CHAPTER Rev 1700 FINANCIAL ACCOUNTING FOR CITIES AND TOWNS

Statutory Authority: RSA 21-J:3; 21-J:13; 21-J:17; 21-J:34, 21-J:35; 21-J:37; 33:14; 41:19

PART Rev 1701 DEFINITIONS

Rev 1701.01 “American Institute of Certified Public Accountants (AICPA)” means the New York based institute which issues authoritative accounting literature.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96; ss by #8179, eff 9-24-04

Rev 1701.02 “Basis of accounting” means when revenues, expenditures, expenses, and transfers, and the related assets and liabilities, are recognized in the accounts and reported in the financial statements.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96; ss by #8179, eff 9-24-04

Rev 1701.03 “Double entry” means an accounting system which requires that for every entry made to the debit side of an account, an entry for a corresponding amount is made to the credit side of another account.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96; ss by #8179, eff 9-24-04

Rev 1701.04 “Financial Accounting Standards Board (FASB)” means the Connecticut based board which issues authoritative pronouncements primarily for for-profit accounting.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96; ss by #8179, eff 9-24-04

Rev 1701.05 “Function” means group-related municipal programs aimed at accomplishing a major service or regulatory responsibility of the municipality.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96; ss by #8179, eff 9-24-04

Rev 1701.06 “Fund” means a fiscal and accounting entity with a self-balancing set of accounts which:

(a) Is used to record cash and other financial resources, with all related liabilities and residual equities or balances, and changes therein; and

(b) Is segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with applicable restrictions or limitations as provided by statute and related administrative rules.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96; ss by #8179, eff 9-24-04

Rev 1701.07 “Governmental Accounting Standards Board (GASB)” means the Connecticut based board which issues authoritative pronouncements primarily for governmental accounting.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96; ss by #8179, eff 9-24-04

Rev 1701.08 “Governing body” means governing body as defined in RSA 21:48.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96; ss by #8179, eff 9-24-04

Rev 1701.09 “Municipality” means a city, town, or unincorporated place.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96; ss by #8179, eff 9-24-04

Rev 1701.10 “Program” means activities, operations or organizational units directed to attaining specific purposes or objectives.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96; ss by #8179, eff 9-24-04

Rev 1701.11 “Uniform chart of accounts” means the account titles, descriptions and numbering system expressed in this chapter established by the department in accordance with RSA 21-J:13, IV.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96; ss by #8179, eff 9-24-04

PART Rev 1702 METHOD AND BASIS OF ACCOUNTING AND GENERALLY ACCEPTED

ACCOUNTING PRINCIPLES FOR MUNICIPALITIES

Rev 1702.01 Method of Accounting. Municipalities shall use a double entry system of bookkeeping as the method to record all financial transactions.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96; ss by #8179, eff 9-24-04

Rev 1702.02 Basis of Accounting. For purposes of this part, the following definitions shall apply:

(a) “Accrual” means the basis of accounting under which:

(1) Revenues are recognized in the accounting period in which they are earned and become measurable; and

(2) Expenses, rather than expenditures, are recognized in the period incurred, if measurable.

(b) “Modified accrual” means the basis of accounting under which:

(1) Revenues are recognized in the accounting period in which they become available and measurable; and

(2) Expenditures, rather than expenses, are recognized in the accounting period in which the fund liability is incurred, if measurable, except for unmatured interest on general long-term debt.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96; ss by #8179, eff 9-24-04

Rev 1702.03 Use of Accrual Basis.

(a) Municipalities shall use the accrual basis of accounting for:

(1) Proprietary funds;

(2) Non-expendable trust funds; and

(3) Pension funds.

(b) Under the accrual basis of accounting, transactions shall be classified by fund and for:

(1) Revenues by revenue source;

(2) Expense by function; and

(3) Balance sheet by balance sheet account.

(c) Municipalities shall, for purposes of filing Form MS-5, Annual City/Town Financial Report, use the modified accrual basis of accounting for all:

(1) Governmental funds;

(2) Expendable trust funds; and

(3) Fiduciary funds.

(d) Under the modified accrual basis of accounting, transactions shall be classified by fund and for:

(1) Revenue by revenue source;

(2) Expenditure by function; and

(3) Balance sheet by balance sheet account.

Source. #4940, eff 9-25-90; ss by #6126, eff 11-23-95; ss by #6335, eff 9-24-96; ss and moved by #8179, eff 9-24-04 (from Rev 1702.02)

Rev 1702.04 Hierarchy of Generally Accepted Accounting Principles for Municipalities. For general accounting in areas not addressed in this rule, municipalities shall follow, in descending priority sequence, the authoritative sources listed below:

(a) The first level shall include:

(1) GASB statements;

(2) GASB interpretations; or

(3) AICPA or FASB pronouncements made applicable by a GASB statement or GASB interpretation;

(b) The second level shall include:

(1) GASB technical bulletins;

(2) AICPA industry audit and accounting guides made applicable by the AICPA and accepted for use in governmental accounting by the GASB; or

(3) AICPA statements of position made applicable to auditing governmental entities by the AICPA and accepted for use in governmental accounting by the GASB;

(c) The third level shall include AICPA practice bulletins made applicable to governmental entities by the AICPA and accepted for use in governmental accounting by the GASB;

(d) The fourth level shall include:

(1) GASB implementation guides; or

(2) Prevalent accounting practices that are widely recognized by public accountants and certified public accountants, licensed under RSA 309-A who prepare state and local governmental financial reports consistent with generally accepted accounting principles; and

(e) Other sources of guidance shall include:

(1) GASB concepts statements; and

(2) FASB guidelines that are not authoritative for:

a. Governments;

b. Text books;

c. Professional publications; and

d. Professional organization position papers.

Source. #8179, eff 9-24-04 (from Rev 1702.03)

PART Rev 1703 CLASSIFICATION OF FUNDS AND ACCOUNT GROUPS

Rev 1703.01 Classification of Funds.

(a) Governmental funds shall consist of:

(1) The general fund, to account for all financial resources of the municipality except those required to be accounted for in another fund, provided that each municipality:

a. Maintain a general fund for the recording of financial transactions; and

b. Have only one general fund;

(2) Special revenue fund(s) to account for the proceeds of specific revenue sources, other than expendable trusts or major capital projects, that are legally restricted to expenditure for specified purposes; and

(3) Capital project fund(s) to account for financial resources used to acquire or construct capital facilities, other than those financed by proprietary funds and trust funds.

(b) Fiduciary funds shall account for assets held by a municipality:

(1) In a trustee capacity, such as, but not limited to:

a. Expendable trust funds, including trust funds established under RSA 31;

b. Capital reserve funds established under RSA 34 and RSA 35;

c. Nonexpendable trust funds established under RSA 31; and

d. Pension trust funds established under RSA 31, or

(2) In an agency relationship, such as agency fund(s) for:

a. Individuals;

b. Private organizations;

c. Other municipalities; or

d. Other funds.

(1) Enterprise fund(s) which may be used to account for operations:

a. That are financed and operated similar to private business enterprises where the intent of the governing body is that the expenses, including depreciation, of providing goods or services to the general public on a continuing basis are financed or recovered primarily through user charges; or

b. Where the governing body has decided that periodic determination of revenues earned, expenses incurred, and net income is appropriate for:

1. Capital maintenance;

2. Public policy;

3. Management control;

4. Accountability; or

5. Other public purposes; and

(2) Internal service fund(s) which may be used to account for the financing of goods or services provided on a cost reimbursement basis by one department or agency of a municipality to other:

a. Departments or agencies of the municipality; or

b. Municipalities.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96 (from Rev 1705); ss by #8179, eff 9-24-04

Rev 1703.02 RESERVED

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96 (from Rev 1705); rpld by #8179, eff 9-24-04

PART Rev 1704 CLASSIFICATION OF REVENUE SOURCES

Rev 1704.01 Source: Revenue From Taxes.

(a) Account 3110, property taxes, shall be for compulsory charges levied on the assessed valuation of real and personal property located within the municipality.

(b) Account 3120, land use change taxes, shall be for taxes assessed and levied on the full and true value of land pursuant to RSA 79-A and deposited in the general fund.

(c) Account 3121, land use change taxes, shall be for taxes assessed and levied on the full and true value of land pursuant to RSA 79-A and deposited in the conservation fund pursuant to RSA 36-A.

(d) Account 3180, resident taxes, shall be for taxes assessed and levied on inhabitants of the municipality.

(e) Account 3185, yield taxes, shall be for taxes assessed and levied on the stumpage value at the time of timber cutting.

(f) Account 3186, payments in lieu of taxes, shall be for payments:

(1) Made in place of property taxes on privately owned property; and

(2) From the general revenues of one government to another in place of taxes it would have had to pay, had its property or other tax base been subject to taxation by the recipient government on the same basis as privately owned property or other tax base.

(g) Account 3187, excavation tax, shall be for taxes assessed and levied on excavated earth pursuant to RSA 72-B.

(h) Account 3189, other taxes, shall be for taxes assessed and levied, not described in (a) through (g) above.

(i) Account 3190, interest and penalties on delinquent taxes, shall be for:

(1) Amounts assessed as penalties for the payment of taxes after their due date; and

(2) Interest charged on delinquent taxes from their due date to the date of actual payment.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96 (from Rev 1706); ss by #8179, eff 9-24-04

Rev 1704.02 Source: Revenue From Licenses, Permits and Fees.

(a) Account 3210, business licenses and permits, shall be for revenues from businesses and occupations required to be licensed before doing business within the municipality’s jurisdiction.

(b) Account 3220, motor vehicle permit fees, shall be for revenues from motor vehicle permit fees levied pursuant to RSA 261.

(d) Account 3290, other licenses, permits and fees, shall be for revenue from licenses, permits and fees not otherwise classified in (a) through (c) above.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96 (from Rev 1706); ss by #8179, eff 9-24-04

Rev 1704.03 Source: Revenue From the Federal Government.

(a) Account 3311, housing and urban renewal, shall be for intergovernmental revenues from the U.S. Department of Housing and Urban Development.

(b) Account 3312, environmental protection, shall be for intergovernmental revenues from the U.S. Environmental Protection Agency.

(c) Account 3319, other federal grants and reimbursements, shall be for intergovernmental revenues from other U.S. departments or agencies in the form of operating grants, entitlements and shared revenues, such as, but not limited to, funds from:

(1) The Federal Emergency Management Agency; and

(2) The Federal Drug Enforcement Administration.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96 (from Rev 1706); ss by #8179, eff 9-24-04

Rev 1704.04 Source: Revenue From the State of New Hampshire.

(a) Account 3351, shared revenue - block grant, shall be for intergovernmental revenue from the state of New Hampshire pursuant to RSA 31-A.

(b) Account 3352, meals and rooms tax distribution - block grant, shall be for intergovernmental revenue from the state of New Hampshire pursuant to RSA 78-A:26.

(c) Account 3353, highway block grant, shall be for intergovernmental revenues from the New Hampshire department of transportation.

(d) Account 3354, water pollution grants, shall be for intergovernmental revenues from the New Hampshire department of environmental services, water division.

(e) Account 3355, housing and community development, shall be for intergovernmental revenues from the New Hampshire office of energy and planning.

(f) Account 3356, state and federal forest land reimbursement, shall be for intergovernmental revenues from the state of New Hampshire for payments in lieu of property tax pursuant to RSA 219.

(g) Account 3357, flood control reimbursement, shall be for intergovernmental revenues from the state of New Hampshire pursuant to RSA 122.

(h) Account 3359, other state grants and reimbursements, shall be for intergovernmental revenues from other state of New Hampshire departments revenues not otherwise classified.

Source. #6335, eff 9-24-96 (from Rev 1706); ss by #8179, eff 9-24-04

Rev 1704.05 Source: Revenue From Other Governments.

(a) Account 3379, intergovernmental revenues - other, shall be for revenues from other local governments.

Source. #6335, eff 9-24-96 (from Rev 1706); ss by #8179, eff 9-24-04

Rev 1704.06 Source: Revenue From Charges For Services.

(a) Account 3401, income from departments, shall be for revenue from charges for services provided within the budgetary cycle, exclusive of revenues of proprietary funds.

(b) Account 3402, water supply system charges, shall be for revenue from services or water supplied from the municipal water system.

(d) Account 3404, garbage-refuse charges, shall be for revenue from services provided by the municipal waste management system.

(e) Account 3405, electric user charges, shall be for revenue from services provided by the municipal electric system.

(f) Account 3406, airport fees, shall be for revenues provided by the municipal airport or aviation center from services provided by the airport or aviation center.

(g) Account 3409, other charges, shall be for revenue from services provided by the municipality not classified in (a) through (f) above.

Source. #6335, eff 9-24-96 (from Rev 1706); ss by #8179, eff 9-24-04

Rev 1704.07 Source: Revenue from Miscellaneous Sources.

(a) Account 3500, special assessments, shall be for amounts levied against certain properties to defray all or part of the cost of specific capital improvements or services deemed to benefit primarily those properties.

(b) Account 3501, sale of municipal property, shall be for proceeds from:

(1) Sale(s) of property previously used to pursue municipal business; and

(2) Sale(s) of tax-deeded property.

(c) Account 3502, interest on investments, shall be for revenue received as compensation for the use of the municipality’s financial resources over a period of time.

(d) Account 3503, rents of property, shall be for revenue received as compensation for the use of the municipality’s assets.

(e) Account 3504, fines and forfeits, shall be for revenue received from fines and penalties imposed for conviction of:

(1) The commission of statutory offenses;

(2) Violation of:

a. State administrative rules;

b. Federal regulations;

c. Enforceable local ordinances; or

d. Any combination of a. through c.;

(3) Neglect of official duty; and

(4) Confiscating deposits held as performance guaranties.

(f) Account 3506, insurance dividends and reimbursements, shall be for:

(1) Monies returned from insurance premiums paid in a prior period; or

(2) Claims for which the expenditure was incurred in prior period.

(g) Account 3508, contributions and donations, shall be for revenue provided by private or public contributions.

(h) Account 3509, revenue from other miscellaneous sources not otherwise classified, shall be used to accumulate information for reporting purposes, regarding revenue from miscellaneous sources not classified in (a) through (g) above.

Source. #6335, eff 9-24-96 (from Rev 1706); ss by #8179, eff 9-24-04

Rev 1704.08 Source: Interfund Operating Transfers In.

(a) Account 3911 shall be for transfers from the general fund.

(b) Account 3912 shall be for transfers from special revenue funds.

(d) Account 3914 shall be for transfers from proprietary funds.

(e) Account 3915 shall be for transfers from capital reserve funds.

(f) Account 3916 shall be for transfers from trust and fiduciary funds.

(g) Account 3917 shall be for transfers from conservation funds.

Source. #6335, eff 9-24-96 (from Rev 1706); ss by #8179, eff 9-24-04

Rev 1704.09 Source: Other Financial Sources.

(a) Account 3934, proceeds from long-term notes and general obligation bonds, shall be for gross financial resources provided by long-term notes or the issuance of general obligation bonds.

(b) Account 3935, proceeds from all other bonds, shall be for gross financial resources provided by the issuance of all other long-term liabilities.

(c) Account 3939, other long-term financial sources, shall be for financial resources provided by sources not otherwise classified.

Source. #6335, eff 9-24-96 (from Rev 1706); ss by #8179, eff 9-24-04

PART Rev 1705 CLASSIFICATION OF EXPENDITURE AND EXPENSE FUNCTIONS AND PROGRAMS

Rev 1705.01 Function: General Government. Expenditures for the legislative and executive branches of government shall be as follows:

(a) Account 4130, executive, shall be for expenditures related to the executive branch of government including services provided by:

(1) Selectmen;

(2) Mayors;

(3) Aldermen;

(4) Councilors;

(5) Managers;

(6) Administrative assistants; and

(7) Support staff.

(b) Account 4140, election, registration and vital statistics, shall be for expenditures related to voting, statistical and census activities conducted by town or city clerks and their support staffs.

(c) Account 4150, financial administration, shall be for expenditures related to the financial and business functions of the government including:

(1) Accounting;

(2) Budgeting;

(3) Assessing;

(4) Treasury;

(5) Tax collecting;

(6) Auditing;

(7) Purchasing;

(8) Business systems; and

(9) Data processing;

(d) Account 4152, revaluation of property, shall be for contractual expenditures related to the revaluation of real property;

(e) Account 4153, legal expense, shall be for expenditures related to legal functions of the municipality, including, but not limited to:

(1) Legal defense;

(2) Ordinance drafting;

(3) Legal advice; and

(4) Interpretations of statutes, contracts, and other technical services;

(f) Account 4155, personnel administration, shall be for expenditures related to employee benefits not allocated to other programs, including, but not limited to:

(1) Municipality’s share of payroll taxes;

(2) Group insurance;

(3) Retirement plan contributions;

(4) Sick leave buy-outs; and

(5) Special awards;

(g) Account 4191, planning and zoning, shall be for expenditures related to the control of land use and management of community resources including:

(1) Master planning; and

(2) Zoning;

(h) Account 4194, general government buildings, shall be for expenditures related to the maintenance, repairs and protection of general governmental buildings and facilities except:

(1) Parks;

(2) Playgrounds;

(3) Other recreational facilities; or

(4) Other public works facilities maintained by the department that is directly responsible for their use;

(i) Account 4195, cemeteries, shall be for expenditures related to the care and maintenance of public cemeteries;

(j) Account 4196, insurance not otherwise allocated, shall be for expenditures for insurance coverage not allocated to other programs;

(k) Account 4197, advertising and regional associations, shall be for expenditures related to:

(1) Governmental advertising;

(2) Activities to further the growth or development of the municipality; and

(3) Participation in regional associations dedicated to these purposes; and

(l) Account 4199, other general government, shall be for expenditures for general governmental purposes or operations not classified in (a) through (k) above.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96 (from Rev 1707); ss by #8179, eff 9-24-04

Rev 1705.02 Function: Public Safety. Expenditures related to the protection of persons and property shall be as follows:

(a) Account 4210, police, shall be for expenditures related to law enforcement including:

(1) Traffic control;

(2) Protection of person and property;

(3) Safety;

(4) Criminal investigation; and

(5) Other police functions;

(b) Account 4215, ambulances, shall be for expenditures related to ambulance services;

(1) Prevention and suppression;

(2) Inspections; and

(3) Safety training;

(d) Account 4240, building inspection, shall be for expenditures related to:

(1) Inspections of building plans;

(2) Inspectional services of all improvements, in need of periodic examination, including:

a. Plumbing;

b. Electrical;

c. Gas and other utilities;

d. Boiler;

e. Elevator; and

f. Air conditioning; and

(3) Weights and measures;

(e) Account 4290, emergency management, shall be for expenditures related to the planning and administration of programs initiated to respond to unforeseen or unexpected events such as, but not limited to:

(1) Acts of nature;

(2) Riots;

(3) Terrorist attack; and

(4) Other safety hazards;

(f) Account 4299, other public safety, shall be for expenditures related to public safety matters not otherwise classified in (e) above.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96 (from Rev 1707); ss by #8179, eff 9-24-04

Rev 1705.03 Function: Airport or Aviation Center. Expenditures related to the municipal airport or aviation center shall be as follows:

(a) Account 4301, administration, shall be for administrative expenditures related to the maintenance and care of the municipal airport or aviation center;

(b) Account 4302, airport operations, shall be for expenditures related to operating and maintaining a municipal airport or aviation center; and

(c) Account 4309, other, shall be for expenditures related to the municipal airport or aviation center not classified in (a) or (b) above.

Source. #6335, eff 9-24-96 (from Rev 1707); ss by #8179, eff 9-24-04

Rev 1705.04 Function: Highways and Streets. Expenditures related to the maintenance and care of highways, streets and bridges shall be as follows:

(a) Account 4311, administration, shall be for administrative expenditures related to the maintenance and care of:

(1) Highways;

(2) Streets; and

(3) Bridges;

(b) Account 4312, highways and streets, shall be for expenditures related to roadways and walkways including:

(1) Paving;

(2) Snow removal;

(3) Street cleaning; and

(4) Maintenance of roads, curbs and gutters, storm drains, gravel paths and sidewalks;

(1) Bridges;

(2) Viaducts;

(3) Grade separations;

(4) Trestles; and

(5) Railroad crossings;

(d) Account 4316, street lighting, shall be for expenditures related to street lighting, including:

(1) Utility charges;

(2) Fixtures;

(3) Lamp replacements, maintenance and repairs; and

(e) Account 4319, other highway, streets and bridges, shall be for expenditures related to highway, street and bridge activities not classified in (a) through (d) above.

Source. #6335, eff 9-24-96 (from Rev 1707); ss by #8179, eff 9-24-04

Rev 1705.05 Function: Sanitation. Expenditures related to the removal and disposal of sewage and other waste materials shall be as follows:

(a) Account 4321, administration, shall be for administrative expenditures related to sanitation activities;

(b) Account 4323, solid waste collection, shall be for expenditures related to:

(1) Garbage and other refuse collection; and

(2) Delivery to the disposal facility;

(c) Account 4324, solid waste disposal, shall be for expenditures related to the disposal of garbage and other refuse including:

(1) Landfill operations;

(2) Incineration;

(3) Recycling; and

(4) Other disposal methods;

(d) Account 4325, solid waste clean-up, shall be for expenditures related to the clean-up of solid waste facilities including:

(1) Landfill caps; and

(2) Hazardous waste clean-up;

(e) Account 4326, sewage collection and disposal, shall be for expenditures related to:

(1) Collection and disposal of sewage;

(2) Waste water treatment; and

(f) Account 4329, other sanitation, shall be for expenditures for other sewer or solid waste activities not classified in (a) through (e) above.

Source. #6335, eff 9-24-96 (from Rev 1707); ss by #8179, eff 9-24-04

Rev 1705.06 Function: Water Distribution and Treatment. Expenditures related to the treatment, distribution and conservation of water shall be as follows:

(a) Account 4331, administration, shall be for administrative expenditures for water:

(1) Treatment;

(2) Distribution; and

(3) Conservation activities;

(b) Account 4332, water services, shall be for expenditures related to the distribution of water;

(c) Account 4335, water treatment, shall be for expenditures related to the preservation and treatment of water and the costs of operating a water treatment facility;

(d) Account 4338, water conservation, shall be for expenditures related to water conservation programs or activities; and

(e) Account 4339, other water, shall be for expenditures related to other water activities not classified in (a) through (d) above.

Source. #6335, eff 9-24-96 (from Rev 1707); ss by #8179, eff 9-24-04

Rev 1705.07 Function: Electric. Expenditures related to either the generation of or sale of electricity by the municipality to customers shall be as follows:

(a) Account 4351, administration, shall be for administrative expenditures related to:

(1) The generation of electricity for resale;

(2) The purchase of electricity for resale; and

(3) The resale of electricity;

(b) Account 4352, generation, shall be for expenditures related to the production of electricity by municipal assets;

(c) Account 4353, purchase costs, shall be for expenditures to purchase electricity from third party providers for resale;

(d) Account 4354, electric equipment maintenance, shall be for expenditures related to:

(1) The maintenance of generating equipment; and

(2) The maintenance of electricity distribution equipment owned by the municipality; and

(e) Account 4359, other electric costs, shall be for expenditures for electrical purposes not classified in (a) through (d) above.

Source. #6335, eff 9-24-96 (from Rev 1707); ss by #8179, eff 9-24-04

Rev 1705.08 Function: Health. Expenditures related to the conservation and improvement of public health shall be as follows:

(a) Account 4411, administration, shall be for administrative expenditures related to regulatory and inspection activities essential to the preservation and promotion of improved public health;

(b) Account 4414, pest control, shall be for expenditures related to:

(1) Control of animals, insects and rodents; and

(2) Prevention and treatment of diseases there from;

(1) Public health clinics;

(2) Municipal hospitals;

(3) Long term care facilities; and

(4) Rehabilitation centers; and

(d) Account 4419, other health, shall be for expenditures for health programs not classified in (a) through (c) above.

Source. #6335, eff 9-24-96 (from Rev 1707); ss by #8179, eff 9-24-04

Rev 1705.09 Function: Welfare. Expenditures related to public assistance for individuals unable to provide essential needs for themselves shall be as follows:

(a) Account 4441, administration, shall be for administrative expenditures related to welfare activities;

(b) Account 4442, direct assistance, shall be for expenditures for public assistance to recipients unable to provide essential needs for themselves;

(c) Account 4444, intergovernmental welfare payments, shall be for expenditures paid to agencies of another government providing services including but not limited to:

(1) Soup kitchens;

(2) Day care centers;

(3) Housing assistance centers;

(4) Public elderly care centers; and

(5) Orphanages;

(d) Account 4445, vendor payments, shall be for expenditures to private individuals or organizations that provide public assistance; and

(e) Account 4449, other welfare, shall be for expenditures for goods or services not classified in (a) through (d) above.

Source. #6335, eff 9-24-96 (from Rev 1707); ss by #8179, eff 9-24-04

Rev 1705.10 Function: Culture and Recreation. Expenditures for cultural and recreational activities maintained for the benefit of residents and visitors shall be as follows:

(a) Account 4520, parks and recreation, shall be for expenditures for maintenance and administrative costs related to:

(1) Recreational activities;

(2) Public parks;

(3) Playgrounds;

(4) Walking paths;

(5) Bike trails;

(6) Tennis courts;

(7) Golf courses;

(8) Arenas;

(9) Swimming areas; and

(10) Recreational or cultural buildings;

(b) Account 4550, library, shall be for expenditures related to the operations and maintenance of the public library system and facilities;

(c) Account 4583, patriotic purposes, shall be for expenditures related to public celebrations for holidays and other purposes; and

(d) Account 4589, other culture and recreation, shall be for expenditures for culture and recreation activities not classified in (a) through (c) above.

Source. #6335, eff 9-24-96 (from Rev 1707); ss by #8179, eff 9-24-04

Rev 1705.11 Function: Conservation. Expenditures related to the conservation and development of natural resources shall be as follows:

(a) Account 4611, administration, shall be for administrative expenditures related to conservation activities;

(b) Account 4612, purchase of natural resources, shall be for expenditures related to the acquisition of natural resources including:

(1) Water;

(2) Soil;

(3) Forest; and

(4) Land; and

(c) Account 4619, other conservation, shall be for expenditures not classified in (a) and (b) above, related to the preservation, conservation and development of natural resources including:

(1) Water;

(2) Soil;

(3) Forest; and

(4) Land.

Source. #6335, eff 9-24-96 (from Rev 1707); ss by #8179, eff 9-24-04

Rev 1705.12 Function: Redevelopment and Housing. Expenditures related to the planning and provision of adequate housing and the redevelopment of substandard and blighted physical facilities shall be as follows:

(a) Account 4631, administration, shall be for administrative expenditures related to redevelopment and housing activities; and

(b) Account 4632, redevelopment and housing, shall be for expenditures related to redevelopment and housing.

Source. #6335, eff 9-24-96 (from Rev 1707); ss by #8179, eff 9-24-04

Rev 1705.13 Function: Economic Development. Expenditures related to the economic development of the municipality shall be as follows:

(a) Account 4651, administration, shall be for administrative expenditures related to economic development activities;

(b) Account 4652, economic development, shall be for expenditures to promote economic growth and development including programs that:

(1) Encourage renewal and rehabilitation of:

a. Disadvantaged areas; or

b. Businesses; and

(2) Retrain classes of people; and

Source. #6335, eff 9-24-96 (from Rev 1707); ss by #8179, eff 9-24-04

Rev 1705.14 Function: Debt Service. Expenditures related to interest and principal payments on long term debt shall be as follows:

(a) Account 4711, principal – long term bonds and notes, shall be for expenditures related to the payment and retirement of long term debt;

(b) Account 4712, principal – other debt, shall be for expenditures related to payment of principal associated with long term debt other than bonds or notes;

(c) Account 4721, interest – long term bonds and notes, shall be for expenditures related to the payment of interest associated with long term debt;

(d) Account 4722, interest – other debt, shall be for expenditures related to payments of interest on long term debt other than bonds or notes;

(e) Account 4723, interest on tax and revenue anticipation notes, shall be for expenditures related to payment of interest on short-term borrowing for less than one year; and

(f) Account 4790, other debt service charges, shall be for expenditures for interest and other financing charges not associated with debt obligations including but not limited to:

(1) Late payment penalties;

(2) Fiscal agents’ fees; and

(3) Issuance costs.

Source. #6335, eff 9-24-96 (from Rev 1707); ss by #8179, eff 9-24-04

Rev 1705.15 Function: Capital Outlay. Expenditures related to capital outlays shall be as follows:

(a) Account 4901, land shall be for expenditures related to:

(1) The acquisition of land for future use; or

(2) Land purchased for conservation purposes not allocated to other functions;

(b) Account 4902, machinery, vehicles and equipment, shall be for expenditures related to the acquisition of government owned vehicles and equipment not allocated to other functions;

(1) Acquisition;

(2) Repair;

(3) Renovation; and

(4) Reconstruction or construction of a public building not allocated to other functions; and

(d) Account 4909, improvements other than buildings, shall be for expenditures related to capital project activity that is not otherwise classified.

Source. #6335, eff 9-24-96 (from Rev 1707); ss by #8179, eff 9-24-04

Rev 1705.16 Function: Interfund Operating Transfers Out. Financial outflows to other funds shall be as follows:

(a) The account 4911 classification shall be used for transfers to the general fund;

(b) The account 4912 classification shall be used for transfers to special revenue funds;

(d) The account 4914 classification shall be used for transfers to proprietary funds;

(e) The account 4915 classification shall be used for transfers to capital reserve funds;

(f) The account 4916 classification shall be used for transfers to expendable trust funds, except for health maintenance trust funds;

(g) The account 4917 classification shall be used for transfers to health maintenance trust funds formed pursuant to RSA 31:19-a, V;

(h) The account 4918 classification shall be used for transfers to nonexpendable trust funds; and

(i) The account 4919 classification shall be used for transfers to any agency funds.

Source. #6335, eff 9-24-96 (from Rev 1707); ss by #8179, eff 9-24-04

Rev 1705.17 Function: Payment to or Property Tax Assessments on Behalf of Other Governments. Payments made to other governmental units shall be as follows:

(a) Account 4931 shall be for taxes assessed for the county;

(b) Account 4932 shall be for taxes assessed for precincts or village districts;

(d) Account 4934 shall be for taxes assessed for the state; and

(e) Account 4939 shall be for payments to other governments.

Source. #6335, eff 9-24-96 (from Rev 1707); ss by #8179, eff 9-24-04

PART Rev 1706 CLASSIFICATION OF BALANCE SHEET ACCOUNTS FOR REPORTING ON FORM MS-5, ANNUAL CITY/TOWN FINANCIAL REPORT

Rev 1706.01 Classification of Assets and Other Debits. A municipality shall report and classify probable future economic benefits obtained or controlled by a municipality as a result of past transactions or events as follows:

(a) Account 1010, cash and equivalents, shall be for cash on hand, or in petty cash or on deposit with financial institutions, such as but not limited to:

(1) Currency;

(2) Coin;

(3) Checks; and

(4) Money orders;

(b) Account 1030, investments, shall be for securities that provide revenues in the form of interest and dividends;

(d) Account 1110, tax liens receivable, shall be for legal claims against property that have been exercised due to nonpayment of:

(1) Delinquent taxes;

(2) Interest and penalties; and

(3) The costs of converting delinquent taxes into tax liens;

(e) Account 1150, accounts receivable, shall:

(1) Be for amounts owed on open accounts from private individuals or organizations for goods and services furnished by a government; and

(2) Not be amounts due from other funds or from other governments;

(f) Account 1260, due from other governments, shall be for amounts owed to the municipality from another government which might represent charges for:

(1) Goods and services;

(2) Loans and intergovernmental grants;

(3) Entitlements;

(4) Shared revenues; or

(5) Payments in lieu of taxes;

(g) Account 1310, due from other funds, shall be for amounts owed to one municipal fund from another municipal fund representing charges for:

(1) Goods and services; and

(2) Interfund advances to another municipal fund;

(h) Account 1400, other current assets, shall be for assets, not included elsewhere, whose economic benefit shall be converted to cash or used to meet a current liability within one accounting cycle;

(i) Account 1610, land and improvements, shall be for:

(1) Land purchased or otherwise acquired; and

(2) All improvements made to ready the land for use, net of any applicable depreciation;

(j) Account 1620, buildings, shall be for:

(1) Buildings purchased or otherwise acquired;

(2) All expenditures related to construction of buildings, or improvements made to extend the life of the structure; or

(3) The capitalized costs of leased property if the conditions of the lease meet the criteria specified in FASB statements and interpretations, net of any depreciation;

(k) Account 1640, machinery, vehicles and equipment, shall be for:

(1) Machinery and equipment purchased or otherwise acquired;

(2) All expenditures for the construction of machinery and equipment; or

(3) The capitalized costs of leased machinery and equipment if the conditions of the lease meet the criteria specified in FASB statements and interpretations, net of any depreciation;

(l) Account 1650, construction in progress, shall be for the cost of construction undertaken but not yet completed;

(m) Account 1660, improvements other than buildings, shall be for all expenditures for improvements which are immovable, such as:

(1) Roads, bridges, and curbs;

(2) Gutters, streets, and sidewalks;

(3) Drainage systems; and

(4) Exterior lighting systems;

(n) Account 1670, tax deeded property, shall be for the value of properties acquired by the tax lien process as represented by the amounts of:

(1) Outstanding taxes, penalties and interest;

(2) Costs of identifying mortgagees and statutory fees; and

(3) Other incidental costs incurred between the execution of the lien and the recording of the deed; and

(o) Account 1700, other assets, shall be for intangible assets and other assets, not included elsewhere, whose economic benefit shall be converted to cash or used to meet liabilities at some future time beyond the next accounting cycle.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96 (from Rev 1708); ss by #8179, eff 9-24-04

Rev 1706.02 Liabilities. Probable future sacrifices of economic benefits arising from present obligations of a municipality to transfer assets or provide services to other entities in the future as a result of past transactions or events shall be classified as follows:

(a) Account 2020, warrants and accounts payable, shall be for balances owed to others for:

(1) Goods;

(2) Supplies,

(3) Services purchased on open accounts;

(4) Payroll; and

(5) Deductions payable;

(b) Account 2030, compensated absences payable, shall be for balances arising through accounting recognition of unpaid costs that come into existence in the current period which will be discharged at a future time, such as but not limited to, earned time for:

(1) Vacation;

(2) Illness; and

(3) Holidays;

(c) Account 2050, contracts payable, shall be for amounts due on contracts for goods and services, including retainage, furnished to a government;

(d) Account 2070, due to other governments, shall be for amounts owed by the municipality to another government, such as:

(1) Goods and services;

(2) Loans and intergovernmental grants;

(3) Entitlements;

(4) Shared revenues; or

(5) Payments in lieu of taxes;

(e) Account 2075, due to school districts, shall be for amounts owed by the municipality to a school district;

(f) Account 2080, due to other funds, shall be for amounts owed by one municipal fund to another municipal fund representing charges for:

(1) Goods and services, and

(2) Interfund advances from another fund;

(g) Account 2220, deferred revenue, shall be for amounts for which asset recognition requirements have been met, but for which revenue recognition criteria have not yet been met, in accordance with Rev 1702.02(a)(1), or Rev 1702.02(b)(1);

(h) Account 2230, notes payable - current, shall be for the face value of notes generally due within one year, including:

(1) Tax anticipation notes payable; and

(2) Revenue anticipation notes payable;

(i) Account 2250, bonds payable - current, shall be for the face value of bonds due within one year;

(j) Account 2270, other payables, shall be for liabilities, not included elsewhere, which shall require the sacrifice of economic benefits within one accounting cycle;

(k) Account 2310, notes and bonds payable - long term, shall be for amounts owed by the municipality on notes and bonds not due within one year; and

(l) Account 2390, other long-term liabilities, shall be for liabilities, not included elsewhere, which shall require the sacrifice of economic benefits at some future time beyond the next accounting cycle.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96 (from Rev 1708); ss by #8179, eff 9-24-04

Rev 1706.03 Fund Equity and Other Credits. Fund equity and other credits shall be for residual interest in the assets of a fund that remains after deducting its liabilities and classified as follows:

(a) Account 2440, reserve for encumbrances, shall be for segregation of a portion of a fund balance for commitments related to unperformed contracts;

(b) Account 2450, reserve for continuing appropriations, shall be for segregation of a portion of a fund balance which represents the unexpended portion of a non-lapsing special warrant article;

(c) Account 2460, reserve for appropriations voted from surplus, shall be for segregation of a portion of a fund balance set apart by the legislative body for a particular purpose;

(d) Account 2490, reserve for special purposes, shall be for segregation of a portion of a fund balance for a specific future use;

(e) Account 2530, unreserved fund balance, shall be for the unsegregated residual interest in the assets of a fund that remains after deducting its liabilities;

(f) Account 2610, municipal contributed capital, shall be for permanent contribution by a municipality to a proprietary fund;

(g) Account 2620, other contributed capital, shall be for permanent contribution by entities other than the municipality to a proprietary fund;

(h) Account 2790, retained earnings, shall be for the accumulated earnings of a proprietary fund; and

(i) Account 2800, investment in general fixed assets, shall be for an account representing the government’s investment in capital assets reported in the general fixed assets account group.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96 (from Rev 1708); ss by #8179, eff 9-24-04

PART Rev 1707 REPORTS REQUIRED BY RSA 21-J:34

Rev 1707.01 Form Availability.

(a) Forms shall be available by:

(1) Written request to the department;

(2) Calling (603) 271-3397; or

(3) On the department’s web site at www.revenue.nh.gov.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96 (from Rev 1709); ss by #8179, eff 9-24-04

Rev 1707.02 Filing Information.

(a) All reports filed with the department shall be:

(1) Mailed to:

New Hampshire Department of Revenue Administration

Municipal Finance

PO Box 487

Concord, NH 03302-487; or

(2) Hand delivered to the department at:

Governor Hugh J. Gallen Office Park South

109 Pleasant Street

Medical and Surgical Building

Concord, NH.

(b) Timely filing of all reports shall be in accordance with:

(1) RSA 21-J:34;

(2) Statutes addressing specific reports; or

(3) Time periods established by these rules or Rev 200.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96 (from Rev 1709); ss and moved by #8179, eff 9-24-04 (from Rev 1707.01)

Rev 1707.03 Form MS-1, Summary Inventory of Valuation.

(a) Form MS-1, summary inventory of valuation, shall be completed and filed on or before September 1 with the department by the governing body or assessors for a city or an incorporated town and the county commissioners for an unincorporated place by providing:

(1) An indication whether the filing is the:

a. Original date;

b. A copy; or

c. Revision date;

(2) The valuation of each class and subclass of property, as follows:

a. Land only values and acreage, which shall include, but not be limited to:

1. Current use land, at current use values;

2. Residential land;

3. Conservation restriction assessment at current use values;

4. Discretionary easements;

5. Discretionary preservation easements;

6. Commercial and industrial land; and

7. Tax exempt and non-taxable land;

b. Buildings only values which shall include, but not be limited to:

1. Residential buildings;

2. Manufactured housing as defined in RSA 674:31;

3. Commercial and industrial buildings;

4. Discretionary preservation easements including number of structures; and

5. Tax exempt and non-taxable buildings;

c. For public water or sewer utilities, the value of real estate for:

1. Public water or sewer utilities assessed pursuant to RSA 83-F;

2. Public water or sewer utilities not assessed pursuant to RSA 83-F;

3. Privately owned water supply or sewer companies; and

4. Municipally owned water supply or sewer companies, if taxable;

d. For public utilities, the value of real estate pursuant to RSA 72 for:

1. Electric plants;

2. Telephone companies;

3. Gas companies; and

4. Oil pipeline companies;

e. Value of mature wood and timber pursuant to RSA 79:5;

f. The total number granted and total dollar amounts of valuation exemptions pursuant to RSA 72, which shall include, but not be limited to:

1. Certain disabled veterans eligible pursuant to RSA 72:36-a;

2. Improvements to assist persons with disabilities;

3. Improvements to assist deaf persons;

4. Standard exemption for school dining rooms, dormitories and kitchens; and

5. Water and air pollution control;

g. The total number granted, amount granted per exemption and total dollar amounts of valuation exemptions, pursuant to RSA 72 which shall include, but not be limited to:

1. Blind;

2. Disabled; and

3. Deaf;

h. The total number granted, and total dollar amounts of valuation exemptions, which shall include, but not be limited to:

1. The elderly;

2. Solar energy systems;

3. Wind power energy systems;

4. School dining room, dormitory and kitchen facilities in excess of the standard exemption; and

5. Wood heating energy systems;

i. For payment in lieu of taxes, the dollar amount and each source(s) received in lieu of taxes;

j. The number of and estimated dollar amounts of tax credits pursuant to RSA 72 for:

1. Veterans; and

2. Other war service credits;

k. Disabled exemption report including:

1. Income limits for single and married; and

2. Asset limit; and

l. Adoption date and dollar amount of tax increment financing districts including:

1. Original assessed value;

2. Unretained captured assessed value;

3. Retained captured assessed value; and

4. Current assessed value.

(b) The valuation of a precinct, village district or any school district which differs from that of the town or city, the governing body or assessors shall:

(1) Identify the unit of government; and

(2) Provide the same information for the unit of government as listed in Rev 1707.03 (a)(2) above.

(c) Utility property valuations shall include the name and valuation of companies taxed pursuant to RSA 72:6 and RSA 72:8 as follows:

(1) Gas companies;

(2) Electric and hydroelectric companies;

(3) Oil and pipeline companies; and

(4) Water and sewer companies.

(d) Pursuant to the requirement established by RSA 21-J:34, I and RSA 21-J:35, governing body or assessors shall submit the following:

(1) For elderly exemptions:

a. The maximum allowable dollar amount of elderly exemption by age adopted by the town or city;

b. The total dollar amount of elderly exemption by age;

c. The number of individuals, segregated by age ranges pursuant to RSA 72:39-b I, (c), submitting a new application for an elderly exemption in the current year;

d. The total number of individuals, segregated by age ranges pursuant to RSA 72:39-b I, (c), granted an elderly exemption for the current year;

e. Income limits for single or married; and

f. Asset limits;

(2) For current use assessments, the number of:

a. Property owners with current use assessment in that year;

b. Total parcels assessed under current use in that year;

c. Total acres receiving the recreation adjustment in that year;

d. Total acres removed from current use in that year; and

e. Acres and assessed valuation in each category of current use for that year;

(3) For conservation restriction assessments, the total number of:

a. Owners in conservation restriction;

b. Land parcels in conservation restriction;

c. Acres receiving the recreation adjustment; and

d. Acres removed from conservation restriction for the current year;

(4) The total number of acres by classification and assessed value of each classification receiving conservation restriction;

(5) For discretionary easements:

a. Total number of owners granted discretionary easements;

b. Total number of acres;

c. Total assessed valuation; and

d. Description of granted discretionary easements; and

(6) For discretionary preservation easements:

a. Total number of owners granted discretionary preservation easements;

b. Total number of structures and acres;

c. Total assessed valuation; and

d. Description of granted discretionary preservation easements; and

(7) A statement signed by at least a majority of the selectmen, assessors or county commissioners stating:

“This is to certify that the information provided in this report was taken from the official records and is correct to the best of our knowledge and belief.”

(e) Form MS-1 shall be filed by September 1.

(f) Failure to file Form MS-1 shall constitute a failure to comply with RSA 21-J:34.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96 (from Rev 1709); ss and moved by #8179, eff 9-24-04 (from Rev 1707.02)

Rev 1707.04 Form MS-1 EXT, MS-1 Extension Request.

(a) An initial extension of time to file Form MS-1 may be obtained by filing Form MS-1 EXT, MS-1 Extension Request with the department prior to the original due date.

(b) Additional extensions of time to file Form MS-1 may be obtained by filing Form MS-1 EXT, MS-1 Extension Request with the commissioner prior to the expiration of the municipality’s most current extension.

(1) Name of municipality;

(2) Fax and telephone numbers;

(3) Date of request;

(4) Ending date of extension requested;

(5) Just cause for the request such as, but not limited to:

a. A delay in a revaluation or statistical update;

b. A delay in assessments;

c. Hardship due to the inability of the assessor to complete the work due to personal circumstances;

d. Pending a court of board of tax and land appeals decision; or

e. Lack of technical expertise to complete the form; and

(6) Signatures of the majority of the governing body or assessors.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96 (from Rev 1709); ss by #8179, eff 9-24-04

Rev 1707.05 Form MS-2, Report of Appropriations Actually Voted.

(a) Form MS-2, report of appropriations actually voted shall be completed and filed by the governing body or their designee with the department within 20 days after the meeting when the appropriations were voted by the legislative body.

(b) Form MS-2 shall be completed in accordance with the uniform classification of accounts in this chapter by providing:

(1) Date of the meeting;

(2) County;

(3) Municipality’s:

a. Name and address;

b. Phone and fax numbers; and

c. E-mail address, if applicable;

(4) For each account:

a. Warrant article number; and

b. Appropriation amount as voted;

(5) A statement stating:

“This is to certify that the information contained in this form, appropriations actually voted by the town/city meeting was taken from official records and is complete, to the best of our knowledge and belief.”; and

(6) Dated signatures of the majority of the governing body or their designee.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96 (from Rev 1709); ss and moved by #8179, eff 9-24-04 (from Rev 1707.03)

Rev 1707.06 Form MS-4, Revised Estimated Revenues.

(a) Form MS-4, revised estimated revenues, shall be completed and filed by the governing body or their designee by September 1 with the department by providing:

(1) Municipality’s name;

(2) An indication of the fiscal year;

(3) Warrant article number, if applicable, and revised estimated revenue for each account;

(4) Requested overlay amount; and

(5) Dated signature of a member of the governing body or their designee.

(b) Form MS-4 shall be completed in accordance with the uniform classification of accounts in this chapter.

Source. #4940, eff 9-25-90; ss by #6335, eff 9-24-96 (from Rev 1709); ss and moved by #8179, eff 9-24-04 (from Rev 1707.05)

Rev 1707.07 Form MS-5, Annual City/Town Financial Report.

(a) Form MS-5, annual city/town financial report, shall be completed and filed by the governing body, or their designee, with the department by providing:

(1) An indication of the fiscal year;

(2) Amount of modified accrual revenue for current operations from:

a. Taxes;

b. Education purposes, if applicable;

c. Licenses, permits, and fees;

d. Federal government;

e. State of New Hampshire;

f. Inter-governmental;

g. Charges for services;

h. Inter-fund operating transfers; and

i. Other financial sources;

(3) Modified accrual expenditures for current operations with detail for:

a. General government;

b. Public safety;

c. Airport or aviation center;

d. Highways and streets;

e. Sanitation;

f. Water distribution and treatment;

g. Electric;

h. Health;

i. Education purposes, if applicable;

j. Welfare;

k. Culture and recreation;

l. Conservation;

m. Redevelopment and housing;

n. Economic development;

o. Debt service;

p. Capital outlay;

q. Inter-fund operating transfers out; and

r. Payment to other governments;

(4) Modified accrual basis beginning and end of year for general fund balance sheet for:

a. Assets; and

b. Liabilities and fund equity;

(5) Beginning and end of year debit and credit for amortization for general obligations over 5 years; and

(6) Amortization of long term debt;

(7) Reconciliation of:

a. School district liability;

b. Tax anticipation notes;

c. Estimated allowance for abatements; and

d. Taxes and liens receivable;

(8) All other funds on an accrual basis including: