Accounting Procedures Handbook

13 FUND BALANCE such constraint in a current period would be required to have occurred no later than the close of that reporting period. Resources accumulated pursuant to stabilization arrangements are reported as “committed” funds. Our Board, as a member of the Wicomico County Public Entities (WCPE) Health Care Consortium, established a Rate Stabilization Fund (RSF). The minimum amount required in the Memorandum of Understanding for the WCPE Health Care Consortium is classified as committed fund balance. The members of the WCPE Health Care Consortium utilize the services of a consultant to manage the accounting for the RSF. Any amount in the RSF in excess of the committed amount (minimum required), is classified as “Assigned” fund balance since the funds can only be spent on expenditures related to Health Care costs for employees and retirees. D. Assigned Fund Balance The portion of fund balance that reflects a government’s intended use of resources. Such intent would have to be established at either the highest level of decision making, or by a body, or an official designated for that purpose. Less formality is necessary in the case of assigned fund balance in order to remove such a constraint on the assignment. Assigned fund balances for the Board consist of: • Health Care Rate Stabilization Reserve which is in excess of the minimum amount required by the MOU governing the WCPE Health Care Consortium and classified as Committed fund balance • Encumbrances – amounts representing open purchase orders as of the end of the reporting period • Subsequent year expenditures – the amount of unassigned fund balance from the prior period for the General Fund which has be appropriated by action of the Board through the passing of the annual General Fund Operating Budget for the current fiscal year E. Unassigned Fund Balance The portion of fund balance remaining after the establishment of the other components mentioned above. It represents the residual net resources of the Board. In accordance with State law the Board budgets this amount for the future year’s General Fund Operating budget.