village of wellington, florida

whether the financial position of the Village is improving or deteriorating. Other factors should beconsidered, however, such as the condition of capital assets (canals, bridges, buildings, etc.) to assessWellington’s overall health.The statement of activities presents information showing how the government’s net assets changed duringthe most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving riseto the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses arereported in this statement for some items that will only result in cash flows in future fiscal periods. Thegovernment-wide financial statements can be found on pages 13-15 of this report.Fund Financial StatementsTraditional users of governmental financial statements will find the fund financial statements presentationmore familiar. A fund is a grouping of related accounts that is used to maintain control over resources thathave been segregated for specific activities or objectives. The Village, like other state and local governments,uses fund accounting to ensure and demonstrate legal compliance with finance-related legal requirements.The Village’s funds can be divided into three categories: governmental funds, proprietary funds, and fiduciaryfunds. Governmental funds use different accounting approaches from proprietary and fiduciary funds.Basic services are reported in governmental funds, which focus on near-term inflows and outflows ofspendable resources and the balances of spendable resources available at year-end. These funds are reportedusing an accounting method called modified accrual accounting, which measures cash and all other financialassets that can readily be converted to cash. Governmental fund information helps the reader determinewhether there are more or fewer financial resources that can be spent in the near future to finance theVillage’s programs. Both the governmental fund balance sheet and the governmental fund statement ofrevenues, expenditures, and changes in fund balances provide a reconciliation to facilitate the comparisonbetween governmental funds and governmental activities.The fund financial statements provide detailed information about the most significant funds – not the Villageas a whole. Accordingly, four major funds are reported individually in the governmental funds balance sheetand statement of revenues, expenditures and changes in fund balances. The remaining governmental fundsare reported as a combined total. Major governmental funds for the year ended September 30, 2009 were theGeneral Fund, Planning, Zoning, and Building Special Revenue Fund, Recreation Programs Special RevenueFund, and the Capital Projects Fund. The basic governmental fund financial statements can be found onpages 16-21 of this report.Proprietary funds are used to account for revenues and expenses from services provided on a user-chargebasis to the public. Proprietary fund activities are reported on the same accounting basis and measurementfocus as the statement of net assets and the statement of activities. This is similar to that found in the privatesector and provides a periodic measurement of net income. Proprietary activities are accounted for inenterprise funds for water and wastewater operations and solid waste collection and recycling. The Village’smajor enterprise funds for the year ended September 30, 2009 were the Utility System Fund and the SolidWaste Fund. The basic proprietary fund financial statements can be found on pages 22-25 of this report.Fiduciary funds are used to account for resources held for the benefit of parties outside the government.Fiduciary funds are not reflected in the government-wide financial statements because the resources of thosefunds are not available to support the Village’s own programs. The accounting used for fiduciary funds ismuch like that used for proprietary funds. The basic fiduciary fund financial statements can be found onpages 26-27 of this report.Notes to the Financial StatementsThe notes provide additional information that is essential to a full understanding of the data provided in thegovernment-wide and fund financial statements. The notes to the financial statements can be foundbeginning on page 28 of this report.4