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<br /> ) .19 7)c.. <br /> City of San Marcos, Texas <br /> Exhibit 6 <br /> Notes to General Purpose Financial Statements (continued) <br /> September 30, 1992 <br /> 1. Significant Accounting Policies (continued) <br /> application of these criteria, the City has included its interest in the Hays County Drug <br /> Task Force in the City's reporting entity. The City participates in funding, on an annual <br /> basis, the activities of the Hays County Drug Task Force. The City, through the Chief of <br /> Police, exercises oversight of Task Force operations, expenditures, and assignment of <br /> personnel, who are employees of either Hays County or the City. The City's interest in <br /> the activities of the Task Force is reporte~ as part of the Public Safety function <br /> expenditures in the City's General Fund. <br /> Fund Accounting <br /> The City uses funds and account groups to report its fmancial position and the results of <br /> its operations. Fund accounting is designed to demonstrate legal compliance and to aid <br /> fmancial management by segregating transactions related to certain government functions. <br /> or activities. .. <br /> A fund is a separate accounting entity with a self-balancing set of aœounts. An account <br /> group, on the other hand, is a financial reporting device designed to provide <br /> accountability fOT certain assets and liabilities that are not recorded in the funds because <br /> they do not directly affect net expendable available financial resources. <br /> Funds are classified into three categories: governmental, proprietary, and fiduciary. <br /> Each category, in turn, is divided into separate "fund t)'Ue.s." <br /> , <br /> Governmental funds are used to account for all or most of a government's general <br /> activities, including the collection and disbursement of earmarked monies (special <br /> revenue funds), the acquisition or construction of general fixed assets (capital projects <br /> funds), and the servicing of general long-term debt (debt service funds). The general <br /> fund is used to account for all activities of the general government not accounted for in <br /> some other fund. <br /> Proprietary funds are used to account for activities similar to those found in the private <br /> sector, where the determination of net income is necessary or useful to sound fmancial <br /> administration. Goods or services from such activities are provided to outside parties <br /> (enterprise funds) as described in Note 10. <br /> - 13- <br />