Page 45 - Mansfieldr FY20 Approved Budget

Governmental Fund Types - All governmental funds are accounted for using the modified accrual basis
of accounting. Under the modified accrual basis, revenues and other financial resource increments are
recognized when they become susceptible to accrual, that is, when they become both "measurable" and
"available" to finance expenditures of the current period. "Measurable" means that amounts can be
reasonably determined within the current period. "Available" means that amounts are collectible within
the current period or soon enough thereafter to be used to pay liabilities of the current period.

Proprietary Fund Types - Revenues and expenses are recognized using the accrual basis of accounting.
Revenues are recognized in the accounting period in which they are earned, and expenses are recognized
in the period incurred following the economic resources measurement focus.

FINANCIAL REPORTING AND POLICIES

Financial and Operational Policies

The City of Mansfield, Texas has developed financial and operational policies which guided the
development of the budget for fiscal year 2019-2020. The budget has been developed using an analysis
of historical data, current data and forecasted data. The staff identified areas of growth and future needs
in each department. The staff put in place policies and procedures which determine the overall budget
including expected population growth, expansion of services, debt service requirements, capital
improvements, operational maintenance requirements, and staffing level requirements. Each department
is evaluated as to current needs and the projected needs in the next budget year and the following nine
years. Availability of funds is considered to determine what areas may need additional funding. A
complete prior year analysis and future analysis is utilized to determine what areas may be increased,
decreased or remain constant for the upcoming year. Individual departments are required to submit
departmental budgets for the upcoming fiscal year. The Business Services Department reviews individual
budgets and creates a priority list for each department based on department and administration
considerations. The budget for each department is reviewed by the City Manager's office to ensure each
department is properly funded. The budget’s operational and financial policies are reviewed throughout
the year.

Financial Reporting Policy

Following the conclusion of the fiscal year, the Business Services Division prepares a Comprehensive
Annual Financial Report (CAFR) in accordance with generally accepted accounting and financial
reporting principles established by the Governmental Accounting Standards Board (GASB) and the SEC.
The CAFR shall also satisfy all criteria of the Government Finance Officers Association’s Certificate of
Achievement for Excellence in Financial Reporting. The City implemented GASB 80 in FY 2016-2017.
Monthly, semiannual and quarterly reports on the City’s finances are reported to City Council.

The CAFR shall show the status of the City’s finances on the basis of General Accepted Accounting
Principles (GAAP). The CAFR shall show fund revenues and expenditures on both a GAAP basis and
budget basis for comparison purposes. In all but two cases, this reporting conforms to the way the City
prepares its budget: compensated absences (accrued but unused sick leave) are not reflected in the budget
but are accounted for in the CAFR’s long-term debt position; and depreciation is not shown in the
budget’s proprietary funds, although the full purchase price of equipment and capital improvements is
reflected as uses of working capital.

Included as part of the Comprehensive Annual Financial Report are the results of the annual audit
prepared by independent Certified Public Accountants designated by City Council. The Business Services
Department shall issue a report monthly to the Council reflecting the City’s financial condition for the

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