Accounting and Fund Structure Basis of Accounting
For budgetary purposes, the City of Gahanna operates on a cash basis. This means that revenues are recognized only when cash is received, and expenditures are recognized when paid. On an annual basis, the City converts its cash-based financial records in accordance with the guidance of the Government Accounting Standards Board (GASB) Statement number 34, which requires that entities produce both government-wide full-accrual basis statements as well as governmental fund-level modified-accrual basis statements. Proprietary funds are accounted for on a full-accrual basis. These statements are included in the City’s annual financial reports, and are audited appropriately.
Fund Accounting A fund is a separate, self-balancing set of accounts used to account for resources that are segregated for specific purpose in accordance with special regulations, restrictions or limitations. The separation of the City’s activities into funds allows the City to maintain the appropriate (required) controls over expenditures for each activity and to report on specific activities to interested citizens. All funds are classified into one of three fund types. These fund types and the components of each are: Governmental Funds General Fund – The General Fund is the primary operating fund of the City and is used to account for all financial resources except those required to be accounted for in another fund. Principal sources of revenue consists of income tax receipts, property taxes, licenses and permits, grants, charges for services, intergovernmental revenue, and interest earnings. Major expenditures are for personnel costs, materials and supplies, purchased services, capital outlay and transfers to other funds. The General Fund is used to finance the administrative, public safety, parks, recreation, community development, infrastructure and technology functions of the City. Special Revenue Funds – Multiple special revenue funds are in place to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects. The City’s special revenue funds include the Street Maintenance and Repair Fund, into which the City’s share of motor vehicle registration fees and gasoline taxes are deposited, as well as the State Highway Fund, into which a portion of the County’s motor vehicle registration fees and gasoline taxes are deposited to provide for the maintenance of State Highways within City limits. The City’s Tax Increment Financing (TIF) fund is also considered a special revenue fund. Capital Improvement Funds –The City’s capital improvement funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital
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