COG Comprehensive Annual Financial Report

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

$68,699,870

Less: Inventories

1,023,548 194,171 28,775,095 6,237,281 6,211,244 26,258,531

Prepaid Expenditures

Stabilization by State Statute

Appropriated Fund Balance in 2019 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. As required by North Carolina General Statutes, appropriations in Governmental Funds are encumbered upon issuance of purchase orders, contracts or other forms of legal commitments. Even though goods and services have not been received, the transactions are accounted for as a reservation of fund balance in the year that the commitment is made. While appropriations lapse at the end of the Fiscal Year, the succeeding year’s budget ordinance specifically provides for the re-appropriation of year-end encumbrances. The outstanding encumbrances are amounts needed to pay any commitments related to purchase orders and contracts that remain unperformed at year-end are as follows:

Encumbrances

General Fund

Debt Service Fund

Non-Major Funds

$

81,241,536

$

3,747,122

$

4,000

$

77,490,414

Supplemental budgetary amendments increased the General Fund appropriation by $699,966 for programs being funded by additional revenues and appropriated fund balance. No expenditures exceeded appropriations at the legal level of control

during Fiscal Year 2018. B. Deficit Fund Equity The following funds report deficit fund balances as of June 30, 2018:

Workforce Investment Act

$

(35,018)

Street Improvements Bond Fund - Series 2010 Parks and Recreation Bond Fund - Series 2010 Water Resources Bond Fund - Series 2018

(1,519,376) (222,986)

(82,027)

These deficits will be eliminated with future reimbursements of federal and state grants and with proceeds from future bond issuances.

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