1983-03-02 Regular Meeting - Laserfiche WebLink

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e e . ",- CITY OF LA PORTE Page 4 of 12 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1982 w . . . '- . C. BASIS OF ACCOUNTING Basis of accounting refers to when revenues and expenditure~ or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measure- ments made, regardless of the measurement focus applied. Governmental fund types of the City are kept on a modified accrual basis. The modified accrual basis of accounting records revenues in the accounting period in which they become both measurable and available to finance expenditures of the fiscal period. Taxes collected as well as other revenues, such as inspection fees and fines, are reported as income when received. Uncollected and delinquent tax receivables due at year end are recorded as deferred revenue items until collection is assured. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. Exceptions to this general rule include: (1) accumulated unpaid vacation, sick pay, and other employee amounts which are not accrued; and (2) principal and interest on general long-term debt which is recognized when due. . All proprietary funds and nonexpendab1e trust and pension trust funds are accounted for using the accrual basis of accounting. Their revenues are recognized when they are earned, and their expenses are recognized when they are incurred~ Unbilled Utility Fund utility service receiv- ables are recorded at year end. -. D. BUDGETS AND BUDGETARY ACCOUNTING The City follows th~se procedures in establishing the budgetary data reflected in the financial statements: 1) Prior to September 1, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following October 1. The operating budget includes proposed ex- penditures and the means of financing them. 2) A public hearing is conducted to obtain taxpayer comments. 3) Prior to September 30, the budget is legally enacted through passage of an ordinance. 4) The City Manager approves changes within a department, which is the legal level of control. Council approves changes between departments as well as amends the budget during the year as may be required. . -14- "