(a) The financial and business policies and practices of the community colleges shall comply with article 126 of the Education Law, the Code of Standards and Procedures for the Administration and Operation of Community Colleges under the Program of State University of New York prescribed by the State University trustees, and a manual for community college business offices, and such other instructions as may be appropriate and necessary from time to time as prescribed by the Chancellor of State University or designee.

(b) Records and accounts must be maintained in accordance with the national accounting standards for budgeting and financial reporting as prescribed by the State University Board of Trustees, and shall be subject to audit by the State.

(c) The records and accounts of the community college shall be audited annually by an independent certified public accounting firm.

(d) The college operating fund balance is to be reviewed periodically and maintained at a level consistent with sound fiscal management procedures.

(e) To gain the benefit of interest earnings, operating fund cash in excess of current needs is to be held in authorized investments. The chancellor or designee shall determine the classification (offset or revenue in lieu of local sponsor share) interest income in the college operating budget and annual financial report.

(f) Subject to the approval of the college sponsor, the college board of trustees may enter into a contract with a not-for-profit corporation for the purpose of operating food-service, bookstore and/or conducting other appropriate auxiliary service activities. Such contract shall provide that the food and bookstore services be provided at the lowest possible cost to the students consistent with sound business and financial practices. Where a not-for-profit corporation has been established for the purpose of operating food-service, bookstore and/or conducting other appropriate activities, the rights and responsibilities of the corporation shall be included in the contract between the corporation and the college board of trustees.