Governmental Handout II – Summary of Funds & Fund-Based Statements
· Differences in types of fin’l statements for different funds - distinction between accrual and modified accrual helps with fund-based fin’l statements needed
Stat. of
Statement Fiduc.
of Net
Statement of Revenues, Position#
Revenues, Expenses, &
Statement of Expenditures, & Changes Stat. of
Revenues, & Changes in in Stat. Changes
Balance Expenditures, Fund Bal. - Net Position of in Fiduc.
Sheet Bal. & Changes in Budget vs. (or Fund Cash Net
Equation Sheet Fund Bal. Actual Equity) Flows Position
Governmental Funds
General Fund MF MA A+DO- L-DI =FB E X* X** X
Special Revenue Funds MF MA A+DO- L-DI =FB E X* X** X
Capital Projects Funds MF MA A+DO- L-DI =FB E X* X** (1)
Debt Service Funds MF MA A+DO- L-DI =FB X* X** (1)
Permanent Funds MF MA A+DO- L-DI =FB (1)
Fiduciary Funds
Agency Funds FT A A= L #only
Trust Funds
Private Purpose FT A A+DO-L-DI = D&F X
Net Position
Pension Trusts FT A “ D&F X
Investment Trusts FT A “ NA X
Proprietary Funds
Internal Service Exempt A “ D&F X X X
Funds***
Enterprise Funds**** MF A “ D&F X X X
(1) depends on whether govt unit has a legally adopted budget for this fund
E = Encumbrance accounting used; D&F = have long-term liabilities on balance sheet & fixed assets which are depreciated are on balance sheet
*Reconciliation of fund balances of governmental funds to Net Position of governmental activities on govt-wide statement is required with fund-based
statement
**Reconciliation of net changes in fund balances to changed in Net Position for governmental activities is required with fund-based statement
***Are included in the governmental activities category on the govt-wide Statement of Net Position
****No reconciling items to “Business-Type Activities” on govt-wide statements since accrual basis used on fund-based statements
MF: Fund-based statements reported by MAJOR FUND
FT: Fund-based statements reported by FUND TYPE
DO = Deferred Outflows; DI = Deferred Inflows
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ACC 308 - Governmental Accounting
Note: see front for updated balance sheet equation
Fund Type Description Revenue & Other Sources Expenditures/Expense
GOVERNMENTAL MA
General MA leftovers Revenue Expenditures – recognized when
measurable & available a liability exists
A + DO - L - DI = Other Financing Sources
fund bal. Proceeds from bond issue Other Fin Use:
Proceeds from sale of fixed Oper Trans Out
Asset/capital leases
Oper. Tran. In
Special Revenue MA for revenue from specific sources · NOT from specific charges to activities A/C'd for:
(other than cap. projects & users off-street parking, transportation
A - L = fund bal. expendable trusts ) legally · opposite of most Enterprise system, turnpikes, golf courses,
restricted to expenditure for Funds swimming pools, libraries,
specific purposes auditoriums
· revenue sources: specified
property tax levies, state gas tax,
licenses, grants, shared taxes
from other govt. funds
Capital Projects MA · receive cash from bond issues · proceeds from bond issuances = · encumbrance acctg used, so not
· use cash to construct major Other Financing Source required to record budget amts.
A - L = fund bal. capital facilities other than those · transfer premium from bond · expenditures = $ spent to
financed by proprietary & trust issue to Debt Svce construct fixed assets
funds (admin. bldg., library, · also have operating transfers
auditorium, civic center) from Gen. or Spec. Rev. funds
· NOT for fixed assets w/limited · funding also from federal and
life: vehicles, machinery, office state grants
equipment (in Gen. or Spec. · may be revenue due to interest
Rev. Fund as expenditures) or dividends earned on investing
· ONLY for constructed fixed excess cash (some int. inc. can
assets, NOT those acquired be spent on project & some
· EXCLUDE acctg. for debt pymt transfer $ to Debt Svce.
which is done in Debt Svce depending on legal
· INCLUDES construction related requirements)
to special assessments
· each Cap. Project fund
terminated when project done
· cash left when project done
usually go to Debt Svce Fund
Fund Type Description Revenue & Other Sources Expenditures/Expense
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Special Assessment: government must account for these in existing funds
1. borrow $ (treat like any other bond issue
2. use borrowed $ to pay for improvements (eg.: street lighting, sidewalks, residential streets, sewers)
3. assess & collect $ from citizens benefiting from improvement
4. collected $ are used to pay off debt
ONLY current special assessments collected can be treated as Revenue; the rest are deferred revenue until collected
NOT REPORTED ON GOVT-WIDE STATEMENTS
Fund Type Description Revenue & Other Sources Expenditures/Expense
FIDUCIARY FUNDS
Agency Funds · purely custodial NA NA
· funds usually disbursed within a short
A = L period to authorized agents
· common examples: tax collection
funds, employee benefit funds
· also used for collections for special
assessments where govt unit is not
obligated at all to pay off related debt
Trust Fund - invest & use $ in accordance with
agreement/statutes
Private Purpose A · account for all trusts not reported as Since investments valued at Expenses:
pension or investment trusts where fair value, unrealized = amt. incurred per fund's purpose
A + DO – L - DI = the principal & interest benefit 3 rd gains & losses recognized
Net Position parties (individuals, private on operating statement
organizations, or other governments) Interest
· key factor = absence of PUBLIC Dividends
purpose
Pension Trusts A account for employer & employee
retirement contributions, investment of
A + DO – L - DI = contributions, & payments to retired
Net Position employees
Investment Trusts A used when governments manage
investment pools on behalf of other
A + DO – L - DI = governments or hold investment(s) on
Net Position behalf of other governments
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Fund Type Description Revenue & Other Sources Expenditures/Expense
PROPRIETARY
FUNDS
Internal Service A · provides service to depts. within govt. operating revenue = billings Operating Expenses include
unit or to related govt unit to user departments depreciation
A + DO – L - DI = · objective: to recover total cost of (called Due from___
Net Position operation by billing user depts Fund)
(recover cost or only small profit)
· Net POSITION categories: Transfers In – usually from
Invested in capital assets, net of GF to establish fund
related debt (=asset – deprec. –
liability balance owed for asset)
Restricted for debt service
Unrestricted
· income or loss must be eliminated to
produce govt-wide statements
Enterprise A A/C for operations: revenues = user charges · expenses = costs of providing
1. financed/operated in manner similar goods/services
A + DO – L - DI = to private business (intent = recover Ways to start fund: · expenses include depreciation
Net Position cost thru user charges) Transfer from GF · payments to Gen. Fund in lieu of
2. where periodic computation of NI is Loan from GF taxes = expense in Enter. Fund
appropriate for capital maint., public Issue revenue bonds
policy, mgmt control, accountability Issue general oblig bonds:
Objective: raise revenues to recover - if repayable from
costs to break even OR generate earnings of
profit so adequate capital is raised to enterprise, only
finance expansion of operations account for in
· most common activity = utility: Enterprise fund
water, electric, natural gas - if repayable from
· other activities: parking facility, taxes & gen’l
recreational facility (golf course, pool), revenues, use
airports, hospital, public transit GCA-GLTL G/L &
systems not record liability
in Enterprise
Fund
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Some of the Entries in the Govt-Wide G/L:
Entries in Governmental Fund: (MA) For the Accrual Basis Govt Wide
Statements
ON AN ACCRUAL BASIS OF ACCTG
When a bond is issued in a governmental fund:
Cash X Cash X
Other Fin. Sources – Bond Proceeds X Bonds Payable (face value only) X
Other Fin. Uses – Oper. Transfer Out X
Cash X
To transfer premium to Debt Service Fund
When int is paid (Debt Svce Fund): (same for prin pymt) In addition to int paid, to accrue interest:
Expenditures (int exp NOT ACCRUED) X Interest Expense X
Vouchers Payable/Cash (int paid same day as X Interest Payable/Cash X
payable)
When bond issued by a governmental fund matures:
Expenditures (for principle and interest) X Bonds Payable (principle only) Face Amt
Vouchers Payable (in Debt Svce Fund) X Cash Fac
e
Amt
Interest Expense X
Vouchers Payable X Cash X
Cash (in Debt Service Fund) X
When expenditures are incurred to construct an
asset in a governmental fund: (Capital Projects
Fund)
Expenditures X Construction Work in Progress X
Vouchers Payable/Cash X Vouchers Payable/Cash X
(rename Construction in Progress when
asset is completed)
When expenditures are incurred to acquire a capital
asset in a governmental fund:
Expenditures X Land, Building, or Equipment, etc. X
Cash X Cash X
No depreciation taken Deprec Exp X
When capital asset is sold by a governmental fund: Accum Deprec X
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Cash X Cash Proceeds
Accum. Depreciation Up2 date
bal
Other Fin. Sources – Sale of Capital Assets X Land, Building, Equipment, etc. cost
(proceeds) Loss DR or GAIN CR
*Net Position affected could be one of 3 classifications:
(1) Invested in capital assets net of related debt, (2) Restricted, or (3) Unrestricted
Government-Wide Statement of Net Position: (ACCRUAL BASIS)
Shows assets, deferred outflows, liabilities, deferred inflows and Net Position for the following:
Governmental Activities (which includes Governmental Funds converted to accrual + Internal Service
Funds)
Business-Type Activities (which includes Enterprise Funds)
Total = sum of Governmental & Business-Type Activities
Component Units = legally separate organization, but the primary government’s officials are
accountable financially for them
EXCLUDES FIDUCIARY FUNDS
Government-Wide Statement of Activities: (ACCRUAL BASIS)
Shown for Governmental Activities, Business-Type Activities, Total, & Component units:
Report Program Revenues, Expenses, and Net (Expense) Revenue for each category
Report changes in Net Position for each category
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RECONCILIATIONS MUST APPEAR ON THE FUND-BASED STATEMENTS:
Reconciliation of Net Change in Fund Balances to Net Change in Net Position– Governmental Activities:
Net Change in Fund Balances– Governmental FUNDS: From Stat. of Rev., Expend & Chg in Fund Bal.
(MODIFIED ACCRUAL) THINK OF IMPACT ON REV, EXPENDITURES, OFS, OFU ON MA BASIS
+ Capital Outlays (included in Expenditures – capitalized in govt-wide statements)
- Depreciation not recognized in fund statements but is in govt-wide statements
- *Proceeds from Sale of Capital Asset (to remove proceeds since only gain is in govt-wide statements)
+ *Gain on Sale of Asset (=proceeds – carrying value of asset sold) OR subtract a loss
+ Revenue not reported in Govt Funds (= Deferred Revenue reclassified as revenue)
- Proceeds from bond issue included in fund statements
+ Expenditure Amts. for Payments of principal on long-term liabilities
(no adjustment for interest paid, only the principal, because interest has same impact for MA & accrual)
- Amounts expensed on accrual basis not shown as expenditure in Govt’l funds
+/- Any other Rev/Exp reported on govt.-wide statements not reported on fund-based statements
+ Net income from Internal Service Fund (not included in governmental funds statements) OR
- Net expense from Internal Service Fund (not included in governmental funds statements)
Change in Net Position– Governmental Activities shown on Govt-Wide Statements (ACCRUAL)
*-Proceeds + Gain = -Carrying Value of asset sold (so you could just deduct carrying value rather than
deducting the proceeds and then adding back the gain)
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Governmental Fund – Balance Sheet Reconciliation: ASSETS + DO – LIAB – DI = FUND BAL
FUND BALANCE (ON GOVT’L FUND-BASED STAT) x MOD ACCRUAL
+ CAPITAL ASSETS x
- LT LIABILITIES (X)
+ INTERNAL SERVICE FUNDS NET POSITION (already accrual) X
“GOVT’L ACTIVITIES” NET POSITION (ON GOVT-WIDE STAT) x ACCRUAL
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MA:
TAXES REC 100
Allow for Uncoll 5
Deferred Rev 95
Def Rev 80
Rev 80
ACCRUAL:
REC 100
REV 100
Bad debt exp 5
Allowance 5
MA:
Paying Interest on bonds
Expenditures X
Cash X
Accrual:
Interest Expense X
Cash X
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