Special Feature: Elected Officials Segment
Municipal Funding Statute indicates resources a municipality is permitted to receive. Further, statutes expressly and/or implicitly state the purposes for which those resources may be used. All resources received and spent shall be according to the law. For this reason, municipalities have evolved a means of indicating legal compliance by use of “fund accounting.” (Municipal Accounting Manual, produced by SD Department of Legislative Audit) Cities must hire a finance officer that looks after Municipal Funding, keeps books and oversees various other aspects of city business. Despite, however, the hiring of a brilliant, intuitive finance officer elected officials are urged to become generally familiar with Municipal Funding. All government, regardless of its level, is based upon the old checks and balances idea. If you don’t get involved and learn about all aspects of your city’s business you cannot be an active participant in that balancing system. The term “Fund” is defined as, “a fiscal and accounting entity with a selfbalancing set of accounts recording cash and other financial resources, together with all related
52
liability and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations.” (Defined by The Governmental Accounting Standards Board.) Municipalities are charged with a diverse set of obligations…and therefore the checks and balances system is essential and necessary when determining legal compliance. The required accounts are organized on the basis of funds, each of which is completely independent of any other. Each fund must be so accounted for that the identity of its resources, obligations, revenues, expenditures and fund equities is continually maintained. Funds are classified according to the source of revenue and the type of activities they finance. Funds of a similar nature are classified according to fund groups. The Budget This is only a summary, consult the League’s Handbook for Municipal Officials for more detail!
SOUTH DAKOTA MUNICIPALITIES
