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7.1.A. - Page 34 , <br /> Management's Discussion and Analysis <br /> For the year ended June 30, 2014 <br /> The government -wide financial statements may be found on pages 20 -21 of this report. <br /> Fund Financial Statements <br /> A fund is a grouping of related accounts that is used to maintain control over resources that have been <br /> segregated for specific activities or objectives. The City of Redwood City, like other state and local <br /> governments, uses fund accounting to ensure and demonstrate compliance with finance - related legal <br /> requirements. All of the funds of the City of Redwood City can be divided into three categories: <br /> governmental funds, proprietary funds, and fiduciary funds. <br /> Fund financial statements provide detailed information about each of the City's most significant funds, <br /> called major funds. The concept of major funds, and the determination of which are major funds, was <br /> established by GASB Statement 34 and replaces the concept of combining like funds and presenting them <br /> in total. Instead, each major fund is presented individually, with all non -major funds summarized and <br /> presented only in a single column. Subordinate schedules present the detail of these non -major funds. <br /> Major funds present the major activities of the City for the year, and may change from year to year as a <br /> result of changes in the pattern of the City's activities. <br /> Governmental fund financial statements are prepared on the modified accrual basis, which means they <br /> measure only current financial resources and uses. Capital assets and other long -lived assets, along with <br /> long -term liabilities, are not presented in the governmental fund financial statements. Unlike the <br /> government -wide financial statements, governmental fund financial statements focus on near -term <br /> inflows and outflows of spendable resources, as well as on balances of spendable resources available at <br /> the end of the fiscal year. Such information may be useful in evaluating the City's near -term financing <br /> requirements. <br /> Because the focus of governmental funds is narrower than that of the government -wide financial <br /> statements, it is useful to compare the information presented for governmental funds with similar <br /> information presented for governmental activities in the government -wide financial statements. By doing <br /> so, readers may better understand the long -term impact of the City's near -term financing decisions. Both <br /> the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, <br /> and changes in fund balances provide a reconciliation to facilitate this comparison between governmental <br /> funds and governmental activities. <br /> The City of Redwood City maintains 21 individual governmental funds. Information is presented <br /> separately in the governmental fund balance sheet and in the governmental fund statement of revenues, <br /> expenditures, and changes in fund balances for the general fund, the Housing Legal Aid Society Fund, and <br /> the capital outlay fund, which are considered to be major funds. Data from the other 18 governmental <br /> funds are combined into a single, aggregated presentation. Individual fund data for each of these non - <br /> major governmental funds is provided in the form of combining statements elsewhere in this report. <br /> The City of Redwood City adopts an annual appropriated budget for its general fund. A budgetary <br /> comparison statement has been provided for the general fund. <br /> The governmental fund financial statements may be found on pages 24 -27 of this report. <br /> 6 <br />