The board receives county, state, and federal government funding and must adhere to the legal requirements of each funding entity. Private sector financial statements are taken as a whole. Governmental financial reporting focuses on grouping of various funds rather than as whole. Fund accounting developed from legal compliance and resource limitation issues. Spending Focus Private sector focuses on earnings and changes in business's total net resources.
Governments focus on changes in current spendable resources rather that total resources.
Government limitation has short-term focus typically on operating budget. Budgetary Reporting Private sector budget is simply a financial plan allowing for change and flexibility during fiscal year. Governmental budget is heart of a system of checks and balances with limited flexibility. The North Carolina School Budget and Fiscal Control Act mandates a uniform budget format and requires the adoption of an annual budget resolution for all funds except monies included within the expendable trust fund. Budgets are adopted on a basis consistent with GAAP, except for revenues and expenditures of the debt service fund which is included in the budget of the capital projects fund and the enterprise fund which is budgeted on the modified accrual basis.