Unlike the private sector, governmental budgeting and financial reporting is based upon fund accounting. As defined by the Government Finance Officers Association, a fund is a "fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations."
Budgets for the City's proprietary funds (Enterprise Funds) are prepared on a full accrual basis where revenues are recognized when earned, and expenses are recognized when they are incurred.
Budgets for the City's fiduciary funds (Expendable Trust Funds and Agency Funds) are prepared on the basis consistent with the fund's accounting measurement objective. Both the City's Expendable Trust Funds and Agency Funds are prepared on a modified accrual basis.