Page 43 - Mansfieldr FY20 Approved Budget

BASIS OF BUDGETING AND ACCOUNTING IN SUMMARY

The City of Mansfield’s “Basis of Budgeting” for all funds is based upon a modified accrual basis of
accounting. The modified accrual basis is a combination of cash and accrual accounting in that
expenditures are immediately incurred as a liability while revenues are not recorded until actually
received or are measurable and available for expenditure.

The operating budget is developed by fund utilizing Generally Accepted Accounting Principles (GAAP)
except that depreciation and amortization are not budgeted. A complete description is provided below.

BALANCED BUDGET POLICY

The City of Mansfield has adopted a balanced budget for all funds. Current appropriations in all funds are
limited to the sum available, unencumbered cash balances and revenues estimated to be received in the
current budget period. Expenditure and subsidy appropriations for mandated and priority programs are to
be made against current revenue sources and not dependent upon uncertain reserves or fluctuating prior
period fund balances. To the extent possible, current operations will be funded by current revenues. The
use of unencumbered prior period balances in all funds shall be scrutinized and carefully limited and
subject to review by the City Manager and City Council.
Fund Organization

The accounts of the City are organized on the basis of funds, 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. Governmental resources are allocated to and accounted for in individual funds based upon the
purpose for which they are to be spent and the means by which spending activities are controlled.

GOVERNMENTAL FUND TYPES:

General Fund

The General Fund is the operating fund of the City. All general tax revenues and other receipts that are
not restricted by law or contractual agreement to some other fund are accounted for in this fund. General
operating expenditures, the fixed charges, and the capital improvement costs that are not paid through
other funds are paid from the General Fund.

Special Revenues Funds

The Special Revenue Funds are used to account for the proceeds of specific revenue resources (other than
major capital projects) that are legally restricted to expenditures for specified purposes. These funds
include Hotel/Motel Tax, Mansfield Park Facilities Development Corporation (MPFDC), and Mansfield
Economic Development Corporation (MEDC).

Debt Service Funds

The Debt Service Funds include the General Debt Service Fund, Water & Sewer, Drainage and
Environmental Services, MPFDC and MEDC. These funds are used to account for the accumulation of
resources for and the payment of principal and interest on general long-term debt and revenue bond debt.
The primary sources of revenues are ad valorem taxes which are levied by the City for the General Debt

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