Agenda - 05-30-2013 - 2 - Laserfiche WebLink

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Fund Structure The accounts of the County are organized on the basis of funds or account groups with each fund constituting a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self - balancing accounts reflecting its assets, liabilities, fund balance, revenues and expenditures. The funds of the County are created because of the diverse nature of governmental operations and the necessity of complying with legal provisions. Orange County has three broad fund categories: governmental, proprietary and fiduciary. Only two of these, governmental and proprietary, are included in this document. Government Funds These funds account for expendable financial resources other than those accounted for in proprietary and fiduciary funds. Most of Orange County's functions are included in this fund type. The modified accrual basis of accounting is used in this fund. "Basis of accounting" refers to criteria for determining when revenues and expenditures are recorded in the accounting system. The "modified accrual basis" requires that expenditures be recorded when a liability is incurred (time of receipt) for goods or services provided to the County. The expenditure is usually recorded before the funds are disbursed. This type of accounting also requires that most revenues be recorded when they are actually received. The modified accrual basis of accounting helps to keep financial practices on a conservative footing; expenditures are recorded as soon as the liabilities for them are incurred, and most revenues are not recorded until they have actually been received in cash. The County's individual governmental funds include: General Fund - the general operating fund of the County, which accounts for normal recurring County activities such as education, human services, public safety, etc. These activities are funded by revenue sources such as property tax, sales tax, charges for services, etc. Special Revenue Funds - account for the proceeds of specific revenue sources (other than major capital projects) that require separate accounting because of legal restrictions or administrative action. Special revenue funds in Orange County include: Grant Projects Fund, Community Development Fund, Fire Districts Fund, Revaluation Fund, Visitors Bureau Fund, Housing (Section 8) Fund, E911 Fund and Article 46 Sales Tax Fund. • Capital Projects Funds - account for all resources used for acquisition, construction, or renovation of major capital facilities of Orange County, as well as Orange County Schools and Chapel Hill - Carrboro City Schools. Capital project funds in Orange County include: County Capital Projects Fund and School Capital Projects Fund. Prior to July 1, 1993, several funds were used to account for capital projects. Proprietary Funds These funds account for operations, which are similar to those found in the private sector because net income is determined in these funds. The accrual basis of accounting is used for this fund. In the accrual basis of accounting, revenues are recognized when they are earned and expenses are recognized when they are incurred. Orange County operates one type of proprietary funds: 15