FINANCIAL INFORMATION INFORMATION FINANCIAL MANAGEMENT
OVERVIEW
The Supervisor is the chief executive officer of the Town and is assisted in his fiscal duties by the Director of Finance, who acts as chief fiscal officer officer and is generally generally responsible responsible for the financial management management of the Town. Financial Financial controls extend extend beyond those mandat ed by New York State and Town Law. The Town’s fiscal year is maintained on a calendar basis. The Town Board must adopt the budget for the upcoming year by December 20th. THE ACCOUNTING SYSTEM
The Town, Town, being being a subdiv subdivisio ision n of the State State of New York, York, adhere adheress to financi financial al report reporting ing regulatio regulations ns provid provided ed by the Comptroller's Office. These regulations are developed developed in accordance with generally accepted accounting principles (GAAP). (GAAP). These These princip principles les provid providee the basis basis for accurate accurate and consist consistent ent report reporting ing,, develo developed ped and updated updated by the Gove Governm rnment ental al Accounting Standards Board (GASB) and the Financial Financial Accounting Standards Board (FASB). These boards are professional professional associations associations of accountants accountants and others others who ensure proper, proper, ethical and accurate reporting reporting of finances. finances. In addition to the adherence to the above standards, the Town undergoes an audit each year by an independent accounting firm to ensure the correctness of its financial reporting. Fiscal oversight authority resides within the Town Board only, and no other entity or office of the Town may appropriate funds for use in Town operations. operations. Such authorizations are made annually with the adoption of the Town's Operating Budget. ORGANIZATION OF ACCOUNTS
Governmental resources are allocated to and accounted for in individual funds segregated for the purpose of carrying on specific specific activities or attaining certain objectives objectives in accordance accordance with special regulations, regulations, restrictions restrictions and limitations. limitations. The accounts of the Town are organized on the basis of funds or account groups, each of which is considered a separate accounting entity. entity. These funds and account account groups groups are based upon the requirements requirements of GAAP GAAP for local governme governmental ntal units as prescribed prescribed by GASB as well as the Uniform System of Accounts for Towns. The operation of each fund is accounted for within a separate set of self-balancing accounts that comprises its assets, liabilities, fund equity, revenues and expenditures or expenses. The following description has been adapted from the annual audit report submitted to the Supervisor and Town Board by the accounting firm of Bonadio & Company, LLP. Governmental tal funds are used to finance most functions functions of government. government. The measurement measurement focus of Governmental Funds - Governmen these these funds funds is the determin determinatio ation n of a gover governme nment' nt'ss financia financiall positio position n as well well as changes changes in financi financial al positio position n from from the preceding year. It is these funds for which a n annual budget i s developed and implemented. The following are governmental fund types: General Fund - The principal operating fund of the Town which is used to account for all financial resources except those required required to be accounted accounted for in another fund. This fund is by far the largest in terms of resources, resources, and the majority of town financial transactions are recorded here. Special Revenue Revenue Funds - Used to account account for the proceeds for specific revenue sources sources (other than expendable expendable trusts or major capital projects) that are legally restricted restricted to expenditures expenditures for specified purposes. purposes. Special revenue revenue funds include the following funds: Highway Highway Fund - Used to account for all road-relate road-related d transactions of the Department Department of Public Works. Other expenditures are accounted for in the general fund or special district funds. Library Fund - Used to account for all transactions of the Town's public libraries.
III-1
The world’s largest digital library
Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.
The world’s largest digital library
Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.
The world’s largest digital library
Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.
FINANCIAL INFORMATION INFORMATION Special District Funds - Used to account for the transactions of districts which do not encompass the tax base of the entire Town. Such funds include drainage, lighting, sewer and water district s. Approximately 90% of town citizens reside within all special districts. Community Community Development Development Fund - The Community Developme Development nt Fund is used to account account for activities funded by the Community Development Block Block Grants received from the Federal Federal Government. Government. These activities consist primarily of Public Works Improve Improvements ments and Residential Residential and Commercial Commercial Rehabilitation Rehabilitation Grants, Grants, Planning Planning and Management Management Services and Program Administration. Capital Projects Fund - Used to account account for and report report financial resources to be used for the acquisition, acquisition, construction construction or renovation of major capital facilities or equipment when bond anticipation notes or capital notes are issued to finance such transactions. Fiduciary Funds - Used to account for assets held by the Town in a trustee or custodial capacity.
Trust and Agency Funds Funds - Used to account for and report assets held in the capacity of trustee, custodian custodian or agent for individ individuals uals,, private private organiz organizatio ations, ns, other other govern governmen ments, ts, and/or and/or funds. funds. These These include include expend expendable able trusts, trusts, nonnonexpendable expendable trusts and agency funds. funds. Agency Agency funds are custodial in natures (assets (assets equal liabilities) and do not involve involve measurement measurement of results of operations. operations. Included Included in the trust and agency funds are the assets and liabilities of the Town Clerk, Court Clerk, and the Receiver of Taxes. Internal Service (Proprietary) Fund - Used to account for the financing of goods or services provided by one Town fund for the other Town funds on a cost reimbursement basis.
Risk Retention Fund - The Risk Retention Fund is used to accumulate reserve funds to account for certain claims, judgments and losses in lieu of, or in addition to, purchasing insurance coverage from an insurance company. Account Groups - Used to establish accounting control and accountability for the Town's general fixed assets and general long term debt. The two account groups are not "funds". They are concerned concerned only with with the measurement of financial position, and not with the results of operations.
General General Fixed Assets Account Group - Established Established to account account for all land, buildings, buildings, improvements, improvements, and equipment equipment used by the Town. General General Long-Term Long-Term Debt Account Account Group - Established Established to account account for all long-term long-term debt and other obligations of the Town. Town. Long-ter Long-term m indebtedness indebtedness includes obligations obligations such as bonds and capital notes. Other obligation obligationss include: unbilled retirement liabilities, any vested or accumulated vacation and/or sick leave, and capitalized leases all of which are payable out of future budgets.
III-2
The world’s largest digital library
Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.
The world’s largest digital library
Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.
FINANCIAL INFORMATION INFORMATION
BASIS OF ACCOUNTING
The Basis of Accounting refers to the timing of the recognition of revenues and expenditures in the accounts and the reporting in the financial statements, regardless of the measurement focus applied. Modified Modified Accrual Basis - All Governmental Funds and Expendable Trust Funds are accounted for using the modified accrual basis of accounting. Under this method, revenues are recorded when measurable and available. Available means collectible within the current period period or soon enough thereafter thereafter to be used to pay liabilities liabilities of the current period. period. Revenues Revenues susceptible susceptible to accrual include real property taxes, charges for services, services, intergovernmental revenues and operating operating transfers. If expenditures are the prime factor for determining eligibility, revenues from Federal and State grants are accrued when the expenditure is made. Expenditures are recorded when the fund liability is incurred except for:
1.
Expenditures Expenditures for prepaid prepaid expenses expenses and invento inventory-ty ry-type pe items items are are recogni recognized zed at the time of of the disbursemen disbursements ts when when the Town is liable for payment.
2.
Principal Principal and interest interest on long-term long-term debt is not recognized recognized as an expenditure expenditure until due.
3.
Compen Compensate sated d absence absences, s, such such as vacation vacation and and sick leave leave which which vests vests or or accumul accumulates ates,, are charg charged ed as an expe expendit nditure ure when paid.
Pension costs are recognized as an expenditure when billed by the State. Account Groups - General fixed assets are recorded at actual (historical) or estimated historical cost or in the case of gifts and contributions contributions,, at the fair market value at the time received. received. No provision provision for depreciation depreciation is made. General General long-term long-term debt liabilities are recorded at the par value of the principal amount. No liability is recorded for interest payable to maturity. FINANCIAL CONTROLS
Financial Financial controls controls are necessary necessary for the proper management management of public financial resources. resources. By maintaining financial control, control, resources can be allocated towards those functions necessary to enhance and promote the general welfare of the citizens. Toward this end, the New York State Uniform System of Accounts was developed, and the Town employs additional tools to maintain control. Town makes use of the Uniform System System of Accounts Accounts as required required by the New York State Uniform System of Accounts - The Town Comptroller. This system provides codification of generally accepted accounting principles and a common system of financial reporting reporting by governments governments and their agencies across the state. This results in accurate and fair reporting of governme government nt finances finances to the public as well as streamlining streamlining auditing of local governme governments nts by the state. Functional Functional organization organization of funds ensures ensures that monies appropriated appropriated for a specific purpose are utilized for that purpose purpose only. This aids in budget budget formulation formulation as historical historical data is already categorized categorized in a consistent consistent fashion and new appropriations appropriations can be benchmarked benchmarked against prior expenditures. Since this system is utilized by all political subdivisions of the state, financial comparisons can easily be made between municipalities. Encumbrances Encumbrances - Purchase orders are issued to cover contracts and other commitments for the expenditure of monies are recorded in order to reserve applicable appropriations. This aids in preventing over expenditure of appropriations appropriations as funds are reserved to cover purchases prior to ordering. When the order arrives, the encumbrance is lifted and the funds are released for for payment.
III-3
The world’s largest digital library
Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.
The world’s largest digital library
Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.
FINANCIAL INFORMATION INFORMATION
THE BUDGET PROCESS
Developme Development nt of the Town's Annual Operating Operating Budget is a year long process process involving many stages. stages. These stages stages often overlap one another and are summarized below.
BUDGET SCHEDULE OF DEVELOPMENT January - March
Audit and Analys Analysis: is: The prior prior fiscal year is closed closed and and subject subject to an an audit by a local certified certified public public accounting accounting firm. This audit is not required required by New York State, but is used nevertheless nevertheless to verify verify the Town's ending financial financial statements. Figures Figures for expenditures expenditures and receipts receipts are analyzed analyzed for trends and form the basis for the next year's budget.
March - April
Policy and guideline guideliness are established established for the next next year's year's budget budget based on prelimin preliminary ary economic economic assumptions and the current state of the Town's finances.
April - June
Internal analysis is done to estimate revenues, payroll costs, and benefit costs. Additional estimates are made for many types of expenses: postage, postage, utilities, telephone, telephone, service contracts, maintenance maintenance contracts, contracts, and many others. others. These estimates estimates will be reviewed reviewed and updated periodically periodically throughou throughoutt the budget process.
June
Departmental Departmental requests requests are submitted submitted to Finance Finance and entered entered into the budget budget program. program. Finance Finance meets meets with with the various various depart departmen mentt heads heads to review review request requests. s. Figure Figuress are analyzed analyzed and final final numbers determined.
July -August
Figures are analyzed and final numbers determined.
September - October
By October 30 th, tentative budget submitted to Town Clerk for review by Town Board. Upon review by the Town Board, the tentative budget along with amendments by the Board, must be filed with the Town Clerk and becomes the Preliminary Budget.
November - December
Public hearing on the budget budget for the Preliminary. Preliminary. Town Board traditionally traditionally adopts adopts the budget budget shortly shortly after the public hearing. The budget, along along with any amendments, must be adopted by December December 20th. Should Should the Town Board not adopt a budget budget by this date, the Preliminary Preliminary Budget Budget with such revisions as the Town Board may have made, will constitute the budget for the ensuing fiscal year.
. January
Adopted budget is implemented.
III-4
The world’s largest digital library
Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.
The world’s largest digital library
Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.
FINANCIAL INFORMATION INFORMATION
TERMINOLOGY
TERM Accru ccrual al Basi Basiss
Admini Administr strativ ativee Charge Chargess Ad Valo Valore rem m Tax: Tax: Appr Approp opri riati ation on Appropriated Designated Fund Balance Asse Assess ssed ed Valu Valuati ation on Bond
Bond Bond Anticip Anticipatio ation n Note Note
Bond Bond Rati Rating ng Budg Budget et
Capi Capita tall Asset ssetss Capital Improve Improvement ment Program Program
Capit Capital al Proj Projec ects ts
Capit Capital al Proj Projec ectt Fund Fund Cash Basis Accounts Receivable Cash Basis Accounts Accounts Payabl Payablee Conti Conting ngen ency cy Contra Contractua ctuall Servic Services es
Cash Cash Capit Capital al Rese Reserv rvee Cost Cost Reco Recove very ry Debt Debt Serv Servic icee Debt Debt Service Service Fund Fund Encu Encumb mbra rance ncess
DEFINITION The The basi basiss of acco accoun unti ting ng unde underr whic which h reve revenu nues es and and expe expens nses es are are reco recogn gniz ized ed when when they they occur, rather than when collected or paid. Alloca Allocates tes the cost cost of of genera generall adminis administrat trative ive departm department entss which which are requir required ed to manage manage the Town and which provide support to all funds. Tax Tax based based on the asses assesse sed d valu valuati ation on of prop proper erty ty;; also also know known n as prop proper erty ty taxes taxes.. Lega Legall autho authori riza zatio tion n grant granted ed by Town Town Boar Board d to make make expe expend nditu iture ress and incur incur oblig obligati ation onss up to a specific dollar amount. That portion of the fund balance that has been set aside for specific purposes by the Town Board. Basis Basis for for dete determ rmini ining ng prop proper erty ty taxes taxes.. Asse Assess ssor or dete determ rmin ines es asses assesse sed d valu valuati ation on of residential real estate property, currently at 100% of its full value in the Town of Greece. Writt ritten en pro promise mise to pay pay a spe specif cified ied sum sum of mone money y, call called ed the the face ace value alue or prin princi cipa pall, at a specified date or dates in the future, called the maturity date(s), together with periodic interest interest at a specified rate. ShortShort-ter term m inter interest est-be -beari aring ng note note issu issued ed by a gov govern ernmen mentt in anticipa anticipation tion of bonds bonds to be issued at a later date. The not is retired from from proceeds proceeds of the bond issue to which it is related. The The rati rating ng that that is assi assign gned ed to a bond bond.. Thi Thiss rati rating ng dete determ rmin ines es the the qual qualit ity y of the the bond bond.. Plan Plan of fina financ ncia iall oper operat atio ion n embo embody dyin ing g an esti estima mate te of prop propos osed ed expe expend ndit itur ures es for for a give given n period and the proposed revenue estimates of financing them. Upon approval by the Town Board, the budget appropriation ordinance is the legal basis for expenditures in the budget years. Asse Assets ts of sign signif ific ican antt valu valuee and and havi having ng a usef useful ul life life of seve severa rall years ears.. An annually annually updated updated plan of capital capital expenditures expenditures for for public public facilities and infrastructure infrastructure (buildings, streets, sewers, sidewalks , etc.), with estimated costs, sources of funding and timing of work over a five year period. Proj Project ectss invol involvi ving ng the purc purcha hase se of cons constr truct uctio ion n of capita capitall asset assets. s. Often Often a capita capitall proj projec ectt encompasses the purchase of land and the construction of a building or facility, or major street construction construction or reconstructio reconstruction. n. Design, Design, engineering or architectural fees are often a part of a capital project. project. A fund fund crea created ted to accou account nt for for finan financia ciall reso resour urce cess and the payme payment nt of the acquis acquisiti ition on or construction of capital assets such as public facilities, streets, etc. This account keeps track of all cash revenue to be received.
This account keeps track of of all cash expend expenditures itures encumbered encumbered.. An appr approp opri riati ation on of fund fundss to cove coverr unfo unfore rese seen en expe expend nditu iture ress which which may occur occur durin during g the the budget year. Expens Expenses es that are usually usually incurre incurred d by enteri entering ng into a formal formal agreem agreement ent or contrac contractt with with anothe anotherr party. party. Expens Expenses es include included d in this category category can include include utilities, utilities, insurance insurance,, repairs, professional fees, sundry supplies, or services. Cash Cash that that is rese reserv rved ed in the capita capitall fund fund for for a spec specif ific ic purp purpose ose.. Reco Recove veri ring ng costs costs incur incurre red d by the the Town Town in prov providi iding ng direct direct serv service icess to a resid residen ent. t. This This is done through the use of fees for service. Pay Payment ment of prin princi cipa pall and and inte intere rest st rela relate ted d to long long-t -ter erm m debt debt.. A fund fund establis established hed to account account for for the accumul accumulatio ation n of resour resources ces for, for, and the paymen paymentt of, of, general long-term debt. Appr Approp opri riati ation onss comm committ itted ed by contr contract act for for good goodss or serv service icess which which will will not not be paid paid for for III-5
The world’s largest digital library
Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.
The world’s largest digital library
Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.
FINANCIAL INFORMATION INFORMATION Expe Expend ndit itur urees
until the next fiscal year. Cost Costss of goods rece receiv ived ed or serv servic iced ed rende endere red. d.
III-6
The world’s largest digital library
Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.
The world’s largest digital library
Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.
The world’s largest digital library
Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions! Start Free Trial Cancel Anytime.
FINANCIAL INFORMATION INFORMATION TERM
Fisca iscall Year Year
Full Full Marke Markett Valu Valuee Fund und
Fund und Bala Balanc ncee Fund Fund Equity Equity Trans Transfe ferr Gene eneral ral Fund und
General General Obligation Obligation Bonds Grant rantss Intergo Intergovernm vernmental ental Revenue Revenue Inter Interfun fund d Revenu Revenues es Inter Interfun fund d Transf Transfers ers
Lease Lease-Pu -Purch rchase ase Agree Agreemen mentt Long Long-T -Ter erm m Debt Debt Matu Maturrity ity Modif Modifie ied d Accr Accrual ual Obje Object ct Level evel Payments Payments in Lieu of Taxes Taxes
Spec Special ial Asse Assess ssme ment nt Special Special Distric Districtt Funds Funds Speci Specific fic User User Fees Fees SubSub-ob obje ject ct Unit Unit Char Charge ge
DEFINITION A 12 mont month h peri period od to whic which h the the annu annual al oper operat atin ing g budg budget et appl applie iess and and at the the end end of whic which h a government government determines determines its financial position position and the results results of the operations. operations. The fiscal year for the Town of Greece is January 1 through December 31. Uses Uses full full mark market et valu valuee of prop proper erty ty for for basis basis of dete determ rmini ining ng taxes taxes instea instead d of prop proper erty ty value assessment tables. An acco accoun unti ting ng enti entity ty with ith a self self bala balanc ncin ing g set set of acco accoun unts ts which hich are are seg segreg regate ated for the the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. The The bala balanc ncee rema remain inin ing g in a fund fund afte afterr cost costss have have been been subt subtra ract cted ed from from reve revenu nues es.. The The trans transfe ferr of equit equity y from from one one fund fund to anot anothe her. r. The The fund und used used to acco accoun untt for all all fina financ ncia iall reso resour urce cess except cept tho those requ requir ired ed to be accounted accounted for in another fund. The General General Fund provides a majority majority of Town services to the residents of the Town of Greece. Bonds which the full faith and credit of the issuing governme government nt are pledged pledged for payment. payment. Cont Contri ribu buti tio ons or gift giftss of cash cash or other ther asse assets ts from ano anothe ther governm ernmen entt to be use used or expended for a specified purpose or activity. Revenue Revenue from other governme governments nts in in the form of grants, grants, shared shared revenues, revenues, or payment payment for for services rendered. A revenu revenuee receiv received ed from from anothe anotherr fund fund as a result result of servic services es render rendered ed to the other other fund. fund. Legal Legally ly authori authorized zed transf transfers ers from from a fund fund receiv receiving ing revenu revenuee to anothe anotherr fund fund where where it is to be expended. Revenue and expenditures are accounted for in both funds. The Town's Self Insurance and Capital Funds are the only funds subject to interfund transfers. Contrac Contractual tual agree agreemen ments ts which which are terme termed d "lease "leases", s", but but which which in substan substance ce amount amount to purchase contract s, for equipment a nd machinery. Debt Debt with with a matur maturity ity of more more than than one year year afte afterr the date date of issua issuance nce.. The The date date on which hich the the prin princi cipa pall or stat stateed value alue of inv investe ested d or debt debt oblig bligat atio ions ns are are due due and may be reclaimed. Reve Revenu nues es are are reco record rded ed as the amoun amountt beco become mess measu measura rabl blee and and avail availab able le.. Expen Expendit ditur ures es are Revenues recorded when the liability is incurred. A leve levell of expe expens nsee cove coveri ring ng a broa broad d rang rangee of rela relate ted d expe expens nses es.. Pay Payroll roll,, Equi Equipm pmen ent, t, Assets, Contractual Services, Debt Services, Benefits, Transfers. Payment Payment made made by industrial industrial enterpr enterprises ises for new developme development nt which which qualifies qualifies under the County of Monroe Industrial Industrial Developme Development nt Act. Such development development is subject to a lower lower tax rate for ten years. A levy levy made made again against st cert certain ain prop proper ertie tiess to to defr defray ay part part or all all of the cost cost of a spec specif ific ic improvement or services deemed to primarily benefit those properties. A fund fund used used to account account for for the financin financing g of public public improv improveme ements nts or servic services es deemed deemed to benefit primari ly those properties. Fees Fees charg charged ed to resi reside dents nts for for the use use of serv service ices, s, perm permits its,, and licen license ses. s. A subsub-cat categ egor oriz izati ation on of an obje object ct leve levell expe expens nsee spec specif ifyi ying ng a narr narrow ow rang rangee of expe expend nditu iture re types. A spec specia iall dist distri rict ct char charge ge asse assess ssed ed agai agains nstt each each prop proper erty ty rega regard rdle less ss of valu valuat atio ion. n.