Question

Identify the types of funds and account groups in state and local government

Answer 1

State and local government generally have three broad categories of funds which are as follows :

a) Governmental Funds : A governmental fund is basically a grouping which is used by the federal government in accounting for tax-related matters and activities. There are several types of government funds out there including general, special revenue, debt-service, capital projects and permanent funds.

b) Proprietary Funds : Proprietary Funds usually involve following 2 types of funds :

i) Enterprise funds : These funds are responsible for providing goods / services to the general public for a consideration.

ii) Internal services funds : These funds basically deals with inter-department services which means services provided by one government department to another government department.

c) Fiduciary funds : Employee pension plans, employee provident funds etc. are classic examples of fiduciary funds which basically involves the funds of the government which are invested in a trust or agency.

State and local governments also have 2 other types of self-balancing account groups which are known as general fixed assets and general long-term debts. These are not funds. These do belong to the government but they represent assets and liabilities which do not belong to any specific fund.