Sec. 13b.02.02.21. Finances

A. An in-State institution shall operate in accordance with sound principles of financial management.

B. An in-State institution shall expend its revenue to provide adequately for instruction, administration, learning resources, student services, maintenance, equipment, and supplies. The institution's expenditures for specific functions shall be consistent with the goals and objectives of the institution.

C. Annual expenditures of an in-State institution shall be consistent with the annual revenue, financial plan, and other resources of the institution. The institution shall have adequate controls over expenditures in accordance with sound principles of financial management.

D. An in-State institution shall have appropriate and adequate financial planning to ensure the stability of the institution.

E. An in-State institution shall maintain its accounts in accordance with recognized national standards regarding institutions of higher education.

F. An in-State institution shall have a financial management process that includes the following functions:

(1) Ascertaining the institution's needs for funds;

(2) Generating adequate funds to meet the institution's needs;

(3) Using funds in a responsible manner to satisfy the institution's needs;

(4) Evaluating whether identified needs have been satisfied in the most efficient and effective manner;

(5) Maintaining a certified copy of its annual financial statements; and

(6) Providing a copy of the certified annual financial statements to the Commission upon request.

G. Audits.

(1) An in-State institution shall have a financial audit conducted at least every 2 years by an independent certified public accountant or a State legislative auditor, which provides a detailed and accurate picture of the financial status of the institution since the preceding audit.

(2) The audit shall be an unqualified audit.

(3) In the case of management issues raised by an audit, the latest audit shall indicate resolution of exceptions noted in the previous audit.

(4) An institution shall maintain a copy of its certified annual audit.

(5) A copy of the certified annual audit shall be made available to the Commission upon request.