AgdaPkt 2002-01-14 - Laserfiche WebLink

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REDEVELOPMENT AGENCY OF ~ CITY OF REDWOOD CITY Notes to Component Unit Financial Statements NOTE 1 - SUN[MARY OF SIGNIFICANT ACCOUNTING POLICH~S (Continued) ] Those revenues susceptible to accrual are interest and miscellaneous revenue. Expenditures are generally recognized when the related fund liability is incurred trader the modified accrual basis of accounting. An exception to this rule is principal and interest on general long-term debt, which is not recogmzed by debt serVice funds until it is due. Financial resources nsually are appropriated in funds responsible for repaying debt for transfer to a debt service fund in the period in which maturing debt principal and interest must be paid. Thus, the liability is recognized by the fund responsible for paying the debt, not the debt service fund. E. Budgetary Reporting and Budgetary Accounting The budgets of the Agency are primarily "long-feral" project length budgets which emphasize major programs and capital outlay plans extending over a number of years. The Agency follows these procedures in establishing the budgetary data reflected in the financial statements. 1. The Executive Director subrmts to the Agency Board a proposed operating budget for the fiscal year commencing the folloWing July 1. The operating budget includes proposed expenditures and means of financing them. 2. Public hearings are conducted to obtain taxpayer comments. 3. The budget is legally enacted through passage of a resolution. 4. The Executive Director is authorized to transfer budgeted amounts within a sub-program within a department however, any revisions that alter the totat expenditures must be approved by the Agency Board. 5. Formal budgetary integration is employed as a management control device during the year for all funds. Budgets for all funds are adopted on a basis consistent with generally accepted accounting principles (GAAP), except capital outlay expenditures are budgeted on a project length basis. Budget amounts are as originally adopted, or as amended by the Agency Board. Individual amendments were not material in relation to the original appropriations which were amended. F. Encumbrances Under encumbrance accounting, purchase orders, contracts and other commitments for the expenditure of momes are recorded in order to reserve that portion of the applicable appropriation. Encumbrance accounting is employed as an extension of formal budgetary integration in the Special Revenue and Capital Projects Funds. Encumbrances outstanding at year-end are reported as reservations of fund balance since they do not constitute expenditures or liabilities. Outstanding encumbrances at year end are automatically reappropr/ated the following year. Unencumbered and unexpended appropriations lapse at year end, except capital projects.