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Capital projects funds account for the construction, rehabilitation, and acquisition of capital assets, such as buildings, equipment, and roads.Furthermore, debt transactions associated with proprietary and fiduciary activities are accounted for in those funds. In reality, some resources intended to finance debt service payments can be found in other governmental funds. If a government is accumulating resources for the purpose of making debt service payments, it should report them in a debt service fund. Debt service funds account for the repayment of debt.In practice, governments also use them to report: all of the financial activities associated with a single function (such as road maintenance) classes of revenues (for example, all federal grants) and "rainy day" resources. Special revenue funds are intended to be used to report specific revenue sources that are limited to being used for a particular purpose, such as transportation aid.The general fund is a government's basic operating fund and accounts for everything not accounted for in another fund.There are five types of governmental funds: This is where the bread-and-butter services can be found-police, fire, social services, sanitation, and so on. Governmental funds account for everything else. A prime example is a trust fund for a public employee pension plan. Fiduciary funds contain resources held by a government but belonging to individuals or entities other than the government. Proprietary funds are employed to report on activities financed primarily by revenues generated by the activities themselves, such as a municipal utility. There are three groups of funds for which financial statements are prepared-governmental, proprietary, and fiduciary. Rather, financial information was disaggregated among a multitude of funds-accounting devices that are used to account for and report specific aspects of a government's financial activities, such as a particular revenue source (education or transportation aid, for instance) or function (for example, capital construction, repaying debt, or water and sewer operations). 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments, governments did not report financial information covering their entire reporting entity. Prior to the implementation of GASB Statement No. This article looks at the two required financial statements for the governmental funds-the balance sheet and the statement of revenues, expenditures, and changes in fund balances.
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The first two articles covered the financial statements you would initially encounter upon opening a financial report-the government-wide statement of net assetsĀ and statement of activities.
Back to the future part iii budget series#
This article continues a series begun in the last issue reviewing the basic financial statements and other required components of a state or local government's annual financial report. Touring the Financial Statements, Part III: The Governmental Funds