Governmental Funds (F9 M2-M6) Flashcards
Governmental Funds Financial Statements
-Balance Sheet:
Current assets + deferred outflows
= current liabilities + deferred inflows
+ fund balance
-Statement of Revenues, Expenditures, change in fund bal (IS): Revenues -expenditures \+/- other financing sources (uses) = net change in fund balance
Modified accrual
Book
Activity
Encumbrances
Closes to BS which gets rolled over
Types of Governmental funds
General Special Revenue Debt Service Capital Projects Permanent
Sources of Governmental resources (revenue)
- Derived Taxes - Income and sales
- Imposed Taxes - property and real estate
- Fines and penalties
- INTERGOVERNMENTAL (not interfund) transfers (different level of government like state to local)
Sources of Governmental Resources (other financing sources)
- debt proceeds
- interFUND transfers
Budgetary Accounting JE
Beginning of the year*:
Dr. Estimated Revenue Control
Dr. Budgetary control (if negative/deficit)
Cr. Appropriations Control (this is approved spending)
Cr. Budgetary Control (if surplus/positive)
*Revenue which is usually a credit is debited (est revenue control account)
Close at end of year**:
Dr. Appropriations Control
Cr. Estimated Revenue Control
**Reverse SAME dollar amount +/- amendments
Expenditures - Current assets
Two methods. -PURCHASE METHOD Buying item Dr. Expenditure Cr.Vouchers payable
End of year
Dr. Supplies inventory
Cr. Nonspendable fund bal - inventory
-CONSUMPTION METHOD
Buying item
Dr. Supplies inventory
Cr. Vouchers payable
Use of item (when consumed)
Dr. Expenditure
Cr. Supplies Inventory
*must be in balance with nonspendable fund bal at end of year
Encumbrances JE
-purchase order issued
Dr. Encumbrances
Cr. Budgetary Control
-invoice received
Dr. Budgetary Control
Cr. Encumbrances (SAME AMOUNT)
Dr. Expenditures
Cr. Vouchers payable (ACTUAL AMOUNT)
-if outstanding at EOY and appropriations do not lapse
Dr. Budgetary Control
Cr. Encumbrances (SAME AMOUNT)
Dr. Unassigned fund balance
Cr Fund balance, committed (SAME AMOUNT)
Dr. Expenditures - PRIOR YEAR
Cr. Vouchers Payable
Reciprocal interfund activity
- interfund loans: accounted for as interfund recievables/payables
- interfund services provided: accounted for as revenue/expenses and expenditures
Nonreciprocal interfund activity
- interfund transfers: other financing sources and uses
- interfund reimbursements: are not displayed as interfund transactions.
Special items
- under the control of management and are unusual OR infrequent.
ex: sale of certain capital assets, termination benefits, early retirement programs - unlike extraordinary which is unusual AND infrequent
ex: environmental disaster from chemical spill
Categories of Fund balances
Fund balance is the “equity”
categories in order of constraints:
- nonspendable
- restricted
- committed
- assigned
- unassigned
Nonspendable fund balance
current assets that cannot be spent
prepaid expenditures, inventories etc
Restricted fund balance
associated with assets restricted by external authorities
ex: legislation, grantors, creditors
Committed fund balance
Obligated by formal action by highest decision making authority
Assigned fund balance
government intends to obligate but has not formally committed
Unassigned fund balance
spendable.
-only the general fund has positive unassigned fund balance
General Fund
- only one general fund per entity
- always reported as a major fund
- automatically finances other funds by making loans, interfund transfers, making up deficits in enterprise fund
Special Revenue
- revenues and expenditures that are legally restricted/committed for specific purposes other than debt or capital projects.
ex: sales tax fund to operate park, gasoline tax fund to maintain streets, account for specific fees (admission, parking), expendable grant funds which are monitored - encumbrances = commit funds for purchase orders
- Fund balances = nonspendable, restricted, committed, negative unassigned
Debt Service fund
- accumulation of resources and payment of currently due interest/principal on long term obligation debt
- does NOT pay off debt for SE-PAPI funds. GRaSPP only.
- revenue earned from interest
- proceeds from bond issuances/interfund transfers are other financing sources
- NO encumbrances
- fund balances = restricted, committed, assigned, negative unassigned
Capital Projects fund
- construction, purchase, leasing of significant fixed assets
- life is shorted and limited to construction period
- generally funded by bond proceeds used to complete particular project. may also be funded by transfer from other fund, specific tax revenues/capital grants
- special assessments if primarily or potentially liable
- bond premiums are displayed as financing source (other financing source - premium)
- bond discounts are displayed as financing use
- other bond issue costs (underwriting fees) are displayed as debt service expenditures when incurred
-fund balances = restricted, committed, assigned, negative unassigned
Special Assessments
-taxes or fees levied against property owners who will directly benefit from the project
PRIMARILY/POTENTIALLY LIABLE:
- governmental or proprietary fund
- under governmental fund, debt proceeds are classified as “contribution from property owners”
- program revenue on government wide statement
NOT PRIMARILY/POTENTIALLY LIABLE
- agency fund
- excluded from government wide financial statement
Permanent fund
- legally restricted to the extent that only earnings, not principal, may be used.
- revenue = investment earnings
- expenditures = operating purpose of the fund
- NO ENCUMBRANCES
- fund balances = restricted, negative unassigned
