Nevada Administrative Code Chapter 354 - Local Financial Administration
1. Purpose of NAC Chapter 354
NAC Chapter 354 governs the financial management and administration of local government entities in Nevada. It sets rules and procedures for budgeting, accounting, reporting, auditing, and financial controls at the city, county, and other local government levels.
The chapter ensures:
Proper use of public funds.
Transparency and accountability in local finances.
Compliance with state laws regarding financial operations.
2. Scope
This chapter applies to:
Counties, cities, towns, and other local government agencies in Nevada.
Financial officers, treasurers, auditors, and other staff responsible for local finances.
It does not typically cover state-level financial administration or private entities.
3. Key Areas Covered
A. Budgeting
Local governments must prepare annual budgets in accordance with NAC provisions.
Budgets should include all anticipated revenues and expenditures.
Specific procedures are defined for public notice, hearings, and adoption of budgets.
Amendments to the budget during the year are allowed but require proper documentation and approval.
B. Accounting Practices
Requires uniform accounting systems across local entities to maintain consistency.
Local governments must record all financial transactions accurately.
Sets standards for fund accounting, segregating funds for specific purposes like capital projects, debt service, and general operations.
C. Financial Reporting
Local entities must prepare periodic financial statements.
Reports should show:
Revenues received
Expenditures made
Fund balances
These reports are often submitted to the Department of Taxation or State Controller.
D. Auditing
Annual independent audits are required for most local governments.
Auditors review:
Compliance with laws and regulations
Proper use of funds
Accuracy of financial statements
Audit findings must be publicly disclosed to ensure transparency.
E. Debt Management
NAC 354 regulates how local governments may issue bonds or take on debt.
Procedures include:
Legal limits on indebtedness
Required approvals from governing boards or voters
Reporting obligations for debt instruments
F. Investment of Funds
Specifies rules for investing local government funds safely.
Investments must prioritize security, liquidity, and yield in that order.
Common permitted investments include:
U.S. Treasury securities
Bank deposits insured by federal agencies
Certain state-approved instruments
G. Controls and Oversight
Establishes internal control procedures for safeguarding public funds.
Examples include:
Dual signatories on checks
Separation of accounting and custodial duties
Periodic reconciliation of accounts
H. Reporting for Special Funds
Some funds (like grants or trust funds) have specific reporting and accounting requirements.
Local governments must maintain records showing fund sources, expenditures, and compliance with grant terms.
4. Responsibilities of Officials
Treasurer/Finance Officer: Manages cash, investments, and receipts.
Controller/Auditor: Maintains accounting records and prepares reports.
Governing Board (City Council or County Commission): Approves budgets, monitors financial operations, and ensures compliance with NAC provisions.
5. Compliance and Enforcement
Failure to comply with NAC 354 can result in:
State oversight or intervention
Legal penalties for misuse of funds
Required corrective actions as recommended in audits
The chapter ensures that all financial activities by local governments remain lawful, transparent, and efficient.
6. Practical Implications
NAC 354 helps citizens and oversight bodies monitor how taxpayer money is used.
It creates a uniform framework for financial administration across Nevada.
It protects local governments from mismanagement, fraud, or inefficiency.
In summary, NAC Chapter 354 is the backbone of local financial accountability in Nevada, covering budgeting, accounting, auditing, investments, debt, and internal controls. It ensures that local governments operate efficiently and transparently with public funds.
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