Funds

1.0 General Information

1.1 Statutory References

Sections 4-31a (b), 4-69 (2), (24), (33) and (34).

1.2 General Definition

A fund is defined as a financial 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.

Connecticut State accounting is organized and operated on a fund basis. The State's financial statements and reports, must show how money is spent, rather than how much profit was earned. State reporting details the expenditures and revenues for each of the State's individual funds, and generates reports that summarize the State's financial activities across all of its funds.

Funds have a five digit code in the ranges indicated. To see the specific code for each fund: http://osc.ct.gov/StateAcct/sam/coding/fund_index.htm

1.3 Governmental Funds

General Fund: 11000 Special Revenue Funds: 12001 - 12068 Non-Capital Improvements & Other Projects Funds: 13001 - 13048 Debt Service Funds: 14001 - 14006 Capital Improvement and Other Purpose Funds: 17001 - 17991+

Proprietary Funds

Enterprise Funds: 21001 - 21023 Internal Service Funds: 22001 - 22004

Fiduciary Funds

Pension Funds: 31001 - 31012 Agency Funds: 34001 - 34010 Other Trust Funds: 35001 - 35016 Private Purpose Trust Fund: 91503 - 93405 Political Sub-Division Fund: P-1000

2.0 Specific Funds Defined

2.1 General Fund - 11000

This fund accounts for the general operations of the State of Connecticut. All revenues and financing sources all expenditures and other uses of these resources not required to be accounted for in another fund are accounted for in the General Fund.

2.2 Special Revenue Funds - 12001

These funds account for the proceeds of specific revenue and other financing sources (other than expendable trusts, or for major capital projects) that are legally restricted to expenditure for specified purposes.

2.3 Debt Service Funds - 14001

These funds account for the accumulation of resources for, and the payment of, long term debt principal and interest.

2.4 Capital Project Funds - 13001 + 17001

These funds account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and trust funds).

2.5 Enterprise Funds - 21001

These funds account for operations (a) that are financed and operated in a manner similar to private business enterprises--where the intent is that costs of providing goods or services primarily or solely to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes.

2.6 Internal Service Funds - 22001

These funds account for the financing of goods or services provided by one department or agency primarily or solely to other departments or agencies of the State, or to other governmental units, on a cost-reimbursed basis. These funds are authorized to use special asset profiles with a prefix of IS to facilitate their reporting needs.

2.7 Pension Trust Funds - 31001

Pension trust funds account for the various pension plans administered and funded by the State of Connecticut.

2.8 Agency Funds - 34001

These funds account for assets held by the State as an agent for individuals or government units. In the future these assets will be transferred to other state funds or to sources outside the State.

From the foregoing definitions it follows that Agency Funds cannot be used to record revenue or expenditures of the State of Connecticut. State revenue will be recorded as such when it is transferred from an Agency Fund to the General Fund or to other than another Agency Fund.

Agency funds are also used for pension funds administered but not funded by the State. These include Municipal Retirement and Probate Judges and Employees.

2.9 Other Trust Funds - 35001

These funds account for trusts whose principal and interest may be expended in the course of their designated operations.

2.10 Private Purpose Trust Funds - 91503

Those trust funds whose principal must be preserved intact.

2.11 Special Local Funds

A. CGS Sec. 4-53 and 4-56

Some agencies or departments maintain funds, and records thereof, that are separate from the regular State funds and records. Receipts for these funds are deposited in separate bank accounts and the records are maintained at the agency or department level only. These "special local funds" are usually maintained for the benefit of patients, inmates, students, or employees of state operated facilities.

B. CGS Sec. 4-31a

All gifts, donations, or bequests, not made for the group benefit of all students, inmates, or patients of a state facility shall, unless exempted by statutes, be entered upon the records of the general fund. Such receipts shall not be entered in the records of a "special local fund.

2.12 Accounting Procedures Manual for Activity and Welfare Funds

The Comptroller's office maintains an Accounting Procedures Manual for Activity and Welfare funds. All types of "special local funds" authorized by the Comptroller, must maintain adequate records to show all receipts and disbursements, and any other information that is necessary to provide full details on operations. All "special local funds" are subject to audit by the Auditors of Public Accounts.

Instructions for maintaining Petty Cash Funds, which are "special local funds," are contained in the Miscellaneous Section of the Accounting Procedures Manual for Activity and Welfare funds.

There are detailed instructions for opening a bank account and endorsing checks in the Receipts section of this manual. See the Receipts section, paragraph 2.1 for information on opening a bank account, and paragraph 2.3 for methods of endorsing checks.

Bank Deposit Tickets for checking accounts should be completed in duplicate. Have the duplicate ticket receipted by the bank and retain it with the fund records.

In the event of a Bad Check Charge-Back, the bank will notify the custodian of the "special local fund" of the reduction in the bank balance. The fund records should be adjusted accordingly for such reductions. It is the responsibility of the agency or department to take the necessary action to secure repayment of the check or to cancel any credit recorded to an individual's account for the amount involved.

3.0 Establishing New Funds

It is the policy of the Comptroller to discourage the establishment of new State funds unless absolutely necessary or required by statute.

The following is a Statement of Principle - Number of Funds issued by the Governmental Accounting Standards Board:

"Governmental units should establish and maintain those funds required by law and sound financial administration. Only the minimum number of funds consistent with legal and operating requirements should be established, however, since unnecessary funds result in inflexibility, undue complexity, and inefficient financial administration."

In those instances where a new fund is not authorized by statute but is determined to be administratively required, the Comptroller may request approval from the Governor to establish a fund under Section 4-31a(b). The agency concerned should send a written request to the Comptroller stating the purpose of the fund, the source of receipts, and an estimate of the size and duration of the fund. The Comptroller will request approval from the Governor.