Page 20 - Town of Bedford FY 2018-2019 Budget.pdf

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accounting with cash-basis accounting. Under this method revenues are recognized in the period they
become available and measurable and expenditures are recognized in the period the associated liability
(expense) is incurred. This is also called modified cash basis accounting. The Town’s enterprise funds are
reported on the full accrual basis, under which revenues are recorded when earned and expenses are
recorded when incurred.

FUND ACCOUNTING

The accounts of the Town are organized on the basis of funds and accounts groups, each of which is
considered a separate accounting entity. Fund accounting is designed to demonstrate legal compliance
and to aid financial management by segregating transactions related to certain government functions or
activities. The operations of each fund are accounted for with separate set of self-balancing accounts
that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate.
All of the funds of the Town can be divided into two categories: governmental funds and proprietary
funds.
¾ Governmental Fund – The focus of the Town’s governmental funds is to provide information on
near-term revenues, expenditures, and balances of spendable resources. This fund is a grouping
used in accounting for tax-supported activities and services. It emphasizes accountability rather
than profitability.
¾ Enterprise Funds – Enterprise funds are used to report the same functions presented as
business-type activities in the government-wide financial statements. These funds provide
goods or services to the public for a fee that makes the entity self-supporting. The Town uses
enterprise funds to account for its solid waste and electric operations.

The reporting structure of the Town’s Financial Management System is set up by the following
categories:
¾ Fund: An independent fiscal and accounting entity used to record all financial transactions
related to the specific purpose for which the fund was created.
¾ Department (Org): A division of the entire local government dealing with a specific subject,
commodity, or area of activity.
¾ Object Code: Six-digit numbers that are used to categorize actual expenses, budgeted amounts
for expenses, and encumbrances, into categories that describe the nature of the goods or
services purchased.

The Town’s Financial Management System has the following primary fund categories:
¾ General Fund = 10
¾ Solid Waste Fund = 17
¾ Electric Fund = 19
¾ General Capital Improvement Fund = 50
¾ Solid Waste Capital Improvement Fund = 57
¾ Electric Capital Improvement Fund = 59

GENERAL FUND (10) STRUCTURE
Revenue 100011- Police 10033110 P.W. –Maintenance of 10044350
100091 Motor Vehicles

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