New Mexico Register / Volume XXXVII,
Issue 20 / October 20, 2026
TITLE 6 PRIMARY
AND SECONDARY EDUCATION
CHAPTER 20 PUBLIC
SCHOOL FINANCE - BUDGETING AND ACCOUNTING
PART 2 GOVERNING
BUDGETING AND ACCOUNTING FOR NEW MEXICO PUBLIC SCHOOLS AND SCHOOL DISTRICTS
6.20.2.1 ISSUING AGENCY: Public
Education Department, hereinafter the department.
[6.20.2.1 NMAC - Rp, 6.20.2.1 NMAC, 10/20/2026]
6.20.2.2 SCOPE: This
regulation applies to public school districts, charter schools, and regional
education cooperatives in the state of New Mexico.
[6.20.2.2 NMAC - Rp, 6.20.2.2 NMAC, 10/20/2026]
6.20.2.3 STATUTORY AUTHORITY: This rule is adopted pursuant
to Sections 9-24-8, 22-2-1, 22-2-2, 22-5-7, 22-8-5, 22-8-6 through 22-8-12.1,
22-8-39, 22-8-40, 22-8-41, 22-13-13, 22-16-1, and 22-29-1 through 22-29-10 NMSA
1978.
[6.20.2.3 NMAC - Rp, 6.20.2.3 NMAC, 10/20/2026]
6.20.2.4 DURATION: Permanent.
[6.20.2.4 NMAC - Rp, 6.20.2.4 NMAC, 10/20/2026]
6.20.2.5 EFFECTIVE
DATE:
October 20, 2026, unless a later date is cited at the end of a section.
[6.20.2.5 NMAC - Rp, 6.20.2.5 NMAC, 10/20/2026]
6.20.2.6 OBJECTIVE: Establish
standards in budgets and uniform financial accounting for New Mexico public
schools and school districts. All budgets
and financial accounting of public schools and school districts shall be
maintained in accordance with the Public School Code, Chapter 22, NMSA 1978,
Generally Accepted Accounting Principles (GAAP), and federal laws and
regulations.
[6.20.2.6 NMAC - Rp, 6.20.2.6 NMAC, 10/20/2026]
6.20.2.7 DEFINITIONS:
A. “Bonded to practical capacity”
- A determination by the department that a public school district has
substantially utilized its available bonding capacity. In making this
determination, the department may consider bonding capacity, outstanding
indebtedness, assessed valuation, debt service obligations, projected capital
needs, and any other relevant financial information.
B. "Budget" - A written plan of
financial operation for one fiscal year to include an estimate of revenues and
proposed expenditures.
C. "Fiscal year" - A 12-month
period, beginning July 1 and ending June 30, to which the annual operating
budget applies.
D. "Fixed assets" - Land,
buildings, improvements other than buildings, equipment, machinery,
construction work in progress, and capital leased assets with a cost of $5000
or more. The definition of fixed assets
applies to all assets purchased regardless of funding source.
E. "GAAP" - generally accepted
accounting principles.
F. "Local school board" or “board” - the
governing body of a school district or charter school.
G. "Operating budget" - The
budget submitted and approved by the local school board by June 20 and
certified by the department on or before July 1.
H. “School district” - A public school district, charter school or
regional education cooperative (REC).
[6.20.2.7 NMAC - Rp, 6.20.2.7 NMAC, 10/20/2026]
6.20.2.8 PROCEDURAL
REQUIREMENTS:
A. School
districts shall account for financial transactions and develop and maintain
their budgets in accordance with the Public School Code, GAAP, and department
procedures for public school accounting and budgeting.
B. The
submittal deadlines for required reports and documents identified in this
regulation may be extended by the secretary of education or their designee
after a request has been submitted by the school district, provided the
extension is not in violation of state or federal law.
C. If
reporting requirements and deadlines are not met, the department may withhold
funds, suspend payments, or both, pursuant to 6.21.2.10 NMAC and 6.21.2.11
NMAC.
D. Business
officials, serving in the capacity of a supervisor or director or manager of
accounting or bookkeeping as mentioned in 6.63.12.8 NMAC, responsible for the
preparation and presentation of financial documentation and budget maintenance
will meet the competency requirements enumerated in 6.63.12.9 NMAC.
[6.20.2.8 NMAC - Rp, 6.20.2.8 NMAC, 10/20/2026]
6.20.2.9 BUDGET
PREPARATION STANDARDS:
A. School
districts shall follow budget requirements stated in Sections 22-8-5 and 22-8-6
through 22-8-12.1 NMSA 1978, and procedures of the department in preparing,
submitting, maintaining, and reporting budgetary information. Budgetary control
shall be at the function level. Over-expenditure of a function shall not be
allowed.
B. The
proposed budget for the ensuing fiscal year shall be submitted to the
department by April 15 of each year, unless extended to a later date by the
secretary of education.
C. The
department shall review the school district’s projected revenues, including
estimated tax production based on the most current assessed valuation from the
local taxing authority and estimated cash carryover for all funds. The budget
shall prioritize resources toward proven programs and methods that are linked
to improved student achievement and demonstrate parental involvement in the
budgeting process was solicited. The department shall confer with the school
district before determining where additions or reductions to the budget will be
incorporated.
D. Approval
of the proposed budget by the local school board shall be in a public hearing
held prior to June 20. The notice of public hearing for the adoption of the
budget shall be published in accordance with the Open Meetings Act, Section
10-15-1 et seq. NMSA 1978, Public
School Code, and local school board policy.
Certification of the proposed budget by the department shall be on or
before July 1. The approved and
certified budget then constitutes the operating budget.
E. On
or before the last working day of February, unless extended to a later date by
the secretary of education, school districts shall determine their audited cash
balances from the prior fiscal year in all funds and report them on the most
current form prescribed by the department. Cash balance carried forward from
the previous fiscal year in the operational fund shall not be used for salaries
and benefits.
F. Public school
districts shall submit a written request to the department prior to expending
money from its operational fund for the acquisition of a building site or the
construction of a new structure pursuant to Section 22-8-41 NMSA 1978. The
requirements of this subsection shall not apply to charter schools or RECs.
(1) The
department shall determine whether the public school district has bonded itself
to practical capacity for the fiscal year and project identified in the
request. At a minimum, the request shall include:
(a) a
description of the proposed project;
(b) the
amount of operational funds proposed to be expended;
(c) the
estimated total project cost;
(d) a
description of capital funding sources that have been utilized, considered, or
determined to be unavailable for the project, including an analysis of whether
expenditures currently budgeted in capital funds may be appropriately
reallocated to other funding sources, thereby making capital funds available
for the proposed project; and
(e) an
explanation of why the expenditure of operational funds is necessary.
(2) If the
department determines the public school district has not bonded itself to
practical capacity, the department may require additional information necessary
for the secretary's determination and certification, including information
regarding alternative capital funding sources, the public school district's
financial condition, whether expenditures currently budgeted in capital funds
may be appropriately funded from other sources, whether the proposed
expenditure is necessary for an adequate public educational program, whether
the proposed expenditure will unduly hamper current operations, information
obtained through consultation with the public school facilities authority, and
any other information deemed relevant by the department.
(3) A
determination that a public school district has bonded itself to practical
capacity and any certification by the secretary shall be valid only for the
project and fiscal year identified in the request.
G. The
operating budget and any authorized adjustments shall be integrated into the
school district’s accounting system after required approvals. Encumbrances shall be used as an element of
control and integrated into the budget system.
H. School
districts shall submit membership projections and budget requests that support
projected enrollment growth and associated growth units. If a school district's
projected enrollment growth is not supported by reliable estimates, reasonable
assumptions, or available evidence, the department may require additional
supporting documentation. The department may revise projected enrollment growth
and reduce budgeted projected growth units when the projection is unsupported.
[6.20.2.9 NMAC - Rp, 6.20.2.9 NMAC, 10/20/2026]
6.20.2.10 BUDGET
MAINTENANCE STANDARDS:
A. Budget
adjustment requests shall be submitted on the most current form prescribed by
the department. The school district shall maintain a log of all budget
adjustment requests to account for status, numerical sequence, and timely
approval at each level. The log is to be
retained for audit purposes.
B. School
districts shall submit budget adjustment requests for the operating budget to
the department for budget increases, budget decreases, transfers between
functional categories, and transfers from the emergency reserve account. The
department shall take
action on budget adjustment requests within 30 calendar days from the
date of receipt by the department
or such requests will otherwise be considered approved. Expenditures
shall not be made by the school district until budget authority has been
established and approved by the department.
Budget adjustments shall not be incorporated into the school district's
accounting system until approved by the department.
C. School
districts shall submit periodic financial reports using the department-approved
format. Reporting shall be monthly or quarterly, at the discretion of the
department. The school district shall be notified of its required reporting
frequency in writing by the department.
Required reporting frequency may be changed by the department at any
time during the year. Reports are due at
the department by the last working day of the month following the end of the
required reporting period, unless extended to a later date by the secretary of
education.
[6.20.2.10 NMAC - Rp, 6.20.2.10 NMAC, 10/20/2026]
6.20.2.11 INTERNAL
CONTROL STRUCTURE STANDARDS:
A. School
districts shall establish and maintain an internal control structure to provide
school district management with reasonable assurance that assets are
safe-guarded against loss from unauthorized use or disposition, that
transactions are executed in accordance with management's authorization and
recorded properly to permit the preparation of general purpose financial
statements in accordance with GAAP, and that state and federal programs are
managed in compliance with applicable laws and regulations. The internal
control structure shall include written administrative controls (rules,
procedures and practices, and policies) and accounting controls (activity
cycles, financial statement captions, accounting applications, including
computer systems) that are in accordance with GAAP.
B. School
districts shall establish and maintain written internal accounting controls
that provide for segregation of duties, authorization and recording procedures,
and sound accounting practices. Segregation of duties shall require that the
authorization, recording, and custody of assets for any transaction be
performed by different individuals.
(1)
When granting authorization to execute school
district business, school district management shall prioritize protection of
public trust.
(2)
School districts shall ensure that employees handling significant amounts of
cash are adequately bonded and that access to assets is limited to authorized
personnel.
(3) Receipts,
checks or warrants, purchase orders, and vouchers shall be sequentially
pre-numbered.
(4) School
districts shall have proper safeguards to protect unused checks and other
pre-numbered forms, undeposited cash and other receipts, and facsimile
signature plates.
(5) School
districts shall record transactions as necessary to support GAAP-compliant
financial statements and shall establish any additional criteria required to
maintain asset accountability.
(6) School
districts shall conduct independent checks on performance and proper valuation
of recorded amounts, such as clerical checks, reconciliations, comparison of
assets with recorded accountability, computer-programmed controls, management
review of reports that summarize the detail of account balances, and user
review of computer generated reports.
C. An
internal control structure is required to demonstrate the school district's
ability to record, process, summarize, and report financial data consistent
with the following financial statement assertions:
(1) rights
and ownership;
(2) existence
and occurrence;
(3) valuation
and allocations;
(4) completeness;
and,
(5) presentation
and disclosure.
D. The
internal control structure shall identify applicable laws and regulations and include
procedures providing reasonable assurance of compliance. Internal control
procedures shall be established, implemented, and documented through school
district correspondence, manuals, training, and other additional methods.
Appropriate internal control procedures shall be adopted by the local school
board within a school district to safeguard its assets, check the accuracy and
reliability of its accounting data, promote operational efficiency, and
encourage adherence to prescribed managerial policies. The internal control structure shall address
all school district transactions.
[6.20.2.11 NMAC - Rp, 6.20.2.11 NMAC, 10/20/2026]
6.20.2.12 ORGANIZATIONAL
STRUCTURE: School districts shall develop, establish,
and maintain an effective organizational structure that includes the following:
A. A
system for measuring and ensuring accountability for employee performance.
B. A
policy delegating responsibility for employee actions combined with sufficient
authority to perform assigned activities;
C. Creation
and maintenance of budgets and financial reports which facilitate the discharge
of assigned responsibilities and monitors activities at each level of the
organizational structure; and
D. A
system of checks and balances which separates incompatible activities to
preclude absolute control by any individual or unit and provides for supervision and monitoring of overall
school district activities by higher levels of management.
[6.20.2.12 NMAC - Rp, 6.20.2.12 NMAC, 10/20/2026]
6.20.2.13 FINANCIAL
STANDARDS:
A. General
ledger: School districts shall establish and maintain a general ledger in
accordance with GAAP. The general ledger will be comprised of individual funds
and account groups using the department’s uniform chart of accounts and shall be
reconciled every fiscal year with department records.
B. Funds
and account groups: School districts shall use funds and account groups to
report their financial position and operating results. Funds are classified
into three broad categories: a) governmental funds, b) proprietary funds, and
c) fiduciary funds. There are two account groups: a) general fixed assets and
b) general long-term debt.
C. Chart
of accounts: School districts shall prepare, maintain, and report budget and
financial information utilizing a standard and uniform chart of accounts.
D. Basis
of accounting: In accordance with Government Accounting Standards Board Statement
No. 34 (GASB 34), school districts shall use a full accrual basis of accounting
in preparation of annual financial statements and cash basis of accounting for
budgeting and reporting.
E. Financial
statements: The school district bears responsibility for its
financial statements and shall maintain adequate accounting records, prepare
financial statements in accordance with GAAP and GASB 34, and provide complete,
accurate, and timely information to the independent public accountant (IPA)
upon request. If there are differences between the financial statements, school district records, and department records, the IPA should
provide the adjusting entries to the school district to reconcile the report to
the school district records.
If the IPA prepared the financial statements, this fact shall be disclosed in
the notes to the financial statements. If the IPA prepared the financial
statements, this fact shall be disclosed in the notes to the financial
statements. The school district shall
make all reasonable efforts to assist the IPA with financial statement
preparation.
F. Financial
and compliance audit: School districts shall undergo a yearly audit of financial
records as required by Section 12-6-3, NMSA 1978.
G. Financial
reporting: School districts shall provide periodic financial information to the
local school board as prescribed by local school board action. Information
shall be presented at a regularly scheduled board meeting.
[6.20.2.13 NMAC - Rp, 6.20.2.13 NMAC, 10/20/2026]
6.20.2.14 CASH
CONTROL STANDARDS:
A. School
districts shall establish and maintain a cash management program to safeguard
cash and ensure prompt, accurate reporting in compliance with applicable state
and federal laws and regulations.
B. The
school district shall issue a factory pre-numbered receipt for all money
received. Pre-numbered receipts are to be controlled and secured. If a receipt
is voided, all copies shall be marked "VOID" and retained in the
receipt book.
C. Money
received and receipted shall be deposited in the bank within 24 hours or one
banking day. If the distance to the bank is considerable, or the cash
collection is limited to small amounts or low volume and it is impractical to
meet the 24-hour or one banking day requirement, the local school board may
request approval from the department for an alternative plan. The bank deposit
slip shall have the numbers from applicable receipts entered on it or attached
as a reference. An alternative deposit plan approved by the department shall
remain valid for one fiscal year.
D. A
cash receipts journal is to be used for each fiscal year beginning July 1 and
ending June 30, and is to be presented to the school district's auditor during
the annual audit.
E. The
school district shall verify that there are sufficient cash and budget prior to
the disbursement of cash. A revenue ledger is required for each revenue code as
approved in the finalized budget, and additional revenue ledgers may be added
as necessary.
F. The
school district shall establish and maintain a cash control ledger for each
fund or subfund in which all transactions affecting
cash are recorded. Cash balances reported to the department shall match the school
district's cash control ledger and annual audit. Inter-fund transfers of cash
among separate and distinct funds are not receipts or expenditures. Permanent
transfers of previously receipted cash require local school board and
department approval prior to the transfer. Pursuant to Section 6-10-43 NMSA
1978, requests to transfer any remaining balance in an interest or sinking fund
after all bonded obligations have been satisfied shall be submitted to the
department. Upon departmental review, the request will be forwarded to the
secretary of finance and administration for approval. No such transfer shall
occur without approval of the secretary of finance and administration. All
other types of cash transfers require only local school board approval.
(1) Temporary
transfers of cash are to be posted as "due from" and "due
to" to indicate inter-fund receivables and payables.
(2) Posting
errors are not to be erased, crossed out, or otherwise altered in the ledger. Corrections shall be made by separate entry,
with a cross-reference to the original error noted in the description column.
G. Clearing
accounts or pooled accounts may be used to combine more than one fund in one
bank account. Clearing accounts shall reconcile to a zero balance at the end of
each month. Bank reconciliations for clearing accounts shall be completed on a
monthly basis.
H. A
local school board, through the issuance of a formal board resolution, may
authorize the superintendent of schools or their designee to approve vouchers
for payment prior to a board meeting. A
summary listing of the vouchers and any additional information prescribed by
the local school board shall be presented at the next regular local school board
meeting for formal approval and entry in the minutes.
I. Vouchers
shall be numbered in such a manner as to provide a cross-reference between the
voucher, the check, and the check register. All blank checks shall be properly
safeguarded and an inventory of unused checks shall be taken periodically.
Completed vouchers and supporting documentation are to be placed in numerical
sequence, by the month in which they were paid, and filed for future reference
and annual audit.
(1) Each
warrant or check issued shall have printed on its face the words, "void
after one year from date". The fiscal officer shall cancel any warrant or
check outstanding for one year or more in accordance with Section 6-10-57(A)
NMSA 1978.
(2) The
fiscal officer shall keep a register of all canceled warrants or checks. The register shall show the number, date and
amount, name of payee, fund out of which it was payable, and date of
cancellation. The face amount shall
revert and be credited to the fund against which the warrant or check was
drawn.
J. All
bank accounts shall be reconciled on a monthly basis. A business official shall review reconciled
bank statements monthly. The bank statement, deposit slips, and canceled checks
shall be made available to the school district's auditor during the annual
audit.
K. The
school district shall submit cash reports to the department by the last working
day of the month following the end of the reporting period, unless extended to
a later date by the secretary of education.
L. If the department determines that a
school district's cash balance, financial condition, or fiscal practices
warrant additional safeguards, the department may require that budget authority
be reserved in a designated emergency reserve account. Such reserves may be
required to preserve fiscal stability, improve cash balances, restore solvency,
or otherwise protect the financial interests of the school district and the
state. Amounts reserved pursuant to this subsection shall not be transferred or
expended without the prior written approval of the secretary. Before requiring
an emergency reserve, the department shall provide the school district with
written notice that includes:
(1) the specific condition giving rise to
the reserve;
(2) the amount required to be reserved;
and
(3) the evidence used to determine the
amount.
M. If a
school district maintains a negative cash balance, the department may issue a
corrective action plan or request additional monthly financial reporting. If the
school district fails to comply, the department may consider suspending the school
district’s board of finance, pursuant to Section 22-8-39 NMSA 1978.
N. Petty
cash funds shall be utilized only in rare instances to facilitate small
payments. Petty cash funds are established by drawing a check made payable to
the employee charged with responsibility for the fund. The petty cash fund
shall contain cash or invoices totaling the full amount of the petty cash fund
and is to remain at the amount originally established.
(1) Petty
cash funds are to be reflected on the school district's balance sheet as cash
on hand.
(2) Petty
cash and change funds shall not be used to make loans to employees or for
cashing checks.
(3) Petty
cash may not contain more than $100 unless a higher amount is authorized
through local school board action.
(4) Change
funds shall be established pursuant to school district procedure.
O. School
districts shall obtain a surety bond for persons who handle or manage cash or
funds.
[6.20.2.14 NMAC - Rp, 6.20.2.14 NMAC, 10/20/2026]
6.20.2.15 INVESTMENTS:
A. The
school district shall account for public money placed in interest-bearing
deposits in accordance with Subsections (C) through (G) of Sections 22-8-40, 6-10-17,
and 6-10-31, NMSA 1978, and other federal and state laws applicable to the
investment of public school money.
B. Pledged
collateral: School districts shall require pledged collateral for all cash and
investments in accordance with Section 22-8-40 NMSA 1978.
[6.20.2.15 NMAC - Rp, 6.20.2.15 NMAC, 10/20/2026]
6.20.2.16 WAREHOUSE
AND SUPPLY INVENTORY: School
districts that maintain a warehouse shall conduct a physical inventory of
expendable goods and materials at the end of each fiscal year and shall
establish internal accounting controls over supplies inventory in accordance
with GAAP.
[6.20.2.16 NMAC - Rp, 6.20.2.16 NMAC, 10/20/2026]
6.20.2.17 PURCHASING:
A. School
districts shall establish and implement written policies and procedures for
purchasing in compliance with applicable grant requirements and the Procurement
Code, Section 13-1-21 et seq. NMSA 1978. An internal control structure over
purchasing shall be established and maintained to ensure compliance with school
district policy and state and federal regulations.
B. A
school district may contract with a business holding a current price agreement
with the state purchasing agent or a central purchasing office of another school
district, for services, construction, or items of tangible personal property
without the use of competitive sealed bids or competitive sealed proposals, subject
to the following conditions:
(1) the
services or construction meet the same standards and specifications as the
items to be procured;
(2) the
total quantity to be purchased would not exceed the quantity which may be
purchased under the existing applicable price agreement;
(3) the
purchase order clearly identifies the price agreement relied upon;
(4) the
price agreement relied upon is available for public and auditor inspection; and
(5)
where the agreement belongs to another school district's central purchasing
office, that school district has provided written consent to its reliance.
[6.20.2.17 NMAC - Rp, 6.20.2.17 NMAC, 10/20/2026]
6.20.2.18 PAYROLL: The local school
board shall establish written payroll policies and procedures which comply with
state and federal payroll regulations and maintain strict internal controls, close
supervision, and financial accounting in accordance with GAAP. School districts
shall maintain and have available for inspection the following employee record
documentation:
A. employment
contracts (including increments)
B. personnel/payroll
action forms;
C. certification
records;
D. employment
eligibility verification (federal form I-9 for citizenship certification);
E. federal
and state withholding allowance certificates;
F. pay
deduction authorizations;
G. pay or
position change notices;
H. Educational
Retirement Act plan application and
I. direct
deposit authorizations.
[6.20.2.18 NMAC - Rp, 6.20.2.18 NMAC, 10/20/2026]
6.20.2.19 TRAVEL
AND TRAINING: School districts shall establish and
implement written policies and procedures for travel and training in compliance
with the Per Diem and Mileage Act, Sections 10-8-1 through 10-8-8, NMSA 1978,
and department of finance and administration (DFA) regulations.
[6.20.2.19 NMAC - Rp, 6.20.2.19 NMAC, 10/20/2026]
6.20.2.20 INSURANCE:
A. Each school district shall
maintain adequate insurance coverage addressed in the Tort Claims Act, Section
41-4-1 et seq. NMSA 1978; the Workers' Compensation Act, Section 52-1-1 et seq.
NMSA 1978; Insurance of Public Buildings, Section 13-5-1 et seq. NMSA 1978;
Officers and Surety Bonds, Section 22-5-7 NMSA 1978; and the Public School
Insurance Authority Act, Sections 22-29-1 through 22-29-10 NMSA 1978.
B. Surety
bonds paid from the operational fund shall be approved by the department and
filed with the secretary of DFA pursuant to Subsection D of Section 22-5-7 NMSA
1978.
[6.20.2.20 NMAC - Rp, 6.20.2.20 NMAC, 10/20/2026]
6.20.2.21 DEBT
SERVICE AND BONDS:
A. School
districts shall create a debt service fund to account for resources used to
service general long-term debt, which shall be recorded in the general
long-term debt account group. General long-term debt includes noncurrent bonds,
as well as other noncurrent liabilities that might arise from compensated
absences.
B. Debt
service funds shall be established only when legally required or when resources
are being accumulated to meet future principal and interest payments. A single
debt service fund shall account for any restricted portion of a general
property tax used to finance principal and interest payments on all general
obligation bonds. Debt service funds shall be used only for the retirement of
general long-term debt and for payment of county collection costs. Remaining funds after satisfaction of all
debts may be transferred upon approval by the department and DFA pursuant to
Section 6-10-43 NMSA 1978.
C. All
general obligation bonds, except refunding bonds, shall be issued in accordance
with Sections 6-15-3 through 6-15-8 NMSA 1978. Refunding bonds shall be
governed by Sections 6-15-11 through 6-15-13 NMSA 1978.
D.
No school district shall issue or sell bonds after three years from the
initiation of proceedings for the election authorizing the issue, except as
provided in Sections 6-15-9 and 6-15-10 NMSA 1978.
E. Arbitrage: School districts shall not earn any income on
invested bond proceeds exceeding what would have been earned at the bond yield
rate, nor issue tax-exempt bonds to invest proceeds at a profit. Long-term investments of bond proceeds shall
not exceed the interest rate on the tax-exempt bonds.
[6.20.2.21 NMAC - Rp, 6.20.2.21 NMAC, 10/20/2026]
6.20.2.22 FIXED
ASSETS:
A.
Governmental fixed assets shall be recorded at
cost. Donated assets shall be recorded at their estimated fair market value at
the time of the donation.
B. Fixed
assets related to specific proprietary or trust funds shall be accounted for in
those funds. All other fixed assets shall be accounted for in the general fixed
asset account group.
C. Property
control system: The local school board
shall adopt a complete property control system for the acquisition and
accounting of long-term assets, including land and ground improvements,
buildings and related improvements, remodeling, additions, furniture,
machinery, and equipment. The system shall comply with GAAP, General Services
Department rules, the Procurement Code, and applicable state and federal
requirements.
D. Capital
projects: The acquisition, accountability, and disposition of fixed assets for
capital projects shall be in accordance with GAAP. Funds used to erect,
remodel, make additions to school buildings, or to purchase and improve public
school grounds shall be classified under capital projects.
[6.20.2.22 NMAC - Rp, 6.20.2.22 NMAC, 10/20/2026]
6.20.2.23 OTHER
SERVICES:
A. Food
services: Food service funds shall be accounted for in the special revenue fund
or the enterprise fund. All monies collected from the sale of food for the food
service operation are to be accounted for in accordance with GAAP, U.S.
department of agriculture (USDA) requirements, and Section 22-13-13 NMSA 1978.
B. Legal
fees: No school district funds shall be used for payment of personal legal
fees, including attorney’s fees and costs, of any school district or charter
school employee or local school board member. Any payment of legal fees shall
serve a clearly identifiable public interest. Personal legal fees include:
(1) legal
fees expended in obtaining or retaining any elected position;
(2) legal
fees incurred by any employee or local school board member in any civil action
filed by or against the employee or local school board member in one’s personal
capacity, unless, in the case of an action against the employee or local school
board member, the allegations arise from acts taken in the course and scope of one’s
employment or service; and
(3) legal
fees incurred by any employee or local school board member in the defense of
any criminal case, unless the charges arise from acts taken in the course and
scope of one’s employment or service.
C. Federal
and state grants:
(1) Flowthrough
funds: School districts shall use flowthrough grant
funds for their awarded purpose, submit complete and accurate required reports
within prescribed timeframes, and account for such funds in accordance with
GAAP, applicable federal regulations, and the grant award.
(2) Direct
funds: School districts shall use direct grant funds for their awarded purpose,
submit complete and accurate required reports within prescribed timeframes, and
account for such funds in accordance with GAAP, applicable federal regulations,
and the grant award. These direct funds shall be incorporated into
the school district operating budget without prior approval provided that the
school district submits a budget adjustment request to the department.
D. Student
activity funds (non-instructional activities): Funds set aside for
non-instructional activities shall be accounted for in the same manner as other operational fund budgets. Other assets held by the school district in a
fiduciary capacity for school or student organizations shall be accounted for
in accordance with GAAP and are not required to be budgeted. School districts are responsible for the
accountability of fiduciary funds. These funds are not considered public money
for purposes of the state Procurement Code.
School districts shall follow appropriate internal controls over such
funds and shall comply with all applicable laws, rules and regulations governing
the receipt, custody, and disbursement of activity funds.
E. Joint
powers agreements: Accounting for joint powers agreements, entered into
pursuant to the Joint Powers Agreement Act, Sections 11-1-1 through 11-1-7 NMSA
1978, shall be in accordance with the agreement.
[6.20.2.23 NMAC - Rp,
6.20.2.23 NMAC, 10/20/2026]
6.20.2.24 OTHER
ADMINISTRATIVE STANDARDS:
A. Transportation:
Student transportation is provided for in Section 22-16-1 et seq. NMSA 1978.
Monies allocated by the transportation unit of the department shall be utilized
for transportation expenditures only and accounted for in accordance with
department transportation regulations and GAAP.
B. Records
retention and disposition: The management of school district records shall be
in accordance with the Public Records Act, Section 14-3-1 et seq. NMSA 1978.
C. Open
Meetings Act: School districts shall comply with the provisions of the Open
Meetings Act, Section 10-15-1 et seq. NMSA 1978.
[6.20.2.24 NMAC - Rp, 6.20.2.24 NMAC, 10/20/2026]
6.20.2.25 SEVERABILITY:
In
the event that any one or more of the sections of this rule, in whole or in
part, should be held to be invalid, illegal, or unenforceable in any respect,
the validity, legality, and enforceability of the remaining sections of this
rule shall not in any way be affected or impaired.
[6.20.2.25 NMAC - N, 10/20/2026]
HISTORY OF 6.20.2 NMAC:
PRE-NMAC HISTORY: The material in this regulation
is derived from that previously with the State Records Center & Archives
under: SBE Rule 89-7, Manual of Procedure for Uniform Financial Accounting and
Budgeting for New Mexico School Districts, filed 12/8/1989; SBE Rule 93-1,
Governing Budgeting and Accounting for New Mexico Public Schools and Schools
Districts, filed 2/3/1993.
Other History: 6.20.2 NMAC - Governing Budgeting and Accounting For
New Mexico Public Schools and School Districts filed 11/01/1997, was repealed
and replaced by 6.20.2 NMAC - Governing Budgeting and Accounting For New Mexico
Public Schools and School Districts, effective 10/20/2026.