FY 23 Approved Budget Book

COUNTY BUDGET POLICIES AND PROCESS

Agency Funds are also categorized under Fiduciary funds. Agency funds include Pass-Through Grants (accounts for financial assistance received from other governments and transferred to another government, individual, not-for-profit or other organization) in which Harford County Government serves as an agent with little or no discretion in determining how the assistance will be used; and the Harford County Public Entities Healthcare Consortium (accounts for a rate stabilization reserve fund created for Harford County Public Entities Consortium) in which Harford County Government serves as an agent with little or no discretion in determining how the funding will be directed. Government-wide, proprietary and fiduciary fund financial statements are reported using an economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of cash flow. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are considered available when they are collectible within the current period, or soon enough thereafter to pay liabilities of the current period. For this purpose the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, claims and judgments are recorded only when payments are due. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and capital leases are reported as other financing sources. Property taxes, income taxes, state shared tax revenues, and interest associated with the current fiscal period are all considered to be susceptible to accrual, and therefore have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable items are considered to be measurable and available only when cash is received by the government. Annual budgets are adopted for the General Fund, Highways Fund, Agricultural Preservation Fund, Watershed Management Fund, Tax Increment Financing Fund, Parks and Recreation Fund, Capital Projects Fund, W & S Enterprise Fund, Internal Service Fund, Firemen’s LOSAP Fund, and the Sheriff’s Office Pension Trust Fund. Budgets are not adopted for the remaining private purpose trust funds due to their nature. The Internal Service Fund and the Pension Fund budgets are for management control only. Encumbrances are treated as expenditures for budgetary accounting purposes; payroll is accrued for financial statement purposes only; and interfund reimbursements are eliminated for financial statement purposes. The capital budget reflects appropriations at the individual project level. Expenditures and encumbrances may not legally exceed appropriations at that level; and, the County Council and the County Executive must approve all transfers of appropriations between projects. Statements of revenues, expenditures, encumbrances, changes in fund balances, and budget (non-GAAP vs. actual) are prepared for each governmental fund with an annual budget. Basis of Accounting Basis of Budgeting

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