2020 Comprehensive Annual Financial Report

The details of this $44,724,814 difference are as follows:

Capital Outlay Contributed Capital Disposal Depreciation/Amortization Expense Combined Adjustment

$

59,291,949 1,925,800 (1,079,233) (15,413,702) 44,724,814

$

Another element of that reconciliation states that “the issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are unearned and amortized in the statement of activities. Also included are compensated absences activities.” The details of this $(39,142,810) difference are as follows:

Issuance of Debt Principal Expenditure

$ (100,579,079)

59,384,068 (273,810) 3,195,440 (869,429)

Bond-Related Amortization

Interest Expenditures/PremiumAmortization

Compensated Absences Expense

Combined Adjustment

$ (39,142,810)

III. Stewardship, Compliance and Accountability A. Budgetary Information

In accordance with the General Statutes of the State of North Carolina, the City prepares and adopts its budgets on the modified accrual basis. The General Statutes also require balanced budgets for all funds for which a budget is required. The City adopts annual budgets for all funds except Capital Projects Funds, Grant Project Funds and Trust Funds. Annual budgets must be adopted no later than July 1, the beginning of the Fiscal Year. The following Special Revenue Funds have legally adopted annual budgets: State Highway Allocation, Cemetery, Hotel/Motel Occupancy Tax, Special Tax Districts, Housing Partnership Revolving, Economic Development Fund, and Emergency Telephone System Fund. Capital and Grant Project budgets are adopted for the duration of the project which may encompass several years. Appropriations for funds that adopt annual budgets lapse at the end of the budget year. Capital and Grant Project budget appropriations do not lapse until the completion of the project. The following schedule provides management and citizens with information on the portion of General Fund balance that is available for appropriation:

Total Fund Balance - General Fund

$72,046,863

Less: Inventories

1,236,548 135,859 32,262,485 4,260,650 6,485,421 27,665,900

Prepaid Expenditures

Stabilization by State Statute

Appropriated Fund Balance in 2021 Budget

Capital Projects

Working Capital/Fund Balance Policy

Budgets are adopted at a fund level and are amended as necessary during the Fiscal Year in one of two ways. First, the City Manager, as delegated by City Council, may make line-item transfers within individual fund budgets with subsequent monthly notice to City Council. Such transfers can neither increase nor decrease the overall budget at the fund level. Secondly, the budget may be increased or decreased at the fund level as changing circumstances dictate, subject to City Council approval. The legal level of budgetary control (the level at which expenditures may not legally exceed appropriations) is the fund level. 37n