(a)  Internal accounting and administrative controls are the methods through which reasonable assurances can be given that measures adopted by public corporations to safeguard assets, check the accuracy and reliability of accounting data, promote operational efficiency, and encourage adherence to prescribed managerial policies are being followed. The elements of a satisfactory system of internal accounting and administrative control, shall include, but are not limited to, the following:

(1)  A plan of organization that provides segregation of duties appropriate for proper safeguarding of public corporation assets.

(2)  A plan that limits access to public corporation assets to authorized personnel who require these assets in the performance of their assigned duties.

(3)  A system of authorization and recordkeeping procedures adequate to provide effective accounting control over assets, liabilities, revenues, and expenditures.

(4)  An established system of practices to be followed in performance of duties and functions in each of the public corporations.

(5)  Personnel of a quality commensurate with their responsibilities.

(6)  An effective system of internal review.

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Terms Used In Rhode Island General Laws 35-20-4

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Public corporation: means any body corporate and politic created or to be created pursuant to statute, including, without limitation, the Rhode Island industrial recreational building authority, the Rhode Island economic development corporation and any subsidiaries thereof, the Rhode Island industrial facilities corporation, the Rhode Island refunding bond authority, the Rhode Island health and educational building authority, the board of governors for higher education, the Rhode Island housing and mortgage finance corporation, the Rhode Island resource recovery corporation, the Rhode Island public transit authority, the Rhode Island student loan authority, the water resources board corporate, the Narragansett Bay water quality management district commission, the Rhode Island health and educational building corporation, the Rhode Island depositors economic protection corporation, the Rhode Island convention center authority, the Rhode Island turnpike and bridge authority, their successors and assigns. See Rhode Island General Laws 35-20-5

(b)  Public corporations shall follow these standards of internal accounting and administrative control in carrying out the requirements of this chapter.

History of Section.
P.L. 1995, ch. 86, § 1.