NAC354.867. Costs which may be allocated to enterprise fund.

     1. The costs which may be allocated to an enterprise fund of a local government pursuant to paragraph (c) of subsection 1 of NRS 354.613 must be reasonable costs and include only the amounts remaining after the deduction of any applicable credits. The costs must also be:

     (a) Necessary and reasonable for the proper and efficient administration and performance of the enterprise fund;

     (b) Consistent with policies, regulations and procedures that apply uniformly to the enterprise fund and other activities of the local government;

     (c) Determined in accordance with generally accepted accounting principles; and

     (d) Documented adequately for independent verification.

     2. In determining whether a cost is a reasonable cost for the purposes of subsection 1, consideration must be given to:

     (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the enterprise fund;

     (b) Whether the cost is consistent with sound business practices, the indicia of an arm’s length transaction, and the requirements and restraints imposed by state laws and regulations;

     (c) The market prices for comparable services or property;

     (d) Whether the persons incurring the cost acted with prudence under the circumstances considering their responsibilities to each pertinent governmental unit and its employees, and to the general public; and

     (e) Any significant deviations from the established practices of the local government that may have unjustifiably increased the cost.

     (Added to NAC by Com. on Local Gov’t Finance by R007-12, eff. 12-20-2012)