[HISTORY: Adopted by the City Council of the City of Fairfax 5-8-1990.
Amendments noted where applicable.]
The accounts of the City are organized on the basis of funds and account
groups, each of which is considered a separate accounting entity. The operations
of each fund are accounted for with a separate set of self-balancing accounts
that comprise its assets, liabilities, fund equity, revenues, and expenditures,
or expenses, as appropriate. Government resources are allocated to and accounted
for individual funds based upon the purposes for which they are to be spent
and the means by which spending activities are controlled. The various funds
are grouped in the financial statements into two generic fund types and three
fund categories as follows:
A.
Governmental funds.
(1)
General Fund. The General Fund is the general operating
fund of the City. It is used to account for all financial resources except
those required to be accounted for in another fund.
(2)
Special revenue funds. Special revenue funds are used
to account for the proceeds of specific revenue sources that are restricted
to expenditures for specified purposes.
B.
Proprietary funds.
(1)
Enterprise funds. Enterprise funds are used to account
for operations (a) that are financed and operated in a manner similar to private
business enterprises where the intent of the governing body is that the costs
(expenses, including depreciation) of providing goods or services to the general
public on a continuing basis be financed or recovered primarily through user
charges; or (b) where the governing body has decided that periodic determination
of revenues earned, expenses incurred and/or net income is appropriate for
capital maintenance, public policy, management control, accountability, or
other purposes.
A.
The City follows these procedures in establishing the
budgetary data reflected in the financial statements:
(1)
The City Clerk-Treasurer submits to the City Council
a proposed operating budget for the fiscal year commencing the following January
1. The operation budget includes proposed expenditures and the means of financing
them.
(2)
The budget is legally enacted through passage of a resolution.
(3)
The City Council may authorize transfer of budgeted amounts
between departments within any fund.
(4)
Formal budgetary integration is employed as a management
control device during the year for the General Fund.
(5)
The budget for the General Fund is adopted on a basis
consistent with generally accepted accounting principles (GAAP).
(6)
Budgetary control is maintained at the object of expenditure
category level within each activity. Also inherent in this controlling function
is the management philosophy that the existence of a particular item or appropriation
in the approved budget does not automatically mean that it will be spent.
The budget process has flexibility in that where need has been properly demonstrated,
an adjustment can be made within the department budget by the City Clerk-Treasurer,
or between departments by the City Council. Therefore, there is a constant
review process and expenditures are not approved until it has been determined
that: (1) adequate funds were appropriated; (2) the expenditure is still necessary;
and (3) funds are available.
B.
Budget amounts are as originally adopted, or as amended
by the City Council. Budgeted expenditure appropriations lapse at year end.
A.
Governmental funds are accounted for using the modified
accrual basis of accounting. The revenues are recognized when they become
measurable and available.
B.
Expenditures are generally recognized under the modified
accrual basis of accounting when the related fund liability is incurred.
C.
Proprietary funds are accounted for using the accrual
basis of accounting. Revenues are recognized when they are earned, and expenses
are recognized when they are incurred.
A.
Cash balances from all funds are combined and invested
to the extent available in allowable securities. Earnings from such investments
are allocated to the respective funds on the basis of applicable cash balance
participation by each fund.
B.
Investments are carried at cost. The market value of
the investments at December 31 is the same as cost.
Inventory is valued at the lower of FIFO cost or market.
Property and equipment in general fixed assets are stated at values
found in insurance records. Generally accepted accounting principles require
that such assets be recorded at historical value. Records of some historical
costs on fixed assets have not been located. Proprietary fund fixed assets
are stated at cost. Major repairs or improvements are capitalized. Assets
sold, retired, or otherwise disposed of are removed from the asset and accumulated
depreciation accounts and any gain or loss thereon is reflected on operations.
Depreciation is computed on the straight basis at the following rates:
|
Years
| |
|---|---|
|
Buildings
|
33.3 to 40
|
|
Equipment
|
10 to 22
|
