What Is a Explicit Source of revenue Fund?
A singular source of revenue fund is an account established via a government to collect money that must be used for a specific challenge. Explicit source of revenue worth vary provide an extra stage of duty and transparency to taxpayers that their tax bucks will cross against an intended serve as.
Key Takeaways
• Explicit source of revenue worth vary are established via a government to collect money that must be used for a specific challenge.
• Municipalities maximum ceaselessly worth vary money proper right into a not unusual fund, capital fund, “rainy day” fund, and explicit source of revenue fund.
• The Government Accounting Necessities Board (GASB) issued Statement No. 54 in 2011 to stipulate explicit source of revenue worth vary.
How a Explicit Source of revenue Fund Works
Throughout the periodic worth vary process that every municipality goes by the use of, there are negotiations and battles over money—where does it come from, who gets it, and what kind of they get. There are 4 basic buckets of worth vary money to be allocated: not unusual fund, capital fund, “rainy day” fund, and explicit source of revenue worth vary.
The total fund can pay for usual and ongoing the town expenses; the capital fund is earmarked for massive duties, and the rainy day fund is the emergency account for surprising expenditures. A singular source of revenue fund is established to finance and carry out trustworthy smaller-scale duties. Parks, libraries, beaches, and the town plazas would in all probability all be financed via explicit source of revenue worth vary. The ones duties could have their own set of books for recording cash inflows and outflows.
The Government Accounting Necessities Board (GASB) issued Statement No. 54 in 2011, to give an explanation for the definition of explicit source of revenue worth vary, as there was once as soon as some ambiguity forward of. From the Statement: “Explicit source of revenue worth vary are used to account for and file the proceeds of specific source of revenue belongings which may well be restricted or devoted to expenditure for specified purposes versus debt supplier or capital duties.”
Example of a Explicit Source of revenue Fund
A the city might establish a unique source of revenue fund to pay expenses associated with stormwater keep an eye on. The money in this fund might best be used for stormwater keep an eye on costs, related to aspect street sweeping, drain and ditch cleaning, device maintenance, and a public awareness advertising marketing campaign. The city can also be required to publicly file at the position it gathered the precise source of revenue fund money from and how it spent the precise source of revenue fund’s worth vary.
