ACFR FY 2022 FINAL BOOK - Flipbook - Page 79
City of Eustis, Florida
FINANCIAL SECTION
NOTES TO FINANCIAL STATEMENTS
Note 3 - Change in Accounting Principle
For the year ended September 30, 2022 the City implemented Governmental Accounting Standards
board (GASb) Statement No� 87, Leases� GASb Statement No� 87 enhances the relevance and consistency of information of the government’s leasing activities� It establishes requirements for lease
accounting based on the principle that leases are financings of the right to use an underlying asset�
A lessee is required to recognize a lease liability and an intangible right to use the lease asset, and a
lessor is required to recognize a lease receivable and a deferred inflow of resources� These changes
were incorporated in the City financial statements and had no effect on the beginning net position�
Note 4 - Stewardship, Compliance, and Accountability
Budgetary Requirements
The following procedures were used to establish the budgetary data reflected in the financial
statements:
1� by August of each year, the City manager submits to the City Commission a proposed operating
budget for the fiscal year commencing the following October 1�
2� Two public hearings were held to obtain taxpayer comments�
3� before October 1, a resolution legally enacts the budget�
4� budgets are legally adopted, and formal budgetary integration is employed as a management
control device during the year for the General Fund, all Special Revenue funds, and the pension
trust funds� The budget adopted for the Enterprise fund is derived in compliance with debt
covenants�
5� budgets for the governmental funds are adopted consistent with generally accepted accounting
principles (GAAp)� The budget for the enterprise fund is adopted on a non-GAAp basis to reflect
the budget versus actual information related to “operations and maintenance” as defined in bond
covenants�
6� The City Commission must approve any revisions that alter the total appropriations of any fund�
The classification detail at which expenditures may not legally exceed appropriations is at the
total fund level� During the fiscal year ended, various appropriations were approved by this
policy� budgeted amounts shown in the financial statements are adopted and can be amended�
However, amendments were nominal and did not significantly change the originally adopted
budget�
In addition to the legal requirements discussed above, the Commission has adopted management
control and approval guidelines for expenditures and budget amendments� Critical components of
these management guidelines are as follows:
1� The City Commission must approve transfers of budgeted amounts between funds�
2� A department director may transfer funds up to $5,000 within the department’s operating capital
accounts�
3� No expenditure of encumbrance may occur without a sufficient budgetary balance�
Annual Comprehensive Financial Report | September 30, 2022
79