City of Port St . Lucie , Florida Community Redevelopment Agency Notes to the Financial Statements For the Year Ended September 30 , 2021
NOTE 2 . STEWARDSHIP , COMPLIANCE , AND ACCOUNTABILITY ( CONTINUED )
A . BUDGET AND BUDGETARY ACCOUNTING ( CONTINUED )
f . Encumbrances - Under encumbrance accounting , purchase orders , contracts and other commitments for the expenditure of funds are recorded in order to reserve that portion of the applicable appropriation in the governmental funds . Encumbrances outstanding at year-end are reported as assigned fund balance for construction and long-term contracts and do not constitute expenditures or liabilities because the commitments will be honored during the subsequent year .
B .
FUND BALANCE / NET POSITION
The government-wide fund financial statements utilize a net positon presentation . Net position is categorized as net investment in capital assets , restricted , and unrestricted . The first category represents capital assets net of accumulated deprecations , less outstanding debt related to the acquisition or construction of the capital assets .
The restricted category , if any , represents the balance of assets restricted by requirements of revenue bonds and other externally imposed contraints or by legislation . Unrestriced net postion represents resources that are available for spending .
Fund balance classifications reflect not only the nature of the fund , but also provide clarity to the level of restriction placed upon fund balance . Fund balance can have different levels of restraint , such as external versus internal compliance requirements . Unassigned fund balance is limited to negative residual fund balance .
When both restricted and unrestricted fund balance are available , the CRA uses restricted amounts first . Furthermore , the CRA would first use committed , then assigned , and lastly unassigned amounts of unrestricted fund balance when expenditures are made .
In accordance with Governmental Accounting Standards Board Statement 54 , Fund Balance Reporting and Governmental Fund Type Definitions , the City classifies governmental fund balances as follows :
Nonspendable
Nonspendable fund balance includes amounts that cannot be spent because they are not in spendable form , such as inventories and prepaid amounts .
Spendable Fund Balance
Restricted - fund balance amounts that are constrained for specific purposes which are externally imposed through debt covenants or amounts constrained by federal and state law .
Committed - fund balance amounts that can only be used for the specific purposes that are internally imposed by CRA Board Ordinances . Commitments may be changed by the CRA Board amending or repealing the Ordinance that initially imposed the constraint . Contractual obligations are included to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual obligations .
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