal level of control
is prescribed in rule
117-6-02
of the Administrative Code. For public libraries, the minimum legal level of
control is prescribed in rule
117-8-02
of the Administrative Code. The legal level of control is a discretionary
decision to be made by the local public office's
legislative authority, unless otherwise prescribed by statute.
(2) Purchase orders should be used
to approve purchase commitments and to encumber funds against the applicable
appropriation account(s), as required by division (D) of section
5705.41
of the Revised Code. Purchase orders are not effective unless the fiscal
officer's certificate is attached. The certificate should be attached at the
time a commitment to purchase goods or services is made.
(3) Vouchers may be used as a written order
authorizing the drawing of a check or an electronic
fund transfer payment in payment of a lawful obligation of the public
office. Each voucher shall contain the date, purchase order number, the account
code, amount, approval, and all other required information. The local office
should also attach supporting documentation to the voucher, such as vendor
invoices.
(D) All local
public offices may maintain accounting records in a manual or computerized
format. The records used should be based on the nature of operations and
services the public office provides, and should consider the degree of
automation and other factors. Such records should include the following:
(1) Cash journal, which typically contains
the following information: the amount, date, receipt number, check
or electronic fund transfer number, account code,
purchase order number, and all other
information necessary to properly classify the transaction.
(2) Receipts ledger, which typically
assembles and classifies receipts into separate accounts for each type of
receipt of each fund the public office uses. The amount, date, name of the
payor, purpose, receipt number, and other information required for the
transactions can be recorded on this ledger.
(3) Appropriation ledger, which may assemble
and classify disbursements or expenditure/expenses into separate accounts for,
at a minimum, each account listed in the appropriation resolution. The amount,
fund, date, check or electronic fund transfer
number, purchase order number, encumbrance amount, unencumbered balance, amount
of disbursement, uncommitted balance of appropriations and any other
information required may be entered in the appropriate columns.
(4) In addition, all local public offices
should maintain or provide a report similar to the following accounting
records:
(a) Payroll records including:
(i) W-2s, W-4s, I-9s, and other withholding records and
authorizations.
(ii) Payroll
journal that records, assembles and classifies by pay period the name of
employee, the employee's identification number, hours worked, wage rates, pay
date, withholdings by type, net pay, and other compensation paid to an employee
(such as a termination payment), and the fund and account charged for the
payments.
(iii) Check register that
includes, in numerical sequence, the check or
electronic fund transfer number, payee, net amount, and the
date.
(iv) Information regarding
nonmonetary benefits such as car usage, employer
provided cell phones, life insurance, and health insurance.
(v) Information, by employee, regarding leave
balances and usage.
(b)
Utilities billing records including:
(i)
Master file of service address, account numbers, billing address, type of
services provided, and billing rates.
(ii) Accounts receivable ledger for each
service type, including for each customer account, the outstanding balance due
as of the end of each billing period (with an aging schedule for past due
amounts), current usage and billing amount, delinquent or late fees due,
payments received and noncash adjustments, each maintained by date and
amount.
(iii) Cash receipts
records, recording cash received and date received on each account. This
information should be used to post payments to individual accounts in the
accounts receivable ledger described above.
(c) Capital asset records including such
information as the original cost, acquisition date, voucher number, the asset
type (land, building, vehicle, etc.), asset description, location, and tag
number. Capital assets are tangible assets that normally do
not change form with use and should be distinguished from repair parts and
supply items.
(E) Each local public office should establish
a capitalization threshold so that, unless the local public office establishes
a capitalization threshold for any individual item of five thousand dollars or
more, at a minimum, eighty per cent of the local public office's
non-infrastructure assets are identified, classified, and recorded on the local
public office's financial records. Capitalization thresholds are best applied
to individual items rather than to groups of
similar items such as desks and tables, unless the effect of doing so
would be to eliminate a significant portion of total capital assets such as
books belonging to a library district.
