The fiscal year of the Village shall begin on the first day of May and shall end on the 13th day of April, of each and every year hereafter.
[HISTORY: Adopted by the Board of Trustees of the Village of Morrisonville as indicated in article histories. Amendments noted where applicable.]
[Adopted as Title 3, Ch. 3.04, of the 1980 Code]
[Adopted 10-18-2017 by Ord. No. 860]
The purpose of this policy is to establish guidelines and expectations for the spending of Village money in accordance with the Governmental Accounting Standards Board (GASB) Statement 54 which is effective June 30, 2011.
The Village recognizes the importance of providing a stable financial environment and a high-quality level of service (administration, police protection, street maintenance, cemetery, water and sewer), in a fiscally responsible manner. This spending policy has been designed to appropriately identify and classify the use of the Village's fund balances, as well as appropriately identify and record all revenue streams. This policy is meant to serve as the framework upon which consistent and transparent operations may be built and sustained.
As used in this article, the following terms shall have the meanings indicated:
The assigned fund balance classification refers to amounts that are constrained by the Village's intent to be used for a specific purpose, but are neither restricted nor committed. Intent may be expressed by:
The committed fund balance classification refers to amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the Village's highest level of decision making authority (the Board of Trustees). Those committed amounts cannot be used for any other purpose unless the Village removes or changes the specified use by taking the same type of formal action it employed to previously commit those amounts. The Board of Trustees commits fund balance by making motions or passing resolutions to adopt policy or to approve contracts. Committed fund balance also incorporates contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements. These constraints must be imposed prior to the fiscal year end, but the specific amount may be determined at a later date.
Fund balance is the difference between assets and liabilities in the governmental funds (general and special revenue funds).
The nonspendable fund balance classification includes amounts that cannot be spent because they are either a) not in spendable form or b) legally or contractually required to be maintained intact. The "not in spendable form" criterion includes items that are not expected to be converted to cash, for example inventories and prepaid amounts.
The restricted fund balance classification refers to amounts that are subject to outside restrictions, not controlled by the entity. Things such as restrictions imposed by creditors, grantors, contributors or laws and regulations of other governments, or imposed by law through constitutional provisions or enabling legislation. Special revenue funds are by definition restricted for those specified purposes.
The unassigned fund balance classification is the residual classification for amounts in the general operating funds for amounts that have not been restricted, committed or assigned to specific purposes within those funds. Unassigned amounts are available for any purpose. These are the current resources available for which there are no external or self-imposed limitations or spending plan. Although there is generally no set spending plan for the unassigned portion, there is a need to maintain a certain funding level. Unassigned fund balance is commonly used for emergency expenditures not previously considered. In addition, the resources classified as unassigned can be used to cover expenditures for revenues not yet received.
A.
Beginning June 30, 2011, all nonspendable and spendable fund balances shall be reported as follows:
(1)
At the end of each fiscal year, the Village President will report the portion of the fund balance that is not in spendable form as nonspendable fund balance.
(2)
At the end of each fiscal year, the Village President will report restricted fund balance amounts that have applicable legal restrictions per GASB Statement 54.
(3)
At the end of each fiscal year, the Village President will report committed fund balance amounts that have been committed by self-imposed actions by the Village Board of Trustees.
(4)
At the end of each fiscal year, the Village President will report the portion of fund balance, if any, that is assigned for a specific purpose and a description of the specified purpose as assigned fund balance.
(5)
At the end of each fiscal year, the Village President will report the portion of the fund balance that is unassigned.
B.
The Village of Morrisonville shall, when possible, expend funds beginning with those funds that have the highest level of restriction first, and will spend those funds with the lowest level of restriction last. It shall be the Village President's responsibility to ensure that the Village's expenditures are appropriately classified based on the restrictions (both external and internal) of the revenue and fund balance(s) in accordance with the definitions listed above. Example: In a special revenue fund that has a restricted fund balance or revenue stream, and the requirement for a cash match, the restricted fund balance must be spent first (in accordance with the stipulated requirements) and the cash match of local, unassigned funds must be spent second.