143C-1-3. Fund types.

(a) Types. - The Controller shall account for State resources through use of the fund types listed in this subsection. The Controller may not establish a fund type that differs from the listed fund types unless the Governmental Accounting Standards Board has approved the use of the different fund type.

The fund types are described as follows, except that where a conflict exists between a description used in this section and the definition of the corresponding fund type issued by the Governmental Accounting Standards Board, it is presumed that the definition issued by the Governmental Accounting Standards Board shall prevail.

Governmental Funds.

(1) Capital Projects Funds. - Accounts for financial resources to be used for the acquisition or construction of major capital facilities other than those financed by proprietary funds or fiduciary funds. Capital outlays financed from general obligation bond proceeds should be accounted for through a capital projects fund.

(2) Debt Service Funds. - Accounts for the accumulation of resources for, and the payment of, general long-term debt principal and interest.

(3) General Fund. - Accounts for all financial resources except those required to be reported in another fund.

(4) Special Revenue Funds. - Accounts for the proceeds of specific revenue sources, other than debt service or for major capital projects, that are legally restricted to expenditure for specified purposes.

(5) Permanent Funds. - Accounts for resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support the reporting government's programs.

Proprietary Funds.

(6) Enterprise Funds. - Accounts for any activity for which a fee is charged to external users for goods or services. Activities are required to be reported as enterprise funds if any one of the following criteria is met. Each of these criteria should be applied in the context of the activity's principal revenue sources.

a. The activity is financed with debt that is secured solely by a pledge of the net revenues from fees and charges of the activity.

b. Laws or regulations require that the activity's costs of providing services, including capital costs, be recovered with fees and charges rather than with taxes or similar revenues.

c. The pricing policies of the activity establish fees and charges designed to recover its costs, including capital costs.

(7) Internal Service Funds. - Accounts for any activity that provides goods or services to other funds, departments, or agencies of the primary government and its component units, or to other governments, on a cost-reimbursement basis. Internal service funds should be used only if the reporting government is the predominant participant in the activity. Otherwise, the activity should be reported as an enterprise fund.

Fiduciary Funds.

(8) Custodial Funds. - Accounts for resources held by the reporting government in a purely custodial capacity. Custodial funds are fiduciary activities that are not required to be reported in investment trust funds, pensions and other employee benefit trust funds, and private-purpose trust funds, as described in this section.

(9) Investment Trust Funds. - Accounts for the external portion of investment pools reported by the sponsoring government.

(10) Pension and Other Employee Benefit Trust Funds. - Accounts for resources that are required to be held in trust for pension plans, other postemployment benefit plans, and other employee benefit plans that meet certain Governmental Accounting Standards Board (GASB) criteria.

(11) Private-Purpose Trust Funds. - Accounts for all other trust arrangements that are not required to be reported in investment trust funds and pension and other employee benefit trust funds.

(b) Designation. - If State resources are designated by law as a fund or an account within a fund and there is a conflict between the legal designation and the appropriate accounting designation of the State resources, then the Controller shall determine the appropriate designation of the State resources based on the intended use and financial treatment of the State resources as set out in the law establishing the fund or account. The Controller shall determine the fund type of all separate funds and account for them accordingly. The Controller shall keep the total number of funds to the minimum number practical.

(c) Notwithstanding subsections (a) and (b) of this section, funds established for The University of North Carolina and its constituent institutions pursuant to the following statutes are exempt from Chapter 143C of the General Statutes and shall be accounted for as provided by those statutes, except that the provisions of Article 8 of Chapter 143C of the General Statutes shall apply to the funds: G.S. 116-35, 116-36, 116-36.1, 116-36.2, 116-36.4, 116-36.5, 116-36.6, 116-44.4, 116-68, 116-220, 116-235. (2006-203, s. 3; 2013-360, s. 6.12(c); 2019-250, s. 5.9(a).)