1983-03-02 Regular Meeting - Laserfiche WebLink

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e e . CITY OF LA PORTE Page 5 of 12 1'\-..... NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1982 l. . . -:: 5) Formal budgetary integration is employed as a management control device during the year for the General Fund and Enterprise Funds. Formal Budgetary integration is not employed for Debt Service Funds and Capital Project Funds because effective budgetary control is alternatively achieved through general obligation bond indenture provisions and lega11y binding construction contracts, respectively. 6) The budget for the General Fund is adopted on a basis consistent with generally accepted accounting principals (GAAP). Budgets for Enter- prise Funds are utilized for planning, control and evaluation pur- poses. They are adopted on a basis consistent with GAAP except that bond principal payments and fixed asset acquisitions are treated as expenditures. Budgeted amounts are as originally adopted, or as amended by the City Council prior to September 30, 1982. Individual amendments were not material in relation to the original appropriations which were amended. . E. ENCUMBRANCES Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in the General Fund and Capital Project Funds. Encumbrances outstanding at year end are re- ported as reservations of fund balances since they do not constitute expenditures or 1iabilities. Appropriations lapse at year end. F. INVESTMENTS Investments in time-deposit certificates are stated at cost. Amounts of cash held in passbook savings accounts at year end are included as part of the cash balance on the financial statements. G. INVENTORY Inventory is valued at cost (first-in, first-out). Inventory in the General and Enterprise Funds consists of expendable supplies held for consumption. The cost is recorded as an expenditure at the time individual inventory items are consumed. H. ADVANCE TO OTHER FUNDS All inter fund loans receivable (reported as "Due from" asset accounts) are considered "available spendable resources." . -15- -. .