Question

Many colleges and universities are supported by the government, while others are supported by private organizations.

• What bearing does the source of support have on the determination of authoritative accounting guidance?
• What financial statements would be required by the respective standard-setting body of each type of institution?
• How do these differences affect the comparability of information provided by these institutions?

Answer 1

Accounting guidance for both government and private (college) organization will be as follows:

1. All the expenditure vouchers need to be supported by proper documents,

2. All the vouchers need to be signed by the "preparer", "receiver" and "authorizer".

3. All the vouchers need to record properly,

4. There should be detailed reports of fund received and expenditure made,

5. Recording of expenditures according to it's actual cost heads are very much necessary,

6. There will be cost head wise pre-budget plans to control the expenses,

7. Cash and bank balance and reconciliation need to be checked each and every day, weekly and monthly,

8. For travelling and conveyance there will be distance and staff category wise fixed allowances plan to avoid extra expenses and litigation,

9. Have to maximize the payments to be made through bank as it records individual transactions separately and is easy to trace them,

10. Regular and on time preparation of financial cash flows, fund flows, cash and bank books, receipt and payment statements, expenditure statement is very much necessary to maintain fortnightly, monthly, quarterly and yearly.

Both the bodies should ask for or cross verify the statements as below:

1. Cash and bank book and balances on daily basis,

2. Reconciliation of cash and bank book on weekly basis,

3. Cash and fund flow, receipt and payments and expenditure statements on monthly, quarterly and annually.

4. Also required to peruse an internal audit for verification of vouchers and books of accounts on quarterly basis.

5. Report of fund received on cost head wise and reconciliation on government/head office transfers with report once in every month is also necessary.

6. Attendance register for both students and teachers may also be asked for.

There are not too much differences only but collection of funds and facility for students. Government colleges basically runs by government funds and private one by collection from students and donations. Government provides funds for particular purpose wise like, books, picnic, stationaries, staff salaries etc. whereas private colleges need to collect and expense, as there is no limit for expense for private sector, there should be a pre expense budget to control the expenses. No of students and their attendance register for government sector will ensure students participation but in private colleges will ensure the fund flow too. Private colleges need to collect money for each individual programme and its association. Government colleges has no too much look out only but education as the staffs are also being fixed and paid up by government, but for private one it has to mention it's staffing, education standards to maintain student, other activities, low costing. Government colleges actually maintained and monitored by government bodies like education councils etc. where as private colleges are mentioned by governing body of that particular college and funds from the students and donations resulting a higher education fees compared to government one. But to maintain a good, smooth and clear run both should follow the accounting standards mentioned above.