1991 CAFR - Laserfiche WebLink

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CITY OF RAMSEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1991 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Danis of Accounting (continued) Expenditures are recognized under the modified accrual basis of accounting when the related fund liability is incurred, except for principal and interest on general long -term debt which is recognized when due. The Proprietary Funds are accounted for using the accrual basis of accounting. Revenue is recognized when it is earned and expenses are recognized when they are incurred. E Budget n and Budgetary Accounting The City follows these procedures in establishing the budgetary data reflected in the financial statements. 1) The City Administrator submits to the City council a proposed operating budget for the fiscal year commencing on January 1 of the following year. The operating budget includes proposed expenditures and the means of financing them. 2) Public hearings are conducted to obtain public comments. 3) The budget is legally enacted through passage of a resolution. 4) After the budget resolution has been adopted, the council may by a resolution approved by a 4/5 vote of its members, reduce the sums appropriated for any purpose by the budget resolution, or authorize the transfer of sums from unencumbered balances of appropriations in the budget resolution to other purposes. However, the Council may not increase the amounts fixed in the resolution beyond the estimated funds available except to the extent that actual receipts exceed the estimated funds available. 5) Formal budgetary integration is employed as a management control device during the year for the General Fund and Special Revenue Funds. Budgetary control for Debt Service Funds is achieved through general obligation bond provisions. Budgetary control for Capital Project Funds is accomplished through the use of project controls. 6) Budgets for the General Fund and Special Revenue Funds are adopted on a basis consistent with generally accepted accounting principles (GAAP). 7) As required by City Charter, the Council sets the level of budgetary control. Budgetary control is maintained by fund. Budgeted amounts presented are as originally adopted, or as amended by the City Council. Individual amendments were not material in relation to the original appropriations which were amended. Budgeted expenditure appropriations lapse at year -end. Encumbrances outstanding at year -end expire and are not reported in the financial statements. -16-