Governmental Funds (GRaSPP)
Accounting for Activities Related to Serving the Public
General Fund: Created at the beginning and accounts for General Activities that are
NOT accounted for in any other fund.
Revenue Sources: Taxes (property taxes), Public Safety & Regulations (fines),
Intergovernmental (shared revenues), Charges for services, other revenues (interest
income).
Special Revenue Fund: Revenues & Expenditures that are legally restricted for specific
purposes other than debt service or capital projects.
Revenue Sources: Designated sales tax, Designated gas tax, Designated special
fees, Designated admission fees, Designated parking fees, Designated state grants,
Designated Federal grants.
And:
Debt Service Fund: Accounts for the accumulation of restricted, committed, or assigned
resources (cash & investments) for the payment of currently due interest & principal on
Long-Term general obligation debt .
Revenue Sources: Allocated portions of property taxes
Other Financing Sources: Debt proceeds associated with refunding debt,
transfers from other funds.
Capital Projects Fund: Purchasing Department , to account for resources restricted,
committed, or assigned for the construction, purchase, or leasing of significant fixed
assets used by the Governmental (GRaSPP) fund.
Revenue Sources: Investment earnings, tax revenues specifically levied to fund
capital improvement, capital grants, special assessments.
Other Financing Sources: Bond issue proceeds, general fund (or special revenue
fund) interfund transfers.
Permanent Fund: Used to report resources that are legally restricted to the extent that
Only earnings & NOT principal may be used for the purposes that support the reporting
governments programs. (That’s for the Benefit of the Public). Ex: A Public Cemetery
Perpetual care fund.
Revenue Sources: May include investment earnings from the trust.
Proprietary Funds (SE)
Accounting for Business Type Activities
Internal Service Fund: Established to Finance & account for services & supplies
provided exclusively to other departments within a governmental unit or to other
governmental units, typically on a cost-reimbursement basis. Ex: Central Janitorial
departments, central repair shops, central purchasing & storage departments.
Revenue Sources: Restricted grant revenues (recognized in year $ spent),
Operating revenues from billings for services provided (recognized when earned), nonoperating revenues (e.g., interest earnings).
Enterprise Fund: Customer NOT Citizen. They account for the acquisition & operating
of governmental facilities & services that are intended to be primarily (More than 50%)
Self-supported by user charges. Ex: Utilities (water & electric companies), Hospitals,
Universities. All these are for the Public.
Enterprise Funds are Required when any one of 3 criteria is met:
1. The activity of the fund is financed by debt secured by a pledge at fee revenue.
2. Laws require collection fees adequate to recover costs; or
3. Pricing policies are established to produce fees to recover costs.
Operating Revenue Sources: Charges for services (utility fees, patient fees,
tuition, etc.).
Non-Operating Revenue Sources: Shared/grant revenues (gasolines or sales tax
collected by one government). Ex: The state, and shared to another local government,
Investment income.
Fiduciary Funds (CIPPOE)
Accounting for Financial resources held for others as trustee
Custodial: Generally, collects cash to be held temporarily for an authorized recipient to
whom it will be later disbursed. Ex: Tax collection funds, Clearance funds (Food stamps,
traffic citations, child support, other court ordered payments), Special assessments. If a
governmental unit has monitoring or similar administrative involvement, the special
revenue fund is used.
Investment Trust Fund: Accounts for external investment pools sponsored by a
governmental entity. Ex: A state may act as the investment agent for Counties & Cities.
The investments “external” to state government, those administered on behalf of the
Counties & Cities, are reported in an Investment Trust Fund.
Private Purpose Trust Fund: Is the designated fund for reporting all other trust
arrangements under which principal & income are for the benefit of one of the following:
specific individuals, private organizations, & other governments.
Pension & Other Employee Benefits Trust Fund: Account for government sponsored
defined benefit & defined contribution plans & other employee benefits such as postretirement health care benefits.
*KNOW THE STATEMENTS FOR EACH LISTED ABOVE. SUCH AS PROPRIETARY
FUNDS ARE THE ONLY FUNDS THAT REQUIRE A STATEMENT OF CASH FLOW*
EX: Which of the following is a required “FS” for an investment trust fund? ANSWER:
Statement of changes in fiduciary net position