New Jersey Administrative Code › Title 6A - EDUCATION › Chapter 23A - FISCAL ACCOUNTABILITY, EFFICIENCY AND BUDGETING PROCEDURES › Subchapter 18 - TUITION FOR PRIVATE SCHOOLS FOR STUDENTS WITH DISABILITIES › Section 6A:23A-18.5 - Bookkeeping and accounting

Current through Register Vol. 56, No. 14, July 15, 2024
(a) An APSSD shall
				maintain accounting and bookkeeping systems as prescribed in the Department's
				Financial Accounting for New Jersey Private Schools for Students with
				Disabilities in accordance with the following standards:
1. An APSSD shall maintain accounts in
				accordance with generally accepted accounting principles (GAAP) as established
				by the Financial Accounting Standards Board (FASB) and recognized as
				authoritative by the American Institute of Certified Public Accountants, except
				as already modified in this subchapter.
2. At a minimum, an APSSD shall use accrual
				accounting on a quarterly basis.
3.
				An APSSD shall capitalize fixed asset expenditures of $ 2,000 or more and
				depreciate such expenditures using the straight-line depreciation method and
				using a useful life consistent with current Federal tax law as defined in
				Internal Revenue Code Section 168 and class lives as defined in that section
				(also see IRS Publication 946), except for real property that may be
				depreciated using a useful life of 15 years or the term of the original
				mortgage, whichever is greater.
4.
				An APSSD shall:
i. Capitalize leasehold
				improvements made to an existing structure leased by the APSSD and depreciate
				the improvements using the straight-line method and a useful life equal to the
				lease's remaining term and any extension(s), but not less than five
				years;
ii. Depreciate any leasehold
				improvement(s) to which a related party(ies) is the lessor using the
				straight-line method and a useful life equal to the lease's remaining term and
				any extension(s), but not less than 10 years;
iii. Not depreciate a leasehold
				improvement(s) made to a structure for any month(s) the structure is not in
				service as an APSSD, or in excess of amounts determined under (a)4i or ii above
				for any fiscal year; and
iv. Not
				depreciate a leasehold improvement(s) made to a structure that does not
				directly benefit public school placement students being educated or that is in
				excess of amounts determined pursuant to (a)4i, ii, or iii above.
5. An APSSD shall maintain asset,
				liability, and net asset accounts, as well as expenditure and revenue
				accounts.
6. Nonprofit
				organizations shall maintain financial records on a fund basis, which requires
				restricted or unrestricted donations to be maintained in funds separate from
				the public school restricted fund. Costs incurred as a result of restricted or
				unrestricted donations shall be charged to the appropriate fund and not through
				the public school restricted fund. Profit-making organizations shall maintain
				financial records on a modified fund basis.
7. A chart of accounts issued by the
				Commissioner, or his or her designee, shall be maintained by each APSSD. A
				Uniform Minimum Chart of Accounts consistent with Financial Accounting for
				Local and State School Systems 2014, developed by the National Center for
				Education Statistics, incorporated herein by reference, as amended and
				supplemented as prepared, published, and distributed by the Commissioner, or
				his or her designee, for use in the accounting systems of all APSSDs shall be
				used for financial reporting to the Department. Effective July 1, 2017, the
				Department will not consider requests for approval to use an alternative chart
				of accounts. APSSDs that received approval prior to July 1, 2017, to use an
				alternative chart of accounts may continue to do so.
i. Effective July 1, 2018, the first $ 15,000
				of attorney's fees or other costs per litigation and per fiscal year of costs
				incurred by an APSSD shall be included within the administrative cost category
				limits identified in
				N.J.A.C.
				6A:23A-18.3(a)3. Costs for
				litigation above the first $ 15,000 per litigation and per fiscal year shall be
				outside the total cost category assignment as indicated in the Department's
				chart of accounts pursuant to (a)7 above.
ii. For purposes of (a)7i above, litigation
				means a suit brought by or against an APSSD for which a court of law or agency
				of the State or Federal government assigns a docket or other form of tracking
				number.
8. If multiple
				facilities for an APSSD have been approved, financial information in the
				bookkeeping records shall be segregated by facility. If the APSSD chooses to
				charge tuition rates by class type, financial information in the bookkeeping
				records shall be segregated by class type. Bookkeeping records shall include,
				but not be limited to:
i. Cash receipts
				journal;
ii. Cash disbursement
				journal;
iii. General
				ledger;
iv. Tuition
				ledger;
v. Payroll journal;
				and
vi. Fixed asset
				inventory.
9. An APSSD
				shall maintain documentation to verify all amounts recorded in the general
				ledger. Purchase orders shall be prepared in detail to document all payments
				for goods and services. Invoices or cash register receipts shall be attached to
				their related purchase orders to support all purchases of goods and services.
				Detailed vouchers signed by the payee shall be attached to their related
				purchase orders to support all payments for personal services, employee mileage
				reimbursements, or any payment for which invoices or cash register receipts are
				not used. All documentation shall be subject to audit by the Department and
				shall support expenses charged by the APSSD in its audited financial
				statements.
10. An APSSD shall
				prepare a payroll that is supported by an accurate employee time record in a
				format prescribed or approved by the Commissioner, or his or her designee,
				signed by the employee and supervisor, prepared in the time period in which the
				work was done and completed semi-monthly, at a minimum. An employee time record
				shall be prepared for all employees of the APSSD, including all administrative
				employees. Upon receipt of written approval from the Commissioner, or his or
				her designee, APSSDs may use an electronic time record system in lieu of the
				Commissioner-prescribed format. Approval shall continue unless and until an
				APSSD alters the system or engages the services of a new provider for the
				electronic time record system.
11.
				At least quarterly, an APSSD shall prepare a financial report in a format
				prescribed or approved by the Commissioner, or his or her designee, for the
				school-year program. The financial report shall be submitted to the school's
				governing body and its acceptance shall be documented in the governing body's
				meeting minutes.
12. An APSSD shall
				maintain effective internal control practices, including, but not limited to,
				the separation of duties such as the recording and authorizing of checks and
				purchase approvals.
13. An APSSD
				shall use the Commissioner-prescribed mandated tuition contract for each
				student received from a sending district board of education. The mandated
				tuition contract may be revised only by the APSSD or the sending district board
				of education with the Commissioner's prior written approval.
14. An APSSD that incurs contingent pay
				increases shall have an employee contract that contains the criteria by which
				the increase will be paid. Under no circumstances shall the APSSD employee's
				salary plus the contingent pay increase exceed the maximum allowable salary
				determined pursuant to
				N.J.A.C.
				6A:23A-18.3(o), (p), or (q).
				The criteria shall be submitted to the Commissioner, or his or her designee,
				for approval prior to implementation. The APSSD shall make payment of the
				contingent pay increase upon achievement of the contractual contingencies as
				set forth in the approved plan. The payment shall be based upon measurable
				criteria and shall not be at the management's discretion. The employee contract
				shall contain the following:
i. The date and
				signature of both the staff member and authorized APSSD
				representative;
ii. The ADE
				contingency the APSSD must achieve to generate the increase; and
iii. The specific dollar amount or percentage
				of original contracted salary to be paid pursuant to (a)14ii above.
15. An APSSD that incurs merit pay
				increases shall have adopted a formal policy that outlines the criteria of the
				merit pay plan(s). The APSSD employee's salary plus the merit pay shall not
				exceed the maximum allowable salary determined pursuant to
				N.J.A.C.
				6A:23A-18.3(o), (p), or (q).
				The plan(s) shall be submitted for approval to the Commissioner, or his or her
				designee, prior to implementation. The APSSD shall accrue the merit pay and any
				resultant employer payroll tax expense in the fiscal year in which the merit
				pay is awarded. Payment of such merit pay increase upon achievement of the
				criteria set forth in the approved plan shall occur no later than the following
				January 31. The payment shall not be at the management's discretion. The
				plan(s) shall include the following:
i.
				Eligibility for all employees;
ii.
				Basis by which the pay is earned;
iii. The amount of the awards by
				plan(s);
iv. The maximum number of
				awards to be given by plan(s) for each year; and
v. The date of board approval and date of
				initiation of the plan(s).
16. An imprest balance petty cash fund shall
				be maintained upon annual approval in the minutes by the APSSD's governing
				body. Replenishments and reimbursements shall be supported by documentation.
				Undocumented outflows from petty cash shall be classified as a non-allowable
				cost. The imprest fund balance shall not exceed $ 1,500 and individual
				disbursements made shall not exceed $ 150.00, except in the case of an emergent
				condition.
17. A student activity
				fund shall be approved by the APSSD's governing body and supported by
				documentation. Revenues derived from public school placement tuition shall be
				used to supplement, not supplant, student contributions.
18. Mileage records shall be maintained for
				each school-owned vehicle, leased vehicle, or vehicle contained in a related
				party transaction involving the purchase of transportation services in a format
				prescribed by the Commissioner, or his or her designee. The mileage records
				shall be maintained on a trip-by-trip basis and shall include any personal use
				including to/from work commutation. At the end of the fiscal year, the
				percentage determined by the total personal miles to total miles shall be
				applied to all costs associated with the vehicle(s) and the personal costs
				shall be excluded from the actual allowable costs. Vehicle costs may include,
				but not be limited to, the following: depreciation, lease costs, gas, oil,
				repairs and maintenance, and insurance.
19. Upon request from the Commissioner, or
				his or her designee:
i. A profit-making APSSD
				shall submit a copy of its Internal Revenue Service (IRS) tax return for any
				fiscal year requested; and
ii. A
				nonprofit APSSD shall submit a copy of IRS form 990 for any fiscal year
				requested.
20. An APSSD
				shall maintain all pertinent financial record(s) for a period of seven years
				after the November 1 due date of the annual audited financial statement, or
				until the Commissioner, or his or her designee, issues approval or adjustment
				to an independent-auditor-certified tuition rate.
21. A nonprofit entity that has chosen to
				cease operations as a nonprofit APSSD shall distribute its accumulated public
				school placement restricted working capital fund to each sending district board
				of education that had enrolled students during the APSSD's last five years of
				operation. Public school placement restricted working capital may be retained
				if an APSSD reconfigures its operations and continues to serve a majority of
				the same sending district boards of education from the last five years of
				operation.
i. The distribution shall be based
				on the ratio of each sending district board of education's total ADE in the
				APSSD for the last five years of operation to the APSSD's total ADE for the
				same period.
ii. Within 90 days of
				filing with the Department the required year-end audited financial statements
				in accordance with
				N.J.A.C.
				6A:23A-18.10, the APSSD shall submit to the
				Commissioner, or his or her designee, a listing of the total distribution of
				the public school placement restricted working capital fund, by sending
				district board of education.
22. An APSSD shall ensure school staff;
				consultants; subcontractors, including members of a management company; and
				anyone working with students hold the proper school certification, license, or
				bachelor's degree required pursuant to
				N.J.A.C.
				6A:23A-18.2 to provide the services being
				rendered.