By Myrna Trauntvein
Times-News Correspondent
The annual audit of Mona City indicated that some of the funds in the business-type category are doing very well indeed. “Your water fund and natural gas fund are doing extremely well and are making money. Your sewer fund has a large annual depreciation and will be operating at a loss for a few years but you have a great facility,” said Greg Ogden, CPA, Springville. Ogden does the independent audit for the city and he said that one thing the city can do to improve is to make certain that each council member receives proper training through the Utah League of Cities and Towns (ULCT). Budget Training 101 is available from ULCT. The training is available online as well as at a training session. Two council members still need to get the training. “We will review several pages of the audit,” said Ogden. “For the year ending June 30, 2018, all department spending was within the appropriated budget.” Fees collected from enterprises should cover the cost of the enterprise. He said that cities can collect large enough revenues from their enterprise funds and transfer the gains to the city’s general fund. Revenues came from taxes as noted in the actual general fund at $292,816; licenses and permits at $35,328; intergovernmental revenues at $95,755; charges for services at $145,708; interest at $11,827; and miscellaneous revenue at $4,575. He said that original budgets represent the revenue estimates and spending authority authorized by the city council prior to the beginning of the year. Final budgets represent the original budget amounts plus any amendments made to the budget during the year by the council through formal resolution. Actual expenditures for general government were $188,592; public safety at $20,579; streets and sanitation at $180,389; parks and recreation at $75,395; and cemetery at $39,138. “Final budgets do not include unexpended balances from the prior year because such balances automatically lapse to unreserved fund balance at the end of the year,” said Ogden. A proprietary fund is used in governmental accounting to account for activities that involve business-like interactions. Examples of enterprise funds include city-owned utilities such as power, water and sewer. “The city maintains one type of proprietary fund,” Ogden said. “Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The city uses three enterprise funds to account for the operations of the water, sewer and electric utilities.” “Even after completing this building (the new city center) there is still $41,000 in the Capital Project Fund.” Capital Project Fund has several advantages. First, monies allocated to projects in a Capital Project Fund do not expire but stay with the project until the project is completed. The monies do not revert to the Capital Project Fund balance or the General Fund balance at year-end. A community can create a project in the Capital Project Fund and apply multiple years’ funding to it until it is fully financed. Second, because money dedicated to a project in a Capital Project Fund stays with the project, it does not impact the General Fund’s balance. “A couple of important pages deal with the statement of net position,” said Ogden. Both governmental and business-type activities are reviewed on the same pages. This financial reporting mode, provided by GASB Statement No. 34, refers to an institution that accounts for its activities as governmental (that is, financed by taxes, intergovernmental revenues, and other non-exchange activities) with characteristics of business-type activities (those supported by fees charged for goods or services). The financial statements for this type of entity include a column for reporting governmental activities and another for business-type activities. GASB Statement 34 specifies the financial reporting format for this type of governmental entity. “The statement of net assets presents the same information as a balance sheet: It assesses the balance of a government’s assets—the resources it can use to provide service and operate the government—against its liabilities—its obligations to turn over resources to other organizations or individuals. The difference between a government’s assets and its liabilities is called net assets,” said Ogden. Total assets for the governmental activities for Mona were $4,561,203 and for business-type activities were $18,935,458. “Net position includes net investment in capital assets which is restricted for debt service, Class C roads, construction and perpetual care and unrestricted funds were $4,561,085 for governmental activities and $12,413,185 for business-type activities. “You will find that the class C road fund is $36,000 higher this year than last year,” said Ogden. Restricted net assets represent resources that are constrained to a particular purpose. Unrestricted net assets are the last component, essentially being all resources not included in the other components. These resources can be considered usable for any purpose, though they may not be in a spendable form, like cash. The unrestricted fund balance had increased this past year. Liabilities and deferred inflows of resources were $269,118 for governmental activities and $6,522,273 for business-type activities.
| 