ACFR - FY2020 5-28-21 FINAL - Flipbook - Page 66
NOTES TO FINANCIAL STATEMENTS
CITY OF EUSTIS, FLORIDA
(Continued)
Note 2 - Stewardship, Compliance and Accountability (Continued)
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 on a basis consistent with generally
accepted accounting principles (GAAP). The budget for the enterprise fund is adopted
on a non-GAAP basis to reflect budget versus actual information related to “operations
and maintenance” as defined in bond covenants.
6) The City Manager is authorized to transfer part or all of an unencumbered appropriation
balance between departments within a fund; however, 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 approved in accordance with
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.
Key components of these management guidelines are as follows:
1) Transfers of budgeted amounts between major object codes of a department within a
fund must be approved by the Commission if they exceed $25,000.
2) Transfer of budgeted amounts between funds must be approved by the Commission.
3) A department director may transfer funds up to $5,000 within the department’s
operating of capital accounts.
4) No expenditure of encumbrance may occur without a sufficient budgetary balance.
The City uses encumbrance accounting, under which purchase orders, contracts, and other
commitments for the expenditure of funds, are recorded to reserve that portion of applicable
appropriation. Encumbrances represent commitments related to unperformed contracts for
goods or services. Most operating encumbrances outstanding at year-end are canceled.
Deficit Fund Equity of Individual Funds
Street Improvement Fund by the end of the fiscal year ended up with deficit of 292,672,
this is due to COVID -19 and reduction in Gas Tax revenue, transfers from General Fund
haven’t been adequate and have not cover Street Improvements Fund expenditures. In
the next fiscal year negative fund balance will be covered with sufficient fund transfers
from General Fund and suitable fund balance will be maintained.
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