TheReview_Jan_Feb_2022 Flipping Book

No one comes into office knowing all the things they need to know. The best advice I can give you is to avail yourself of the training opportunities available through the League and others. A good place to start is our Elected Officials Core and Advanced Weekender program. It addresses this and many other issues to aid elected officials in carrying out their duties and provides a solid foundation of the many issues you will be grappling with. I hope this helped to shed a little light on a complicated subject. If you have specific questions, you can always direct them to our inquiry service at info@mml.org. Anthony Minghine is the deputy executive director and COO for the League. You may contact him at 734.669.6360 or aminghine@mml.org.

Governmental Accounting It is also important to understand that local government uses a different basis of accounting than you might see in a corporate environment. Local government follows the Governmental Accounting Standards Board (GASB) rules and uses fund accounting. In short, fund accounting breaks the financial record into different areas based on a number of factors. Most municipality and village operations will be found in the general fund. The general fund will be where general tax revenues are recognized and general operation’s expenditures are charged. It has the fewest restrictions on how funds can be used. You will also encounter special revenue funds, which as the name implies, has a special revenue source, and funds are used for a special purpose. Your major and local road funds are an example of a special revenue fund. Enterprise funds are used for more business type activities like your water and sewer system. Understanding the differences are important to effectively manage your community’s finances. As you can see, there are numerous factors to be considered when plotting a financial course for your community.

32 THE REVIEW

JANUARY / FEBRUARY 2022