Although the organization of each department is unique, the capital asset responsibilities should be distributed among several positions. This separation is necessary for adequate internal control. The following policies are recommended.
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. Section 35.26 of Session Law 2018-145 provides for the reduction of any vacation leave remaining on December 31 of each year in excess of 30 days shall be reduced by the number of Special Annual Leave Bonus days awarded in Session Law 2018-145 that were actually used by the employee during the year such that the calculation of vacation leave days that would convert to sick leave shall reflect a deduction of those days of special annual leave awarded that were used by the employee during the year. The number of Special Annual Leave days awarded in Section 35.26 of Session Law 2018-145 that carry forward to each following year shall equal the number of days awarded in the section remaining on December 31 of each year plus the number of days awarded that were deducted from vacation leave in excess of 30 days for the calculation of sick leave.
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 enclosed thresholds.
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.
The following applies to separately issued and audited GAAP-based fund (or departmental) financial statements issued for reporting units that are not legally separate.
The following standards should be followed in the preparation of separately issued financial statements for licensing boards of the State of North Carolina ("Boards").
This policy applies to reporting units included in the State’s Annual Comprehensive Financial Report (ACFR) that have separately issued financial statements audited by a private CPA firm and which meet at least one of the following enclosed criteria.
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. These organizations must be included as part of the institution's financial reporting entity (i.e., as discretely presented component units) if they are found to be "significant." The University of North Carolina General Administration and the Community College System Office have established a uniform threshold for identifying which organizations are "significant." Under this threshold, organizations whose assets or revenues are 5% or greater of the institution's assets or revenues will be considered "significant" to the institution.
This policy establishes the capitalization threshold for lessees that report leases and Subscription-Based IT Arrangements (SBITAs) under GASB Statement 87, Leases, and GASB Statement 96, SBITAs. The Procedures section below discusses incremental borrowing rates for lessors and lessees when an interest rate is not explicitly stated in a leasing or subscription contract or when an implicit rate cannot be determined.
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.
Each state agency is responsible for maintaining a complete general ledger and supporting subsystems for all funds and accounts for which it has responsibility. All financial transactions should be posted in detail in accordance with the prescribed statewide uniform chart of accounts and approved NCAS accounting policies and procedures. The ledgers should be posted, balanced, and reconciled at least monthly; however, it is strongly recommended that all agencies move toward more frequent updates with the ultimate goal of daily update cycles. On-line NCAS agencies will follow the prescribed procedures for the NCAS on-line general ledger.
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.
To ensure that payroll funds remain on deposit with the State Treasurer and available for investment until the payroll due date and that funds are on deposit to cover the payroll disbursement, under no circumstances shall a payroll warrant be issued to an employee that would allow the employee to cash the warrant prior to payday. This policy shall apply to all State payroll disbursements.
To minimize the daily outflow of General Fund cash, agencies and institutions that requisition funds from the General Fund of the State must submit a separate requisition for each check write. This policy applies to all funds requisitioned from the General Fund.
“A processing fee” is not to exceed thirty-five dollars ($35.00), may be charged and collected for checks on which payment has been refused by the payor bank because of insufficient funds or because the drawer did not have an account at that bank if at the time the consumer presented the check to the person.
State agencies are often required to deploy employees to areas affected by disaster whether caused by nature or event. State agencies must be prepared to provide employees with food, lodging and other applicable subsistence in situations where basic necessities are not available. The state agency shall use the state administered procurement card for purchases to the fullest extent possible. The procurement card is accepted similar to VISA and MasterCard nationwide. The procurement card transactions are reconciled monthly and provide sound internal controls over purchases. The procurement card is administered by the NC Department of Administration. All policies established shall be followed.
General Obligation (GO) bond proceeds must be invested by the State Treasurer and Special Indebtedness (SI) and Two Thirds General Obligation Bonds (Two Thirds GO) proceeds must be held by the Trustee until they are required for expenditure. In addition, funds derived from these three sources must be disbursed to contractors within 24 hours of receipt to prevent violation of federal arbitrage laws. To insure compliance with both of these Department of State Treasurer requirements, the Office of the State Controller has established the following procedures, which must be followed when requisitioning funds or preparing transfers.
In order to print NCAS checks, the agency user must have a NCID account that is part of the EADS domain. This NCID account is managed by Department of Information Technology (DIT). If an agency is not part of the EADS domain, OSC will create an OSC NCID for this user to be used only for the CSeries software. In addition, the user will be given a CSeries ID in order to access the check printing software. The CSeries ID is assigned by a CSeries administrator at OSC.
Each state agency/institution must comply with Federal information returns and Form W-2 reporting requirements. This includes developing procedures for accumulating calendar year data and preparing the appropriate information returns in the IRS acceptable media.
Agencies are to comply with the Internal Revenue Service (IRS) rules regarding compliance with tax information reporting, “B” notices, backup withholding and making timely deposits with the IRS. This policy outlines responsibilities for the central processor and individual agencies to comply with IRS requirements. The central processing agency, NC Office of the State Controller (OSC), will submit the electronic 1099-MISC file to the IRS and the NC Department of Revenue in a timely manner. Each agency is responsible for filing any amendments related to the original 1099 filing and issuing all related tax deposits. All other tax information reporting is the sole responsibility of each agency. Tax Identification Number (TIN) Matching is an Internal Revenue Service internet-based pre-filing e-service that allows authorized payers the opportunity to match 1099 payee information against IRS records prior to filing information returns. The TIN Matching process compares the information provided on the OSC Substitute W-9, IRS Form W-9 or IRS W-8 type forms (name and TIN) with IRS records. TIN Matching reduces the potential of backup withholding errors, penalty notices and the error rate in TIN validation. Utilizing this service improves the accuracy of the vendor master database. See IRS Publication 1281, Backup Withholding on Missing and Incorrect TIN(s).
State agencies must establish internal policies and procedures for the collection of accounts receivable consistent with statewide accounts receivable policies and procedures adopted by the State Controller and the statutory requirements.
Agencies and institutions should ensure that accounting and financial management systems are adequate to properly account for, record, and manage receivables, whether those systems are manual or automated.
Techniques for collection of accounts receivable shall include use of credit reporting bureaus, judicial remedies authorized by law, and administrative setoff by a reduction of an individual’s tax refund pursuant to the Setoff Debt Collection Act, Chapter 105A of the General Statutes, or a reduction of another payment, other than payroll, due from the State to a person to reduce or eliminate an accounts receivable that the person owes the State.