Download
proprietary fund operations n.
Skip this Video
Loading SlideShow in 5 Seconds..
Proprietary Fund Operations PowerPoint Presentation
Download Presentation
Proprietary Fund Operations

Proprietary Fund Operations

283 Views Download Presentation
Download Presentation

Proprietary Fund Operations

- - - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

  1. Proprietary Fund Operations • For activities similar to profit-seeking businesses • Provides goods and services on a fee or user charge basis • Should be self-supporting • Accrual basis and Economic Resources • Fixed assets, depreciation, and long-term debt are recorded in each proprietary fund

  2. Financial Statements • Statement of Net Assets (Balance Sheet) • Working capital approach (Current/Non-current) • Net Assets: Capital, restricted, and unrestricted • Statement of Revenue, Expenses and Changes in Net Assets • Distinct operating income (Loss) section • Non-operating income section (interest expense) • Transfers-in, transfers-out, and capital contributions section

  3. Statement of Cash Flows • Four sections instead of normal three • Operating, non-capital financing, capital and related financing, and investing • Must use ‘direct’ approach • Must include reconciliation section from operating income (loss) to cash flow from operating activities

  4. Internal Service Provides services to one or more internal departments of the same government entity Used when services can be performed more efficiently and/or more timely Enterprise Funds Provides services to other parties, both intergovernmental and outside government for a fee Known as business-type services provided by the government entity Proprietary Funds

  5. Internal Service Funds • Provides goods or services to other intergovernmental funds on a cost-reimbursement basis • Examples include computer services, print services, and motor pool • Revenue accounts: charges for services, etc. • Expense accounts: similar to for-profits • Transfers-in (out) and capital contributions are not revenue

  6. Internal Service Funds, Concluded • Risk management activities • Self-insurance programs may use either the general fund or an internal service fund • Inter-fund premiums are inter-fund services provided or used in internal service funds • When claims are paid or accrued, an operating expense is charged if in an internal service fund • Deficits in internal service fund at end of year should be made up over a reasonable time and disclosed in notes to financial statements

  7. Enterprise Funds • Used to account for governmental units that provide services to the general public on a user-fee basis (Water departments) • Must be established when one of following is true • Debt is backed solely by fees and charges • Legal requirement costs be covered through fees and charges • When the government has a policy to establish fees and charges to cover the cost of providing services

  8. Classes of Long-Term Debt • Revenue Bonds • Payable solely from revenue earned by the enterprise • Recorded directly in the accounts of the enterprise fund • General Obligation Bonds • Issued by pledging full faith and credit of the government in addition to the enterprise fund • If payment to be made from enterprise fund, these liabilities should also be recorded in enterprise fund

  9. Solid Waste Fund Notes • Post-Closure Costs • Liability must be estimated and accrued as landfill is in actual use • Estimated costs include liners, monitoring wells, periodic inspections, engineering fees for 30 years after closure • Estimated costs are expensed and the related long-term debt is recorded based on actual use in each period.