KRS 45.305: Accounting system -- Fund structure.

(1) The Finance and Administration Cabinet shall install a unified and integrated

system of accounts for the state which shall comply with generally accepted

accounting principles, and which shall be in addition to other accounts required by

this chapter, and which shall include:

(a) A set of budgetary control accounts for each fund, comprising an account with

the available cash of the fund, an account with the budget estimate of the

amount of money to be derived from each source of revenue and nonrevenue

receipts, an account with the total of the unallotted balances of appropriations,

an account with the total of the free balances of allotments, an account with

the total commitments under allotments, and an account with the estimated

cash surplus or deficit, so as to show at all times the status of the budget fund.

(b) A subsidiary appropriation ledger for each fund from which appropriations are

made, embracing an account with each appropriation, and designed to show

the budget unit to which the appropriation wa s made, the purpose of the

appropriation, the amount appropriated, the additions to the appropriation, the

allotments from the appropriation, the unallotted balance of the appropriation,

the commitments charged to allotments, and the free balances of the t otal

amount allotted.

(c) A set of general controlling proprietary and operating accounts for each fund,

so as to record the transactions to the fund in summary form and to show the

actual current assets, prepaid expenses, current liabilities, deferred cre dits to

income, reserves, actual income, actual expenditures, and the current surplus

or deficit.

(d) A uniform classification of the sources of revenue and nonrevenue receipts.

(e) Standard classifications of the expenditures of the budget units.

(f) A standard classification of the budget units.

(g) Such other accounts, records, and devices as the Finance and Administration

Cabinet deems necessary for the production of needed information respecting

financial condition, financial operations and costs.

(2) The accounts provided for in paragraphs (a), (b) and (c) of subsection (1) of this

section or summary records shall be maintained by the Finance and Administration

Cabinet.

(3) The Finance and Administration Cabinet shall keep controlling accounts with

receipts, payments, and state depositories. The cabinet shall obtain from the State

Treasurer the figures for the entries required to open the accounts, and thereafter it

shall obtain the information required for the keeping of the accounts from deposits,

lists of warrants drawn under appropriations, and vouchers requesting transfers of

deposits among state depositories.

(4) The accounting system prescribed and installed by the Finance and Administration

Cabinet shall provide for the settlement of transactions between budget units by

making debit and credit entries on the books of the cabinet on the basis of adequate

expenditure vouchers, without the issuance of warrants.

(5) The accounting system prescribed and installed by the Finance and Administration

Cabinet shall include the following fund classifications:

(a) Governmental fund: This classification shall include those funds through

which most governmental functions typically are financed including, but not

limited to, the general fund, the road fund, bond debt related fund, federal

fund, agency receipts funds, and the capital construction fund.

(b) Proprietary fund: This classification shall account for governmental activities

which are similar to those activities found in the private sector. Activities

which provide services to other governmental units and activities which

provide services principally to the private sector are included.

(c) Fiduciary fund: This classification shall account for assets held by a

governmental unit in a trustee capacity or as an agent for individuals, private

organizations, other governmental units, or other funds. These include

expendable trust funds, nonexpenda ble trust funds, pension trust funds and

agency funds.

(d) Loan fund: This classification shall account for funds advanced or to be

advanced to other governments, other governmental agencies, or private

organizations or individuals.

(6) Account groups. In order to establish accounting control and accountability for

general fixed assets and the unmatured principal of general long -term debt, a

general fixed assets account group and a general long -term debt account group may

be established.