KENAI PENINSULA BOROUGH

CHART OF ACCOUNTS POLICY AND PROCEDURE

AUGUST 2006

PURPOSE OF POLICY:

The establishment of uniform policy and procedures in the preparation, maintenance and use of a Chart of Accounts of the Kenai Peninsula Borough.

LEGAL AUTHORITY:

Kenai Peninsula Borough Code of Ordinances Chapter 2.28 Finance Department, Chapter 5.04 Budget Procedure and Fiscal Year, Chapter 5.08 Financial Procedures.

RESPONSIBILITIES FOR CHART OF ACCOUNTS:

The Finance Department is responsible for developing, and maintenance of a Chart of Account (Chart).

The structure and content of the Chart will be determined by the Director of Finance.

The Finance Department will distribute the Chart of Accounts to Borough personnel as needed.

The Finance Department will hold training sessions, as needed, to instruct Borough personnel in the use and understanding of the Chart.

The Finance Department will review the format and content of the Chart periodically and revise the Chart as needed.

All changes made to the Chart require the approval of the Director of Finance.

STRUCTURE OF CHART:

The structure and content of the Chart should aid personnel in the preparation of the budget and preparation of periodic financial reports and the Comprehensive Annual Financial Report.

In general the Chart should be arranged by fund, assets, liabilities, equity, revenues, expenditures or expenses, other financing sources, other financing uses and residual equity transfers. The Chart should contain account numbers arranged in logical order, account titles, and account descriptions. The Chart should be in sufficient detail to create financial data to demonstrate compliance with generally accepted accounting principles, any applicable federal, state and Borough statutes and ordinances.

Assets, liabilities, and equity accounts should be arranged in the order of liquidity as defined by generally accepted accounting principles.

Revenues and estimated revenues should be arranged by source, such as Intergovernmental – federal, Intergovernmental – state, Local, etc. and type, such as payment in lieu of taxes, Alaska Fish Tax, Taxes, etc. At the discretion of the Director of Finance revenues types, such as taxes may be segregated into real property tax, personal property tax, sales tax, etc.

Expenditures or expenses and appropriation should be arranged by major budget classification, (Personal Services, Supplies and Materials, Services, Debt Services and Capital Outlay, Contingency, and Transfers) and sub-object (Salaries, fringe benefits, e.g., FICA, PERS, Insurance, Debt Principal, Debt Interest) as determined by the Director of Finance.

Other financing sources and uses should be classified separately from revenues and expenditures or expenses. Other financing sources and uses should be classified by type, such as, proceeds from sale of bonds, proceeds from sale of fixed assets, operating transfers from other funds, operating transfers to other funds, etc.

Residual equity transfers should be classified separately from revenue, expenditures and other financing sources and uses. Residual equity transfers should be classified by type, such as residual equity transfers from other funds and residual equity transfers to other funds.

USE OF THE CHART:

The Chart will be used in developing the structure of the Borough’s annual budget, structure of the Borough’s financial accounting system, the structure of other financial reports and data and the structure of the Borough’s Comprehensive Annual Financial Report.