Hist and Proj Operating Receipts FY 2011 2 17 2010 - DC Water

ACCOUNTING AND BUDGET PROCESSES
Basis of Accounting
DC WASA is a single enterprise fund and maintains accounting records using the accrual basis of accounting in accordance with
Generally Accepted Accounting Principles (GAAP). Under this basis of accounting, revenues are recorded when earned, and
expenses are recorded when goods and services are received. DC WASA expenditure budget is prepared on a comparable basis to
GAAP, with the exception of debt service (including principal and interest) that is budgeted in full when due. Depreciation and interest
expense are recorded as expenses for financial statement purposes. (Depreciation is not budgeted.)
Annual Budget Process
The general framework for the operating and capital budget development, along with specific dates for the presentation of several
phases of the budget, is illustrated in the following budget calendar. The budgetary process is an integrated approach that links the
operating and capital budgets with the ten-year financial plan. Preparation of DC WASA's budget begins in spring with development
of the ten-year financial plan. Based on the financial framework laid out in the ten-year plan, departments develop individual
operating budgets, and management reviews these submissions over the summer. These budgets cover a two-year period,
including a revised budget for the immediate ensuing fiscal year (e.9., beginning October 1,2010) and a approved budget for the
next fiscal year (e.9., beginning October 1,20'11). Concurrent with the operating budget process, the Authority's ten-year capital
program is developed and reviewed by management. ln October, management presents the operating budgets, ten-year plan, and
capital improvement þrogram to the Board's Environmental Quality and Operations and Finance & Budget Committees for their
review. The Committees complete their review from October through December. The operating budgets, capital improvement
program, and ten-year plan are then forwarded to the full Board for its consideration in January.
After adoption by the Board of Directors, the Authority is required to submit its annual operating and capital budgets to the Mayor and
Council of the District of Columbia for its review and comment; however, neither has power to change the annual budgets of the
Authority. The District then includes the Authority's budgets as an enterprise fund in the fiscal year budget it sends to the U.S.
Congress for approval. Any increases to the Authority's approved budget must receive approvalfrom the U.S. Congress.
Budgetary Gontrol
After the U.S. Congress approves the budget, the operating and capital budgets are loaded into the DC WASA's financial
management system, which prevents overspending without appropriate approvals. The Department of Finance and Budget prepares
daily and monthly management reports for each operating unit, management staff, the Board of Directors and its various committees.
The reports are consistently reviewed each month to ensure the Authority complies with its authorized budget levels.
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