Page 145 - Haltom City FY20 Approved Budget

City of Haltom City Annual Budget, FY 2020
Supplemental Information

CITY OF HALTOM CITY
ACCOUNTING SYSTEM AND BUDGETARY CONTROL

Haltom City’s accounting and financial reporting system follows the principles established
by the Governmental Accounting Standards Board. An annual audit of the City’s system
is performed by an independent public accounting firm with the subsequent issuance of
a comprehensive annual financial report.

The accounts of the City are organized on the basis of funds or accounts groups, each of
which is considered to be a separate accounting entity. The operations of each fund are
accounted for with a separate set of self-balancing accounts, which comprise its assets,
liabilities, retained earnings/fund balance, revenues and expenses/expenditures. The
various funds are grouped by type in the financial statements. The City’s accounting
records for the Water and Sewer Fund and the Drainage Fund are maintained on an
accrual basis whereby revenues and expenses are recorded in the accounting period in
which they are earned or incurred. The remainder of the City’s funds are maintained on
the modified accrual basis whereby revenue is recorded when measurable and available
and expenditures are recorded when the liability is incurred except for interest on general
long-term debt.

One of the objectives of the City’s financial accounting system is to provide internal
controls. Internal controls are designed to provide reasonable, but not absolute,
assurance regarding the safeguarding of assets against loss from unauthorized use or
disposition and the reliability of financial records for preparing financial statements and
maintaining accountability for assets. The concept of reasonable assurance recognizes
that the cost of a control should not exceed the benefits likely to be derived and the
evaluation of costs and benefits requires estimates and judgment by management.

Budgetary Control is accomplished by the adoption of an annual operating budget for
various funds of the City. Detail control is accomplished by maintaining appropriations
and expended balances by line item account within each operating department within
each budgeted fund. Purchase orders or payments that would result in an over
expenditure of a line item account are not processed without the approval of the Finance
Director or the City Manager.

BASIS OF BUDGETING

The financial data throughout this document, for all funds, is presented by using a cash
basis of budgeting. This means that expenditures and revenues are measured and
forecasted on an inflow, outflow basis for the 12 months that comprise the budget year.
Capital outlay and debt service are included in the Water and Sewer Fund budget as a

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