The Audit Program Section II - Specific Compliance, Fund 30

Date Issued 6/06 SECTION II – SPECIFIC COMPLIANCE FUND 30 – CAPITAL PROJECTS FUND Bond and Note Authorizations Bonds and notes authorized by the voters (Type II) or the Board of School Estimate (Type I) are reported at the face amount as "Other Financing Sources" in the capital projects fund in the year of issuance/sale (GASB 37, par. 16). Debt issuance costs paid out of proceeds should be reported as expenditures (GASB 34, par. 87). Bond debt is reported as a liability on the district-wide Statement of Net Assets. Bond Anticipation Notes Funds received from the sale of bond anticipation notes (BANs) are not considered "Other Financing Sources" but are reported as a liability in the capital projects funds. Refer to Chapter 13 of the GAAP Technical Systems Manual for further guidance on BANs. General Borrowing Authority The following discussion of statutory authority for boards of education to borrow funds is not intended to be comprehensive, but to provide district personnel and auditors an overview of statutes and regulations relating to borrowing authority for districts. A district board of education should consult with the board solicitor for interpretation of the law given the particular district’s circumstances. Also refer to the Local Bond Law (N.J.S.A. 40A:2-1 et seq.) for further guidance when approvals by the Local Finance Board are required. District boards of education do not have statutory authority to borrow in ...