amen

• Governmental Activities


  • Meet citizens' demand for services, consistent with the availability of resources to provide those services
  • Protection of life and property (e.g., police and fire protection)
  • Public works (e.g., streets and highways, bridges, and public buildings)
  • Parks and recreation facilities and programs, and cultural and social services
  • General administrative support such as data processing, finance, and personnel
• Business-Type Activities


  • Governments also engage in business-type activities
  • Public utilities (e.g., electric, water, gas, and sewer utilities)
  • Transportation systems, toll roads, toll bridges, hospitals, parking garages and lots, liquor stores, golf courses, and swimming pools
  • Many of these activities are intended to be self-supporting by charging users for the service they receive
  • Operating subsidies from general tax revenues are not uncommon, particularly for transportation systems
• Fiduciary Activities

  • Governments often act in a fiduciary capacity, either as an agent or trustee, for parties outside the government
  • Governments may serve as trustee for investments of other governments in the government's investment pool, for escheat properties that revert to the government when there are no legal claimants or hears to a deceased individuals estate, and for assets being held for employee pension plans, among other trustee roles
  • Public-purpose agency and trust activities, those that primarily benefit the general public and the government's own programs, are treated as governmental activities for accounting and financial reporting purposes
• Principles of Governmental Accounting and Financial Reporting

  • Transparency: Provide clear and comprehensive financial information
  • Accountability: Establish clear lines of responsibility for financial management
  • Accrual Basis: Record transactions when they occur, regardless of cash flow timing
  • Consistency: Apply accounting policies consistently over time and across entities
  • Relevance and Reliability: Ensure financial information is useful and trustworthy
  • Comprehensiveness: Present a complete view of financial activities, including assets, liabilities, revenues, and expenses
  • Disclosure: Disclose all relevant financial information, policies, assumptions, and uncertainties
  • Compliance: Adhere to applicable laws, regulations, and accounting standards
• Types of funds and their accounting characteristics

  • Governmental Funds
  • Proprietary Funds
  • Fiduciary Funds
• Governmental Funds


  • To account for nonexpendable resources that must be used to support the government or citizens in general
  • Examples: Museums, zoo, cemeteries, student financial aid, medical research
• Proprietary Funds


  • Common Characteristics
  • Required Financial Statements
• Fiduciary Funds


  • Purpose: Used to account for resources held in trustee capacity for parties other than the government or citizens in general
  • Main categories are Agency and Trust funds
• Agency Funds


  • Purpose: To account for assets held by a governmental unit acting as an agent for one or more other governmental units, individuals, or private organizations
  • Accounting is simple; assets = liabilities
  • No revenue and expense accounts used, nor is there a fund/equity account
  • Not consolidated into government-wide statements
  • Use an agency fund if: Dollar amount of transactions dictate use of agency fund for accountability reasons, Its use will improve financial management or accounting, Mandated by law, regulation, or GASB standards
• Agency Funds


  • Tax agency funds
  • Assessment debt
  • Pass-through agency funds
  • Special assessment accounting when the government is not obligated in any manner for special
• Tax Agency Fund


  • Used to account for all taxes a government is responsible to collect, both its own taxes and taxes for other governments
  • It's used to combine tax levies from multiple governments in same geographic area and avoid duplicating assessment and collection processes
  • Only taxes receivable held for other governments are reported in the TAF's GAAP-based financial statements
  • Governments (e.g. county and city) continue to maintain their own tax records
  • Assessments are turned over to TAF for collection
  • TAF sends out bills to taxpayers
  • Collections are made by TAF
  • Collections distributed to participating governments, less a collection fee that goes to government administering the TA
• Pass-Through Agency Funds


  • Awarded to one organization, which then distributes the funds or passes them through to another organization or individual for the purpose of carrying out a specific project or program
  • These types of grants are commonly used in situations where the grant-making agency wants to provide funding to organizations that are not eligible to receive grants directly, or where the agency wants to support a specific project or program but does not have the staff or expertise to manage it directly
  • Used only if the intermediate ("pass through") government has no administrative involvement or direct financial involvement in the grant
  • The pass-through government must simply be acting as a conduit before an agency fund is used
• Special Assessment Agency Funds

  • To account for special assessments when only the benefited taxpayers, and not the governmental unit, are obligated to pay interest and principal on the special assessment debt
  • The government must not have indicated in any way its intent to be responsible for the debt
  • The government is simply acting as an agent for the benefited property owners, as well as the special assessment bondholders
• Types of Fiduciary Funds

  • Trust Funds
  • Pension Trust Funds
  • Investment Trust Funds
  • Private-purpose Trust Funds
• Pension Trust Funds


  Benefit government employees (retirement, disability)
• Private-purpose Trust Funds


  • An expendable or nonexpendable trust fund in which the allowable amounts can only be expended for the "private-purposes" specified by the donor
  • An escheat property trust fund to account for assets of individuals who die intestate is a common example of a private-purpose trust fund