2012 Budget - South Suburban Parks and Recreation

South Suburban Park and Recreation District
Summary of Significant Financial Policies
Basis of Accounting (continued)
The General Fund, Conservation Trust Fund, 2012 1 Mill Fund, and the Debt Service fund all
have an annually adopted budget.
Proprietary funds distinguish operating revenue and expenditures from nonoperating items.
Operating revenue and expenditures generally result from providing services and goods in
connection with a proprietary fund’s principal ongoing operations. The principal operating
revenues of the District’s enterprise fund are charges to customers for sales and services.
Operating expenditures for the enterprise fund include the cost of sales and services and
administrative expense. All revenue and expenditures not meeting this definition are
reported as nonoperating revenue and expenditures.
For audited financial statement purposes the proprietary fund statements are prepared using
Full Accrual Basis of Accounting. For the full accrual method, revenue is recorded when
earned and expenses are recorded when a liability is incurred, regardless of the timing of
related cash flows. For Budget purposes the proprietary fund statements are prepared using
Non-GAAP Budgetary Basis of Accounting (modified accrual). Several of the differences in
these two methods include the recording of debt service principal payments and capital
expenditures. These items are recorded as an expense for the budgetary basis. Depreciation
and amortization are not shown for the budgetary basis, as they are non cash items. Other
differences between the two methods can also include how the statements reflect the
proceeds from issuance of debt, contribution of capital assets, gain or loss on sales of assets,
and a change in the long term portion of compensated absences.
The District reports the following major proprietary fund:
Enterprise Fund – This fund is used to account for operations that are financed and
operated in a manner where the intent of the District is that the costs of providing goods
and services to the general public on a continuing basis be financed or recovered
primarily through user charges, similar to a business; or where the District has decided
that periodic determination of revenue earned, expenditures incurred and/or net income is
appropriate for capital maintenance, public policy, management control, accountability or
other purposes.
The Enterprise Fund has an annually adopted budget.
Budgets
In accordance with the State Budget Law, the District's Board of Directors holds public hearings
in the fall each year to approve the budget and appropriate the funds for the ensuing year. The
appropriation is at the total fund expenditures level and lapses at year end. The District can
modify the budget by line item within the total appropriation without notification. The
appropriation can only be modified by Board approval upon completion of notification and
publication requirements. It is the District’s practice to adopt a balanced budget, in which
planned expenditures are equal to estimated net revenues and appropriated fund balances.
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