Page 13 - 2019 Budget Detail.xlsx

CITY OF RICHLAND HILLS, TEXAS
FISCAL YEAR 2018-2019

FINANCIAL STRUCTURE

The following schedule outlines the fund structure for the City of Richland Hills and lists
the organizational unit and department management responsibility. The City, like other
state and local governments, uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements.

A fund is generally defined as a fiscal and accounting entity which has its own self-
balancing set of accounts for recording cash and other financial resources, as well as
any liabilities or residual equities or balances. Funds are further segregated for the
purpose of carrying on specific activities or attaining certain objectives in accordance
with special regulations, restrictions or limitations. All funds of the City can be divided
into two categories: governmental funds and proprietary funds.

GOVERNMENTAL FUNDS: The focus of the City’s governmental funds is to provide
information on near-term inflows, outflows and balances of spendable resources. Such
information is useful in assessing the City’s financing requirements. Governmental
funds, which are not concerned about profitability, rely on a modified accrual basis of
accounting. This involves recognizing revenue when it becomes both available and
measurable, rather than when it is earned.

Expenditures, a term preferred over expenses for modified accrual accounting, are
recognized when the related liability is incurred. The equity accounts in governmental
funds are referred to as “Fund Balance". In particular, Unassigned Fund Balance may
serve as a useful measure of a government’s net resources available for spending at
the end of the fiscal year. Governmental funds in the City of Richland Hills include: (1)
General Fund, (5) Special Revenue Funds, (3) Capital Project Funds and (1) Debt
Service Fund.

General Fund. A General Fund is the primary operating fund of the City. The General
Fund contains control and fiscal accountability for the City’s general service operations
and it is divided into departments or organizational units such as administration, parks,
public safety, public works, etc. The General Fund’s major revenue sources are ad
valorem (property) tax, sales and use tax, fines and forfeitures and franchise fees.

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