1 What is F und Ac c ounting? F und a c c o unting is the a c - - PDF document

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Presented by: Christopher S. McKee LGS Assistant Project Manager Justin W. Sloan LGS Project Manager

F und Ac c ounting for T

• wnships

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Cour se Catalog

• Pa rt o f a thre e -c o urse se ssio n
• 1. F

und Ac c ounting for T

• wnships
• 2. Cha rt o f Ac c o unts fo r T
• wnships
• 3. Ba sic Ac c o unting fo r T
• wnships

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Cour se Obje c tive s

• Answe r the fo llo wing q ue stio ns:
• Wha t is F

und Ac c o unting

• Ho w do e s F

und Ac c o unting wo rk?

• Wha t kinds o f F

unds a re the re ?

• Ho w do yo u c re a te a ne w F

und?

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What is F und Ac c ounting?

• F

und a c c o unting is the a c tivity o f a na lyzing , re c o rding , summa rizing , re po rting , a nd inte rpre ting the fina nc ia l tra nsa c tio ns o f g o ve rnme nts.

• T

his is a c c o mplishe d thro ug h the use o f F unds.

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Okay, So What’s a F und?

• A F

und is a fisc a l a nd a c c o unting e ntity with a se lf-b ala nc ing se t o f a c c o unts re c o rding c a sh a nd o the r fina nc ia l re so urc e s, to g e the r with a ll re la te d lia b ilitie s a nd b a la nc e s, whic h a re se g re g a te d fo r the purpo se s o f c a rrying re stric tio ns, o r limita tio ns.

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WHAT ?!!!!

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How doe s F und Ac c ounting wor k?

• A pro pe r c a shb o o k is e sse ntia l
• Se pa ra te c o lumns fo r re c e ipts, disb urse me nts,

a nd F und b a la nc e s fo r e a c h fund

• T
• ta l c o lumns fo r re c e ipts, disb urse me nts, a nd

fund b a la nc e s

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What kinds of F unds ar e the r e ?

• Go ve rnme nta l F

unds

• Pro prie ta ry F

unds

• F

iduc ia ry F unds

• Appe ndix I

I

• f the Ohio T
• wnship Ha ndb o o k ha s a list a nd

de finitio ns o f fund type s.

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Gove r nme ntal F unds

• Ge ne ra l F

und

• Spe c ia l Re ve nue F

unds

• De b t Se rvic e F

unds

• Ca pita l Pro je c t F

unds

• Pe rma ne nt F

unds

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Ge ne r al F und

• T

he o pe ra ting fund o f the g o ve rnme nt, use d to a c c o unt fo r a ll fina nc ia l re so urc e s e xc e pt tho se re q uire d to b e a c c o unte d fo r in a no the r fund. T he g e ne ra l fund b a la nc e is a va ila ble to the g o ve rnme nt fo r a ny purpo se pro vide d it is disb urse d o r tra nsfe rre d in a c c o rda nc e with Ohio la w

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Spe c ial R e ve nue F unds

• Use d to a c c o unt fo r the pro c e e ds o f spe c ific

re ve nue so urc e s (o the r tha n e xpe nda b le trusts o r tho se fo r ma jo r c a pita l pro je c ts) tha t a re le g a lly re stric te d to disb urse me nts fo r spe c ifie d purpo se s

• T

rust funds tha t a llo w the ho lde r to spe nd the princ ipa l a nd inte re st e a rne d o n the princ ipa l a re c la ssifie d a s a spe c ia l re ve nue fund

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De bt Se r vic e F unds

• Use d to a c c o unt fo r the a c c umula tio n o f

re so urc e s fo r, a nd the pa yme nt o f, g e ne ra l lo ng -te rm a nd sho rt-te rm de b t princ ipa l a nd inte re st

• F
• r furthe r re fe re nc e a nd e xa mple s o f De b t Se rvic e F

unds, se e Appe ndix I I

• f the Ohio T
• wnship Ha ndb o o k

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Capital Pr

• je c t F

unds

• Use d to a c c o unt fo r fina nc ia l re so urc e s

use d fo r the a c q uisitio n o r c o nstruc tio n o f ma jo r c a pita l fa c ilitie s (o the r tha t tho se fina nc e d b y pro prie ta ry funds)

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Pe r mane nt F unds

• Use d to a c c o unt fo r the fina nc ia l re so urc e s

tha t a re le g ally re stric te d to the e xte nt tha t

• nly e a rning s, a nd no t princ ipa l, ma y b e

use d fo r purpo se s tha t b e ne fit the g o ve rnme nt o r its c itize ns.

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Pr

• pr

ie tar y F unds

• E

nte rprise F unds

• I

nte rna l Se rvic e F unds

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E nte r pr ise F unds

• E

nte rprise funds ma y b e use d to a c c o unt fo r a ny a c tivity fo r whic h a fe e is c ha rg e d to e xte rna l use rs fo r g o o ds o r se rvic e s.

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Inte r nal Se r vic e F unds

• Ac c o unt fo r the fina nc ing o f g o o ds o r

se rvic e s pro vide d b y o ne de pa rtme nt o r a g e nc y to o the r de pa rtme nts o r a g e nc ie s

• f the g o ve rnme nta l unit, o r to o the r

g o ve rnme nta l units, o n a c o st- re imb urse me nt b a sis.

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F iduc iar y F unds

• Use d to re po rt a sse ts he ld in a truste e o r

c usto dia l c a pa c ity fo r o the rs a nd c a nno t b e use d to suppo rt the g o ve rnme nt’ s o wn pro g ra ms.

• T

he a sse ts a sso c iate d with the a c tivity a re NOT de rive d fro m e ithe r:

1. So le ly fro m the to wnship’ s o wn so urc e re ve nue s, o r 2. F ro m g o ve rnme nt-ma nda te d no ne xc ha ng e tra nsa c tio ns o r vo lunta ry no ne xc ha ng e tra nsa c tio ns, with the e xc e ptio n o f pa ss-thro ug h g ra nts, fo r whic h the g o ve rnme nt do e s no t ha ve a dministra tive invo lve me nt

• r dire c t fina nc ia l invo lve me nt

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F iduc iar y F unds

• E

xa mple s o f F iduc ia ry F unds inc lude :

• Pe nsio n (a nd Othe r E

mplo ye e Be ne fit) T rust

• I

nve stme nt T rust

• Priva te Purpo se T

rust

• Custo dia l

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Pe nsion (and Othe r E mploye e Be ne fit) T r usts

• Use d to re po rt re so urc e s tha t a re re q uire d

to b e he ld in trust fo r the me mb e rs a nd b e ne fic ia rie s o f de fine d b e ne fit pe nsio n pla ns, de fine d c o ntrib utio ns pla ns, o the r po ste mplo yme nt b e ne fit pla ns, o r o the r e mplo ye e b e ne fit pla ns.

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Inve stme nt T r usts

• Ac c o unts fo r the fina nc ia l re so urc e s o f a n

e xte rna l inve stme nt po o l tha t the g o ve rnme nt spo nso rs.

• Ve ry Ra re .

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Pr ivate Pur pose T r usts

• Use d to re po rt a ll trust a rra ng e me nts, o the r

tha n tho se pro pe rly re po rte d in pe nsio n (a nd o the r e mplo ye e b e ne fit) o r inve stme nt trust funds.

• T

he a sse ts a re (a ) a dministe re d thro ug h a trust in whic h the g o ve rnme nt itse lf is no t a b e ne fic ia ry, (b ) de dic a te d to pro viding b e ne fits to re c ipie nts in a c c o rda nc e with the b e ne fit te rms, a nd (c ) le g a lly pro te c te d fro m the c re dito rs o f the g o ve rnme nt.

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Custodial F unds

• Ac c o unt fo r fiduc ia ry a c tivitie s tha t a re no t

re q uire d to b e re po rte d in pe nsio n (a nd

• the r e mplo ye e b e ne fit) trust funds,

inve stme nt trust funds, o r priva te -purpo se trust funds.

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Name T hat F und T ype !!!

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How to Cr e ate a Ne w F und

• L
• o k to AOS Bulle tin 99-006 fo r g uida nc e
• I

f it is no t e sta b lishe d b y la w, e ithe r spe c ific a lly, o r in g e ne ra l, pe rmissio n to e sta b lish a ne w fund c o me s fro m the Audito r o f Sta te ’ s Offic e .

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AOS Pe r mission

• Re q uire d unde r the fo llo wing c irc umsta nc e s:
• Whe n ma na g e me nt wa nts to c a pture a dditio na l

fina nc ia l info rma tio n a bo ut a spe c ific re ve nue so urc e o r a c tivity

• Whe n the fund will b e use d to a c c o unt fo r re stric te d g ifts
• r b e q ue sts tha t will no t b e he ld in trust: o r
• Whe n ma na g e me nt wa nts to impo se inte rna l re stric tio ns

no t o the rwise re q uire d b y la w

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AOS Appr

• val
• Whe n the fund will pro vide info rma tio n

tha t c a n’ t b e o b ta ine d with the a dditio n

• f a c c o unts within a fund, o r
• Whe n it is ne c e ssa ry to de mo nstra te

c o mplia nc e with le g al o r c o ntra c tua l re stric tio ns

• T

he fo rm a nd instruc tio ns fo r re q ue sting AOS a ppro va l fo r a ne w fund c a n b e fo und in the Ohio T

• wnship Ha ndb o o k.

T he info rma tio n is a lso a va ila b le a t

https:/ / www.o hio a udito r.g o v/ re so urc e s/ AOSNo tific a tio ns.html

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Local Government Services 88 E. Broad St. Columbus, Ohio 43215 Christopher S. McKee cscmkee@ohioauditor.gov Justin W. Sloan jwsloan@ohioauditor.gov Presenter(s) phone: (800) 345-2519

88 E. Broad St. Columbus, Ohio 43215 Phone: (800) 282-0370 www.OhioAuditor.gov