2002 Comprehensive Annual Financial Report

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C[TY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) III. Stewardship, Compliance and Accountability A. Budgetary Information Annual budgets are adopted on the cash basis which is not consistent with accounting principles generally accepted in the United States. All annual appropriations lapse at fiscal year end. On or before August 31, the City Controller submits to the Common Council a proposed operating budget for the year commencing the following January 1. Prior to adoption, the budget is advertised and public hearings are conducted by the Common Council to obtain taxpayer comments. In Septem- ber ofeach year, the Common Council through the passage of an ordinance approves the budget for the next year. Copies of the budget ordinance and the advertisement for funds for which property taxes are levied or highway use taxes are received are sent to the Indiana Department of Local Gov- ernment Finance. The budget becomes legally enacted after the City Controller receives approval of the Indiana Department of Local Government Finance. The government's management cannot transfer budgeted appropriations between object classi- fications of abudget without approval of the Common Council. The Indiana Department of Local Gov- ernment Finance must approve any revisions to the appropriations for any fund or any department of the General Fund. The legal level of budgetary control is by object and department within the fund for the General Fund and by object within the fund for all other budgeted funds. Expenditures did not exceed appropriations for any funds or any departments within the General Fund or within the Park and Recreation Fund which required legally, approved budgets. B. Deficit Fund Equity At December 31, 2002, the following funds reported deficits in fund equity: Deficit Governmental funds: Studebaker Oliver Revitalization Grants $ (250,313) Football Hall of Fame Operating (1,747,692) Enterprise funds: Blackthorn Golf Course (694,417) Internal service funds Self-Funded Employee Benefits (825,480) Fund equity deficits arose primarily from expenditures or expenses exceeding revenues due to the underestimate of fund requirements. It is anticipated that these deficits will be repaid from future reve- nues. IV. Detailed Notes on All Funds A. Deposits and Investments Deposits, made in accordance with IC 5-13, with financial institutions in the State of Indiana at year end were entirely insured by the Federal Depository Insurance Corporation or by the Indiana Public Deposit Insurance Fund. This includes any deposit accounts issued or offered by a qualifying finan- cial institution. 36