9 NYCRR 1640-4.3

The obligation of the local agency to keep formal books of account with respect to a State-aided project becomes operative, technically speaking, only with the date of the contract for State aid. The local agency should, nevertheless, as a practical matter keep some formal records of expenditures made prior to that date, in order to support claims for their subsequent admission as eligible development costs and to facilitate the audit and review by the division. Such records may be in memorandum form, if the expenditures are being made on behalf of the local agency by some other agency, or they may be part of other accounting records of the local agency or they may be separate records, maintained on a cash basis, if the expenditures are being made by the local agency. Funds received by a local agency for indeterminate expenditures should be deposited in a bank account and disbursements made by check. All expenditures should be supported by vouchers or other evidence of authorization, in readily available form. Separate records, if maintained, should consist of, as a minimum, cash receipts and cash disbursements registers. If desired, a general ledger may also be set up. The use of the applicable general ledger accounts of the division's uniform system of accounts, in this event, is recommended, as follows:

This is a cash account recording the receipt and disbursement of funds for the indeterminate expenditures.

The indeterminate expenditures are charged to this account as made, to be held in suspense for audit, review, and approval by the division.

This account is credited with the funds received by the local agency for the payment of indeterminate expenditures, if such funds represent a loan to the local agency.

This account is credited with the funds received by the local agency for the payment of indeterminate expenditures, if such funds represent a donation, gift, appropriation, or advance which, it is not expected or intended, that the local agency will be required to repay.