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

F und Ac c ounting for T ownships Presented by: Christopher S. M c Kee LGS Assistant Project Manager Justin W. Sloan LGS Project Manager Cour se Catalog • Pa rt o f a thre e -c o urse se ssio n 1. F und Ac c ounting for T ownships 2. Cha rt o f Ac c o unts fo r T o wnships 3. Ba sic Ac c o unting fo r T o wnships 2 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? 3 1

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. 4 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. 5 WHAT ?!!!! 6 2

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 o ta l c o lumns fo r re c e ipts, disb urse me nts, a nd fund b a la nc e s 7 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 o f the Ohio T o wnship Ha ndb o o k ha s a list a nd de finitio ns o f fund type s. 8 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 9 3

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 10 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 11 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 o 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 o f the Ohio T o wnship Ha ndb o o k 12 4

Capital Pr oje 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) 13 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 o 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. 14 Pr opr ie tar y F unds • E nte rprise F unds • I nte rna l Se rvic e F unds 15 5

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. 16 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 o 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. 17 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 o r dire c t fina nc ia l invo lve me nt 18 6

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 19 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. 20 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 . 21 7

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. 22 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 o 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. 23 Name T hat F und T ype !!! 24 8

How to Cr e ate a Ne w F und • L o 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 . 25 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 o 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 26 AOS Appr oval • 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 o 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 o 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 27 9

Local Government Services 88 E. Broad St. Columbus, Ohio 43215 Christopher S. M c Kee 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 10