DAR File No. 41091
This rule was published in the January 1, 2017, issue (Vol. 2017, No. 1) of the Utah State Bulletin.
Budgeting, Accounting, and Auditing for Utah Local Education Agencies (LEAs)
Notice of Proposed Rule
DAR File No.: 41091
Filed: 12/14/2016 03:00:57 PM
Purpose of the rule or reason for the change:
Rule R277-425 is repealed and the provisions of Rule R277-425 are incorporated into amended Rule R277-113. (Editor's Note: The proposed amendment of Rule R277-113 is under filing No. 41073 in this issue, January 1, 2017, of the Bulletin.)
Summary of the rule or change:
Rule R277-425 specifies uniform budgeting, accounting, and auditing procedures for LEAs consistent with Generally Accepted Accounting Principles (GAAP) and Generally Accepted Auditing Standards (GAAS). These provisions are moved to Rule R277-113; therefore, the rule is being repealed in its entirety.
Statutory or constitutional authorization for this rule:
- Art X, Sec 3
- Section 53A-1-404
- Section 53A-1-401
- Subsection 53A-1-402(1)(e)(iv)
- Section 53A-1-405
Anticipated cost or savings to:
the state budget:
The provisions from this repealed rule are moved to Rule R277-113, which likely will not result in a cost or savings to the state budget.
The provisions from this repealed rule are moved to Rule R277-113, which likely will not result in a cost or savings to local government.
The provisions from this repealed rule are moved to Rule R277-113, which likely will not result in a cost or savings to small businesses.
persons other than small businesses, businesses, or local governmental entities:
The provisions from this repealed rule are moved to Rule R277-113, which likely will not result in a cost or savings to persons other than small businesses, businesses, or local government entities.
Compliance costs for affected persons:
The provisions from this repealed rule are moved to Rule R277-113, which likely will not result in any compliance costs for affected persons.
Comments by the department head on the fiscal impact the rule may have on businesses:
To the best of my knowledge, there should be no fiscal impact on businesses resulting from the amendments to this rule.
Sydnee Dickson, State Superintendent
The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:Education
250 E 500 S
SALT LAKE CITY, UT 84111-3272
Direct questions regarding this rule to:
- Angela Stallings at the above address, by phone at 801-538-7656, by FAX at 801-538-7768, or by Internet E-mail at firstname.lastname@example.org
Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:
This rule may become effective on:
Angela Stallings, Deputy Superintendent, Policy and Communication
R277. Education, Administration.
R277-425. Budgeting, Accounting, and Auditing for Utah Local
Education Agencies (LEAs).
A. "Accrual accounting" means a basis of
accounting that measures the performance of an entity by
recognizing economic events regardless of when cash transactions
occur. Economic events are recognized by matching revenues to
expenses at the time in which the transaction occurs rather than
when payment is made. B. "Board" means the Utah State Board of
Education. C. "FASB" means the Financial Accounting
Standards Board that has legal authority to establish financial
accounting and reporting standards (GAAP) for publicly held
companies and nonprofit organizations. D. "GAAP" means Generally Accepted Accounting
Principles, as defined in the Codification of Governmental
Accounting and Financial Reporting Standards, as published by the
Governmental Accounting Standards Board. E. "GAAS" means auditing standards established
by the American Institute of Certified Public Accountants,
generally referred to as Generally Accepted Auditing
Standards. F. "GASB" means the Governmental Accounting
Standards Board that is the source of generally accepted
accounting principles (GAAP) used by state and local governments
in the United States. G. "LEA" means local education agency which
includes school districts and charter schools. H. "Modified accrual accounting" means a basis
of accounting, commonly used by government agencies, that
recognizes revenues when they become available and measureable
and, recognizes expenditures when liabilities are
incurred. I. "Non-operating LEA" means an LEA that has
not received minimum school program funds or federal funds and is
not providing educational services during a fiscal year, such as
an LEA in a start-up year(s). J. "Operating LEA" means an LEA that has
received state minimum school program funds or federal funds and
is providing educational services during a fiscal year. K. "USOE" means the Utah State Office of
R277-425-2. Authority and Purpose.
A. This rule is authorized by Utah Constitution Article
X, Section 3 which vests general control and supervision over
public education in the Board, Section 53A-1-402(1)(e)(iv) which
allows the Board to adopt rules regarding financial, statistical,
and student accounting requirements, Section 53A-1-404 which
allows the Board to approve auditing standards for school boards,
Section 53A-1-405 which requires the Board to verify accounting
procedures of school boards for the purpose of determining the
allocation of Uniform School Funds, and Section 53A-1-401(3)
which allows the Board to adopt rules in accordance with its
responsibilities. B. The purpose of this rule is to specify uniform
budgeting, accounting, and auditing procedures for LEAs
consistent with Generally Accepted Accounting Principles (GAAP)
and Generally Accepted Auditing Standards (GAAS).
R277-425-3. LEA Audit Requirements.
A. An operating LEA shall cause an audit to be made of
its accounts by a competent, independent certified public
accountant. Utah Code Section 51-2a-201-1 requires audits for an
entity whose revenues or expenditures of all funds is $500,000 or
more. Section 51-2a-201-2 require an entity whose revenues or
expenditures of all funds less than $500,000 cause a financial
report to be made in a manner prescribed by the state auditor.
The state auditor provides for external parties to require audits
of their entities. B. A non-operating LEA shall cause a financial report to
be made consistent with Utah Code section 51-2a-201.
R277-425-4. Reporting Standards.
A. Each LEA's financial reporting shall be in
accordance with GAAP which include GAAS. B. LEA's financial reporting shall be provided in a
manner consistent with the basis of accounting as determined by
the entity's GAAP, consistent with either GASB or FASB. If
FASB standards are followed, the LEA shall provide reconciliation
between the accrual basis of accounting and modified accrual
basis of accounting. C. LEAs shall provide data and information consistent
with School Finance budgeting, accounting and auditing standards
for Utah LEAs provided online by the Utah State Office of
Education, October, 2013 and reviewed annually. The USOE School
Finance website contains applicable Utah statutes, applicable
Board rules, and uniform rules for: (1) budgeting; (2) financial accounting which includes a chart of
accounts for LEAs required under Section
53A-1-301(3)(d)(v); (3) student membership and attendance
accounting; (4) indirect costs and proration; (5) financial audits; (6) statistical audits; and (7) compliance and performance audits. D. Section 53A-19-103 allows LEAs to have an
undistributed reserve not to exceed five percent of the LEA
general fund budgeted expenditures. The purpose of the reserve is
to meet unexpected and unspecified contingencies.
KEY: education finance
Date of Enactment or Last Substantive Amendment: October 8,
Notice of Continuation: August 2, 2013
Authorizing, and Implemented or Interpreted Law:
53A-1-402(1)(e); 53A-1-404; 53A-1-405; 53A-1-401(3); Art X Sec
More information about a Notice of Proposed Rule is available online.
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For questions regarding the content or application of this rule, please contact Angela Stallings at the above address, by phone at 801-538-7656, by FAX at 801-538-7768, or by Internet E-mail at email@example.com. For questions about the rulemaking process, please contact the Office of Administrative Rules.