Enterprise Funds
Enterprise funds may be used to report any activity for which a fee is charged to external users for goods or services. Governments should apply each of these criteria in the context of the activity’s principal revenue source. Activities are required to be reported as enterprise funds if any one of the following criteria is met:
- The activity is financed by debt that is secured solely by a pledge of the net revenues from fees and charges of the activity. Debt that is secured by a pledge of net revenues from fees and charges and the full faith and credit of a related primary government or component unit--even if that government is not expected to make any payments--is not payable solely from fees and charges of the activity (Some debt may be secured, in part, by a portion of its own proceeds but should be considered as payable “solely” from the revenues of the activity).
- Laws or regulations require that the activity’s costs of providing services, including capital costs (such as depreciation or debt service), be recovered with fees and charges, rather than with taxes or similar revenues.
- The pricing policies of the activity establish fees and charges designed to recover its costs, including capital costs (such as depreciation or debt service) (GASB Statement 34, Paragraph 67).
The cash and investments of enterprise funds are subject to the requirements of 1943 PA 20, MCL 129.91, and may be included in a pooled cash and investment account.
All claims (expenses) must be approved by the governing body of the local unit of government pursuant to statutory requirements as follows: Cities--1895 PA 215, MCL 87.7, MCL 88.20; Villages--1895 PA 3, MCL 65.7; Townships--Revised Statutes of 1846, MCL 41.75; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63.
505-Ambulance Fund
The Ambulance Fund is used in counties, cities, villages, and townships to account for ambulance services primarily intended to be self-sustaining through user charges.
Special Revenue Fund Number 210 should be used if the Ambulance Fund is not intended to be self-sustaining through user charges. Activity Number 651, Ambulance, should be used if the ambulance service is funded with General Fund revenue.
Capital assets and depreciation are recorded within this fund.
The cash and investments of the Ambulance Fund are subject to the requirements of 1943 PA 20, MCL 129.91, and may be included in a pooled cash and investment account.
All claims (expenditures) must be approved by the city or village council or the county or township board pursuant to: Cities--1895 PA 215, MCL 87.7, MCL 88.20; Villages--1895 PA 3, MCL 65.7; Townships--Revised Statutes of 1846, MCL 41.75; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63.
508-Park/Recreation Fund
The Park/Recreation Fund is used to account for the operation and maintenance of a park or recreation program whose primary source of revenue is user charges. However, a tax levy for the purpose of providing park or recreation activities authorized by a vote of the electors of a local unit of government may also be a secondary source of the fund’s revenue.
The fund is used in counties to account for the operation of parks under the authority of a park board made up of the road commissioners or a ten-member board created pursuant to 1965 PA 261, MCL 46.351 et seq. Other statutory authority for counties is 1905 PA 157, MCL 123.61.
Special Revenue Fund Number 208 should be used if the park is not intended to be self-sustaining through user charges. General Fund Activity Number 751, Parks and Recreation Department should be used if the park/recreation service is funded with General Fund revenue.
The cash and investments of the Park/Recreation Fund are subject to the requirements of 1943 PA 20, MCL 129.91, and may be included in a pooled cash and investment account.
All claims (expenditures) must be approved by the city or village council or county or township board pursuant to: Counties--1851 PA 156, MCL 46.11(g); County Park board--1965 PA 261, MCL 46.351 et seq.; Cities--1895 PA 215, MCL 87.7, MCL 88.20; Villages--1895 PA 3, MCL 65.7; Townships--Revised Statutes of 1846, MCL 41.75.
511-Hospital Operating Fund
This fund is used to record the operation of a local unit owned hospital. It is a self-balancing fund which does business with individuals or firms outside the local unit and is, therefore, classified as an Enterprise Fund.
This fund can be found in county and city government. It is used to record the revenues and expenditures for the operation of a hospital owned by the local unit. The hospital will use the chart of accounts prescribed by the American Hospital Association.
Capital assets and depreciation are recorded within this fund.
The establishment and authorization of this fund is normally accomplished by a vote of the people or a resolution of the legislative body.
Money for the operation of this fund is supplied by a loan or a grant from the General Fund or revenues from services rendered. The cash and investments of this fund are subject to the requirements of 1943 PA 20, MCL 129.91, and may be included in a pooled cash and investment account.
512-Medical Care Facility Fund
The Medical Care Facility Fund is used to account for funds raised for operating and maintaining a long-term care facility. The fund is usually found in counties and is used to account for the operation of a medical care facility under the authority of the county family independence agency board 1939 PA 280, MCL 400.45.
The cash and investments of the Medical Care Facility Fund are subject to the requirements of
1943 PA 20, MCL 129.91, and may be included in a pooled cash and investment account.
Capital assets and depreciation are recorded within this fund.
All claims (expenses) must be approved by the county family independence agency board.
514-Parking System Fund
The Parking System Fund is used to record the operation of a parking lot. It is a self-supporting fund which does business with individuals and firms outside the local unit departments and is, therefore, classified as an Enterprise Fund.
This fund is usually found in cities and counties. It is used to record the revenues and expenses for the operation of a local unit owned parking lot. Capital assets and depreciation are recorded within this fund.
The establishment and authorization of this operation is accomplished by a resolution of the local unit legislative body or by special vote of the people. If some of the capital assets of this fund are purchased from the sale of revenue bonds, the proceeds and the bond retirement are also accounted for in this fund. If revenue bonds have been sold, the accounting for them is prescribed by the Revenue Bond Act of 1933.
The Parking Meter/System Fund Number 231 (Special Revenue Fund) should be used if the only revenue received is from parking meters.
Money for the operation of this fund is supplied by a loan or advance from the General Fund, proceeds from the sale of revenue bonds (used for the purchase of capital assets) and parking fees.
The cash and investments of the Parking System Fund are subject to the requirements of 1943 PA 20, MCL 129.91, and may be included in a pooled cash and investment unless restricted by bond ordinance or authorizing resolution.
All claims (expenditures) must be approved by the city or village council or the county or township board pursuant to: Cities--1895 PA 215, MCL 87.7, MCL 88.20; Villages--1895 PA 3, MCL 65.7; Townships--Revised Statutes of 1846, MCL 41.75; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63.
515-Disposal System Fund
This fund is used to record the operations of a sewage disposal system. It is a self-supporting fund which does business with individuals and firms outside the local unit departments and is, therefore, classified as an Enterprise Fund.
The Disposal System Fund can be found in any local unit of government. It is used to record the revenues and expenses for the operation of solid waste or a sanitary waste system. Capital assets and depreciation are recorded within this fund.
The establishment and the authorization of this operation are accomplished by a resolution of the local unit’s legislative body. If some of the capital assets of this fund are purchased from the sale of revenue bonds, the proceeds and the bond retirement are accounted for in this fund. If bonds have been sold, the accounting is dictated by the Revenue Bond Act of 1933.
Activity Number 527, Sewage Disposal, in the General Fund, should be used if the disposal system is totally financed by the General Fund.
Money for the operation of this fund is supplied by the sale of revenue bonds for the purchase of capital assets and revenues from charges for services.
The cash and investments of the Disposal System Fund are subject to the requirements of 1943 PA 20, MCL 129.91, and may be included in a pooled cash and investment unless restricted by a bond ordinance or authorizing resolution.
All claims (expenditures) must be approved by the city or village council or the county or township board pursuant to: Cities--1895 PA 215, MCL 87.7, MCL 88.20; Villages--1895 PA 3, MCL 65.7; Townships--Revised Statutes of 1846, MCL 41.75; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63.
516-Delinquent Tax Revolving Fund
The Delinquent Tax Revolving Fund may be established by resolution by the county board of commissioners pursuant to 1893 PA 206, MCL 211.87b. This fund must be segregated into separate funds or accounts for each year’s delinquent taxes. Each year’s separate fund or accounts continue in existence until the delinquent taxes for that tax year have been collected and the county board of commissioners transfers any surplus to the county’s general fund in accordance with MCL 211.87b(7). The county retains all delinquent taxes, and interest and penalties collected to offset its tax collection costs.
The surplus earned, after any borrowing is paid off, is under the control of the board of commissioners. The surplus may be accumulated to reduce or avoid future borrowings or expended for other purposes as authorized by the board of commissioners.
The Delinquent Tax Revolving Fund accounts for money either advanced by a county’s General Fund or by the issuance of general obligation limited tax notes to purchase other taxing units and various county funds delinquent taxes (see Numbered Letter 2001-5).The cash and investments of the Delinquent Tax Revolving Fund are subject to the requirements of 1943 PA 20, MCL 129.91, and may be included in a pooled cash and investment unless restricted by a bond ordinance or authorizing resolution.
1893 PA 206, MCL 211.87b(2) states, “If a delinquent tax revolving fund is established, the county treasurer shall be the agent for the county, on behalf of the taxing units in the county and this state, and, without further action by the county board of commissioners, may enter into contracts with other municipalities, this state, or private persons, firms, or corporations in connection with any transaction relating to the fund or any borrowing made by the county pursuant to section 87c or 87d, including all services necessary to complete this borrowing.”
517-Sanitary Landfill Fund
The Sanitary Landfill Fund is used in counties, cities, villages, and townships to account for the operation of a sanitary landfill whose primary source of revenue is user charges. However, a tax levy for the purpose of operating a sanitary landfill authorized by a vote of the electors of the local unit of government may be a secondary source of revenue.
The Michigan Department of Treasury requires this fund in those units that levy a special voted tax for a sanitary landfill.
Special Revenue Fund Number 227, Sanitary Landfill Fund, should be used if the sanitary landfill’s primary source of revenue is a voted tax levy. General Fund Activity Number 526, Sanitary Landfill, should be used if the sanitary landfill is funded by General Fund revenue
The cash and investments of the Sanitary Landfill Fund are subject to the requirements of 1943 PA 20, MCL 129.91, and may be included in a pooled cash and investment account.
All claims (expenditures) must be approved by the city or village council, or county or township board pursuant to: Cities--1895 PA 215, MCL 87.7, MCL 88.20; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301,
MCL 46.63; Villages--1895 PA 3, MCL 65.7; Townships--Revised Statutes of 1846, MCL 41.75.
535-Housing Commission Fund
The Housing Commission Fund can be used in counties, cities, villages, and townships to account for the operations of a housing commission established under the authority of 1933 PA 18 (Ex. Session), MCL 125.651 to MCL 125.709b. This is a self-supporting fund which does business with individuals or firms outside the local unit departments and is, therefore, classified as an Enterprise Fund.
This fund is usually found in city government. It is used to record the revenues and expenses for the operation of a housing commission. Capital assets are recorded within the fund and depreciation will be charged. The establishment and authorization of this operation is accomplished by ordinance of the legislative body, MCL 125.653.
Money for the operation of this fund is supplied by rents from the people living in the housing, an advance from the General Fund, and grants.
The cash and investments of the Housing Commission Fund are subject to the requirements of 1943 PA 20, MCL 129.91, and may be included in a pooled cash and investment account. All claims (expenses) must be approved by the city or village council, or county or township board pursuant to: Cities--1895 PA 215, MCL 87.7, MCL 88.20; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63; Villages--1895 PA 3, MCL 65.7; Townships--Revised Statutes of 1846, MCL 41.75.
536-Land Bank Fund
This fund may be used to record activities for land bank operations. Special revenue fund 283 is also available for land bank activities. Local governments may choose to use either fund for the activities or consult their auditors.
541-Forestry Fund
The Forestry Fund is used to record the operations of the forestry department as authorized by 1994 PA 451, MCL 324.50701 to MCL 324.50707. This is a self-supporting fund which does business with individuals or firms outside the local unit departments and is, therefore, classified as an Enterprise Fund.
This fund is usually found in county government. It is used to record the revenues and expenses for the operation of a forestry department. Capital assets and depreciation are recorded within this fund. The establishment and authorization of this operation is accomplished by a resolution of the legislative body.
Money for the operation of this fund is supplied by a loan or advance from the General Fund and revenues received from the sale of timber.
All claims (expenditures) must be approved by the county board pursuant to: Counties–1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63.
549-Building Department Fund
The Building Department Fund may be used in any county, city, village, or township to account for revenues earmarked for building construction code enforcement activities. The fund is required by Section 22(1) of 1972 PA 230, MCL 125.1522(1).
The Building Department Fund is used to account for the receipts and expenses related to the cost of operating the enforcing agency under the provisions of the State Construction Code Act. Typically, the enforcing agency is the building department or planning department issuing building permits, examining plans and specifications, inspecting construction before issuing building permits, and issuing certificates of use and occupancy. The use of fees generated under this act can only be used for the operation of the enforcing agency, construction board of appeals, or both, and shall not be used for any other purpose.
Special Revenue Fund Number 249, Building Department Fund, may be used if the building department is not intended to be self-sustaining through user charges or General Fund Activity Number 371, Building Inspection Department, may be used if the building department is funded by General Fund revenue. Use of an activity in the General Fund requires specific financial statement note disclosures that demonstrate that the activity is not self-sustaining.
The cash and investments of the Building Department Fund are subject to the requirements of 1943 PA 20, MCL 129.91, and may be included in a pooled cash and investment account.
All claims (expenses) must be approved by the legislative board or council pursuant to:
Cities--1895 PA 215, MCL 87.7, MCL 88.20; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63; Villages--1895 PA 3, MCL 65.7; Townships--Revised Statutes of 1846, MCL 41.75.
551-Markets Fund
The Markets Fund is used to record the operation of a “farmers market.” This is a self-supporting fund which does business with individuals and firms outside the local unit departments and therefore is classified as an Enterprise Fund.
This fund is usually found in city government as authorized by 1895 PA 215, MCL 99.1. However, a village, as authorized by 1895 PA 3, MCL 67.41, may also maintain a farmer’s market. It is used to record the revenues and expenses for the operation of a farmer’s market. Capital assets and depreciation are recorded within this fund. The establishment and authorization for this operation is accomplished by a resolution of the legislative body.
Money for the operation of this fund is supplied by a loan or advance from the General Fund and revenues from the rent charged the users of the market. The money which accumulates in the unrestricted net position account of this fund may or may not be transferred to another fund depending on whether or not it is provided for by the legislative body.
All claims (expenses) must be approved by the legislative board or council pursuant to:
Cities--1895 PA 215, MCL 87.7, MCL 88.20; Villages--1895 PA 3, MCL 65.7.
561-Fair Board Fund
The Fair Board Fund is used to record the operations of a county fair as authorized by 1929 PA 11, MCL 46.151 to MCL 46.153. This is a self-supporting fund which does business with individuals and firms outside the local unit departments and is, therefore, classified as an enterprise fund.
This fund is usually found in county government. It is used to record the revenues and expenses for the operation of a county fair. Capital assets and depreciation are recorded within this fund. The establishment and authorization of this operation is accomplished by a resolution of the legislative body.
Money for the operation of this fund is supplied by a loan or transfer from the General Fund and revenues from rents, admission charges, and parking fees. The money which accumulates in the unrestricted net position account of this fund may or may not be transferred to another fund depending on whether or not it is provided for by the legislative body.
All claims (expenditures) must be approved by the county board pursuant to: Counties–1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63.
565-Public Works Operation and Maintenance Fund (1957 PA 185 And 1939 PA 342 For Other Local Units)
The Public Works Operation and Maintenance Fund may be found in a county and is used to account for the activity of water and sewer systems when the county acts as the financing source for a local unit of government. The fund is used to record the operations of the water systems, sewer systems, or other DPW projects by a county (authority) for other units of government.
A county issues debt in its name (generally under 1957 PA 185 or 1939 PA 342; sometimes Chapter 20 of 1956 PA 40, MCL 280.461, is used for sanitary sewage systems). There is a lease with the local unit whereby the local unit agrees to lease the asset over the life of the bonds (often the lease payment is equal to Debt Service requirements of the county bonds). Common variations of this scenario are as follows:
- The county issues the debt and turns the proceeds over to the local unit. The local unit constructs and operates the system.
- The county issues the debt and constructs the system. The local unit(s) operates the system.
- The county issues the debt, constructs the system, and operates it on behalf of the local unit.
Specific financial reporting guidelines are contained in Numbered Letter 2002-08.
The cash and investments of the fund are subject to the requirements of 1943 PA 20, MCL 129.91.
All claims (expenditures) must be approved by the county board pursuant to: Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63.
569-Building Authority Fund
The Building Authority Fund is used in counties, cities, and urban townships to account for the operation of public facilities by a building authority board established under the authority of
1948 PA 31, MCL 123.951 to MCL 123.965.
The Michigan Department of Treasury requires this fund in those units that establish a building authority to operate public facilities.
If a building authority is established to issue debt and construct facilities, without continuing operation, the appropriate Debt Service and Capital Project Funds must be established rather than this fund.
The cash and investments of the Building Authority Fund are subject to the requirements of
1943 PA 20, MCL 129.91, and may be included in a pooled cash and investment account. All claims (expenses) must be approved by the legislative board or council pursuant to:
Cities--1895 PA 215, MCL 87.7, MCL 88.20; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63; Townships--Revised Statutes of 1846, MCL 41.75.
581-Airport Fund
The Airport Fund is used to record the operations of an airport. This is a self-supporting fund which does business with individuals and firms outside the local unit departments and is, therefore, classified as an Enterprise Fund.
This fund is found in county and city government. It is used to record the revenues and expenses for the operation of an airport owned by the local unit or an airport authority. Capital assets and depreciation are recorded within this fund.
The establishment and authorization of the fund is accomplished by resolution of the legislative body. Bond proceeds and the bond retirement are also accounted for in this fund if some of the capital assets of this fund are purchased from the sale of revenue bonds. The accounting for the issuance of revenue bonds is provided for by the Revenue Bond Act of 1933.
Money for the operation of this fund is supplied by the sale of bonds for the purchase of capital assets, appropriation from the General Fund, hangar rentals, landing use fees, and other rentals or service charges.
All claims (expenses) must be approved by the legislative board or council pursuant to:
Cities--1895 PA 215, MCL 87.7, MCL 88.20; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63.
582-Electrical Utility Fund
The Electrical Utility Fund is used to record the operations of an electrical utility. This is a self-supporting fund which does business with individuals and firms outside the local unit departments and is, therefore, classified as an Enterprise Fund.
This fund can be found in any local unit of government. It is used to record the revenues and expenses for the operation of an electrical utility owned by the local unit. Capital assets and depreciation are recorded within this fund.
The establishment and authorization of this operation is accomplished by a resolution of the governing body or a special vote of the people. Bond proceeds and the bond retirement are also accounted for in this fund if some of the capital assets of this fund are purchased from the sale of revenue bonds. The accounting for the issuance of revenue bonds is provided for by the Revenue Bond Act of 1933.
Money for the operation of this fund is supplied by the sale of revenue bonds for the purchase of capital assets and charges to customers for services.
All claims (expenses) must be approved by the legislative board or council pursuant to:
Cities--1895 PA 215, MCL 87.7, MCL 88.20; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63; Villages--1895 PA 3, MCL 65.7; Townships--Revised Statutes of 1846, MCL 41.75.
583-Gas Utility Fund
The Gas Utility Fund is used to record the operations of a gas utility. This is a self-supporting fund which does business with individuals and firms outside the local unit departments and is, therefore, classified as an Enterprise Fund.
The Gas Utility Fund can be found in any local unit of government. It is used to record the revenues and expenses for the operation of a gas utility. Capital assets and depreciation are recorded within this fund.
The establishment and authorization of this operation is accomplished by a resolution of the legislative body or by a special vote of the people. Bond proceeds and the bond retirement are also accounted for in this fund if some of the capital assets of this fund are purchased from the sale of revenue bonds. The accounting for the issuance of revenue bonds is provided for by the Revenue Bond Act of 1933.
Money for the operation of this fund is supplied by bond proceeds from the sale of revenue bonds for the purchase of capital assets and revenue from customers for services rendered.
All claims (expenses) must be approved by the legislative board or council pursuant to:
Cities--1895 PA 215, MCL 87.7, MCL 88.20; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63; Villages--1895 PA 3, MCL 65.7; Townships--Revised Statutes of 1846, MCL 41.75.
584-Golf Course Fund
This fund is used to record the operations of a golf course. It is a self-supporting fund which does business with individuals and firms outside the local unit departments and is therefore classified as an Enterprise Fund.
This fund is usually found in city or county government. It is used to record the revenues and expenses for the operation of a golf course owned by the local unit. Capital assets and depreciation are recorded within this fund.
The establishment and authorization of this operation is accomplished by a resolution of the legislative body or by a special vote of the people. Bond proceeds and the bond retirement are also accounted for in this fund if some of the capital assets of this fund are purchased from the sale of revenue bonds. The accounting for the issuance of revenue bonds is provided for by the Revenue Bond Act of 1933.
Money for the operation of this fund is supplied by a loan or advance from the General Fund, bond proceeds from the sale of revenue bonds for the purchase of capital assets and revenue from green fees, sales, or other service charges.
All claims (expenses) must be approved by the legislative board or council pursuant to:
Cities--1895 PA 215, MCL 87.7, MCL 88.20; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63.
586-Port Authority Fund
This fund is used to record the operations of a port authority. It is a self-supporting fund which does business with individuals and firms outside the local unit departments and is, therefore, classified as an Enterprise Fund.
This fund is usually found in county or city government as authorized by 1978 PA 639,
MCL 120.101 to MCL 120.130. It is used to record the revenues and expenses for the operation of a local unit owned port authority. Capital assets and depreciation are recorded within this fund.
The establishment and authorization of this operation is accomplished by a resolution of the legislative body or by a special vote of the people. Bond proceeds and the bond retirement are also accounted for in this fund if some of the capital assets of this fund are purchased from the sale of revenue bonds. The accounting for the issuance of revenue bonds is provided for by the Revenue Bond Act of 1933.
Money for the operation of this fund is supplied by a loan or advance from the General Fund, charges for services or bond proceeds.
All claims (expenses) must be approved by the legislative board or council pursuant to:
Cities--1895 PA 215, MCL 87.7, MCL 88.20; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63.
587-Swimming Pool Fund
The Swimming Pool Fund is used to record the operations of a swimming pool. This is a self-supporting fund which does business with individuals and firms outside the local unit departments and is, therefore, classified as an Enterprise Fund.
This fund is usually found in city government. It is used to record the revenues and expenses for the operation of a local unit owned swimming pool. Capital assets and depreciation are recorded within this fund.
A swimming pool may be an activity of the General Fund or Park/Recreation Fund (between Activity Numbers 751 and 849) if the swimming pool is totally financed by the General Fund or Park/Recreation Fund.
The establishment and authorization of this operation is accomplished by a resolution of the legislative body or by a special vote of the people. Bond proceeds and the bond retirement are also accounted for in this fund if some of the capital assets of this fund are purchased from the sale of revenue bonds. The accounting for the issuance of revenue bonds is provided for by the Revenue Bond Act of 1933.
Money for the operation of this fund is supplied by a loan or appropriation from the General Fund, fees from the use of the pool or bond proceeds.
All claims (expenses) must be approved by the legislative board or council pursuant to:
Cities--1895 PA 215, MCL 87.7, MCL 88.20.
588-Transportation System Fund
The Transportation System Fund may be used in counties, cities, villages and townships to account for the operation of a public transportation system established under the authority of 1963 PA 55, providing for mass transportation system authorities, MCL 124.351 to MCL 124.359; 1967 PA 204, the Metropolitan Transportation Authority’s Act of 1967, MCL 124.401 to MCL 124.426; 1986 PA 196, the Public Transportation Authority Act, MCL 124.451 to MCL 124.479; 1951 PA 51, MCL 247.651 to MCL 247.675, and federal statutes.
Capital assets and depreciation are recorded within this fund.
The cash and investments of the Transportation Fund, except as established pursuant to MCL 124.451, are subject to the requirements of 1943 PA 20, MCL 129.91, and may be included in pooled cash and investment accounts. The cash and investments of a Transportation System Fund established pursuant to MCL 124.451 are subject to the requirements in MCL 124.476.
All claims (expenses) must be approved by the legislative board or council pursuant to:
Cities--1895 PA 215, MCL 87.7, MCL 88.20; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63; Villages--1895 PA 3, MCL 65.7; Townships--Revised Statutes of 1846, MCL 41.75.
589-Auto Ferry Fund
The Auto Ferry Fund is used to record the operations of an auto ferry service. This is a self-supporting fund which does business with individuals or firms outside the local unit departments and is, therefore, classified as an enterprise fund.
This Auto Ferry Fund is usually found in city government as authorized by 1895 PA 215, MCL 91.1, or county government as authorized by 1943 PA 150, MCL 255.51. It is used to record the revenues and expenses for the operation of an auto ferry service. This fund will have the capital assets and depreciation recorded within the fund.
The establishment and authorization of this operation is accomplished by a resolution of the legislative body or by a special vote of the people. Bond proceeds and the bond retirement are also accounted for in this fund if some of the capital assets of this fund are purchased from the sale of revenue bonds. The accounting for the issuance of revenue bonds is provided for by the Revenue Bond Act of 1933.
Money for the operation of this fund is supplied by a loan or advance from the General Fund, fares for the use of the boats, or bond proceeds.
All claims (expenses) must be approved by the governing body of the local unit of government pursuant to statutory requirements as follows: Cities--1895 PA 215, MCL 87.7, MCL 88.20; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63.
590-Sewer Fund
This fund can be found in any local unit. It is used to record the revenues and expenses for the operation of a sewer system. Capital assets and depreciation are recorded within this fund. The fund is established by a resolution of the local unit’s governing body or by a vote of the people and subsequent resolution of the local unit’s governing body. The accounting procedures for the issuance of revenue bonds are prescribed by the Revenue Bond Act of 1933.
The cash and investments of the Sewer Fund are subject to the requirements of 1943 PA 20, MCL 129.91, and may be included in a pooled cash and investment unless restricted by the bond ordinance or authorizing resolution.
All claims (expenses) must be approved by the governing body of the local unit of government pursuant to statutory requirements as follows: Cities--1895 PA 215, MCL 87.7, MCL 88.20; Villages--1895 PA 3, MCL 65.7; Townships--Revised Statutes of 1846, MCL 41.75; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63.
591-Water Fund
This fund can be found in any local unit. It is used to record the revenues and expenses for the operation of a water system. Capital assets and depreciation are recorded within this fund.
The fund is established by a resolution of the local unit’s governing body or by a vote of the people and subsequent resolution of the local unit’s governing body. The accounting procedures for the issuance of revenue bonds are prescribed by the Revenue Bond Act of 1933.
The cash and investments of the Water Fund are subject to the requirements of 1943 PA 20, MCL 129.91, and may be included in a pooled cash and investment account unless restricted by the bond ordinance or authorizing resolution.
All claims (expenses) must be approved by the governing body of the local unit of government pursuant to statutory requirements as follows: Cities--1895 PA 215, MCL 87.7, MCL 88.20; Villages--1895 PA 3, MCL 65.7; Townships--Revised Statutes of 1846, MCL 41.75; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63.
592-Water And Sewer Fund
This fund can be found in any local unit. It is used to record the revenues and expenses for the operation of a combined water and sewer system. Capital assets and depreciation are recorded within this fund.
The fund is established by a resolution of the local unit’s governing body or by a vote of the people and subsequent resolution of the local unit’s governing body. The accounting procedures for the issuance of revenue bonds are prescribed by the Revenue Bond Act of 1933.
The cash and investments of the Water and Sewer Fund are subject to the requirements of 1943 PA 20, MCL 129.91, and may be included in a pooled cash and investment account unless restricted by the bond ordinance or authorizing resolution.
All claims (expenses) must be approved by the governing body of the local unit of government pursuant to statutory requirements as follows: Cities--1895 PA 215, MCL 87.7, MCL 88.20; Villages--1895 PA 3, MCL 65.7; Townships--Revised Statutes of 1846, MCL 41.75; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63.
593-Civic Auditorium Fund
This fund is used to record the operations of the civic auditorium. It is a self-supporting fund which does business with individuals and firms outside the local unit departments and is, therefore, classified as an Enterprise Fund.
This fund is usually found in city government. It is used to record the revenues and expenses for the operation of a civic auditorium. Capital assets and depreciation are recorded within this fund.
The establishment and authorization of this operation is accomplished by a resolution of the legislative body or by a special vote of the people. Bond proceeds and the bond retirement are also accounted for in this fund if some of the capital assets of this fund are purchased from the sale of revenue bonds. The accounting for the issuance of revenue bonds is provided for by the Revenue Bond Act of 1933.
Money for the operation of the fund is supplied by a loan or appropriation from the General Fund, bond proceeds from the sale of bonds (used for capital assets), and rent received for the use of the facilities.
594-Marina Fund
This fund is used to record the operations of a local unit owned marina. It is a self-supporting fund which does business with individuals and firms outside the local unit departments and is, therefore, classified as an Enterprise Fund.
This fund is usually found in city government. It is used to record the revenues and expenses for the operation of a marina. Capital assets and depreciation are recorded within this fund.
The establishment and authorization of this operation is accomplished by a resolution of the legislative body or by a special vote of the people. Bond proceeds and the bond retirement are also accounted for in this fund if some of the capital assets of this fund are purchased from the sale of revenue bonds. The accounting for the issuance of revenue bonds is provided for by the Revenue Bond Act of 1933.
Money for the operation of this fund is supplied by a loan or appropriation from the General Fund, bond proceeds from the sale of revenue bonds (used for capital assets), and revenues from use of these facilities.
595-Commissary/Concession Fund
The Commissary/Concession Fund is established by resolution of the governing body of a county, city, village, or township. The establishing resolution should provide guidelines for the operation of the commissary, types of inventories to be maintained, markup, sales tax license, and authorized use of the profits of the commissary.
This fund can be found in any local unit. It is used to record the revenues and expenses for the operation of a concession stand (perhaps in a park) or a commissary (in a jail or hospital). Capital assets and depreciation are recorded within this fund.
The cash and investments of the Commissary/Concession Fund are subject to the requirements of 1943 PA 20, MCL 129.91, and may be included in a pooled cash and investment account.
All claims (expenses) must be approved by the governing body of the local unit of government pursuant to statutory requirements as follows: Cities--1895 PA 215, MCL 87.7, MCL 88.20; Villages--1895 PA 3, MCL 65.7; Townships--Revised Statutes of 1846, MCL 41.75; Counties--1851 PA 156, MCL 46.11(g); 1909 PA 58, MCL 46.71; 1943 PA 182, MCL 46.53; and 1923 PA 301, MCL 46.63.
596-Rubbish Collection Fund
This fund is used to record the operations of a rubbish collection system. It is a self-supporting fund which does business with individuals and firms outside the local unit and is, therefore, classified as an enterprise fund.
This fund can be found in any local unit. It is used to record the revenues and expenses for the operations of a rubbish collection system. Capital assets and depreciation are recorded within this fund.
Use Special Revenue Fund Number 226, Rubbish Collection Fund, if there is a special millage to fund the rubbish collection operation. Use Activity Number 528, Rubbish Collection/Disposal, if the rubbish collection operation is funded by the General Fund.
The establishment and authorization of this operation is accomplished by a resolution of the legislative body or by a special vote of the people. Bond proceeds and the bond retirement are also accounted for in this fund if some of the capital assets of this fund are purchased from the sale of revenue bonds. The accounting for the issuance of revenue bonds is provided for by the Revenue Bond Act of 1933.
Money for operation of this fund is supplied by a loan or appropriation from the General Fund, bond proceeds from the sale of revenue bonds and revenues from services rendered.
Internal Service Funds
Internal Service Funds may be used to report any activity that provides goods or services to other funds, departments, agencies of the primary government and its component units or to other governments on a cost reimbursement basis. Internal Service Funds should be used only if the reporting government is the predominant participant in the activity. Otherwise, the activity should be reported as an Enterprise Fund (GASB Statement 34, Paragraph 68).
Internal Service Funds may not be used to hide deficits in other funds. Any costs accounted for in Internal Service Funds must be charged to other funds on a current basis. If the net position of an Internal Service Fund is negative, this indicates that the other funds have not reimbursed the costs. The only exception to this is self-insurance funds, where GASB 10, Paragraph 66b allows charging using an actuarial method (or historical data) that is adjusted over a reasonable period of time so that revenue and expenses are approximately equal.
631-Building And Grounds Maintenance Fund
The Building and Grounds Maintenance Fund is used to record the operations of a building and grounds maintenance department. This fund is classified as an Internal Service Fund because it provides materials and services to other departments of the same local unit of government.
This fund is usually found in county or city government. This fund has its capital assets and depreciation recorded within the fund. This fund is established by a resolution of the legislative body of the local unit.
Money for the operation of this fund is supplied by an advance from the General Fund or other operating funds and reimbursements from the operating funds for services received.
634-Central Heating Fund
The Central Heating Fund is used to record the operations of a central heating department. This fund is classified as an Internal Service Fund because it provides materials and services to other departments of the same local unit of government.
This fund can be found in any local unit of government. The capital assets and depreciation are recorded within the fund. This fund is established by a resolution of the legislative body of the local unit.
Money for the operation of this fund is supplied by an advance from the General Fund or other operating funds and reimbursements from other fund for services received.
639-Drain Equipment Revolving Fund
The Drain Equipment Revolving Fund is used in counties to account for money advanced from the county General Fund for the purchase of drain equipment for maintenance work on drains. The Drain Equipment Revolving Fund is reimbursed by the Drain Fund as special assessments are collected. The Drain Equipment Revolving Fund is permitted by Chapter 12 of 1956 PA 40, MCL 280.301.
The cash and investments of the Drain Equipment Revolving Fund are subject to the requirements of 1943 PA 20, MCL 129.91. The Drain Equipment Revolving Fund may be included in a pooled cash and investment account.
640-DPW Equipment Revolving Fund
The DPW Equipment Revolving Fund is used to account for money advanced from the county or city General Fund for the purchase of equipment for maintenance work on public works projects. The DPW Equipment Revolving Fund is reimbursed from the Public Works Funds as those funds are billed.
The cash and investments of the DPW Equipment Revolving Fund are subject to the requirements of 1943 PA 20, MCL 129.91. The DPW Equipment Revolving Fund may be included in a pooled cash and investment account.
641-DPW Revolving Fund
The DPW Revolving Fund may be found in a county and is used to account for money used to pay for preliminary work on DPW projects which benefit other units of government such as townships, cities, and villages. The fund is required by Michigan Department of Treasury where the county advances money for the preliminary work on DPW projects covered by 1939 PA 342 and 1957 PA 185.
Money for the operation of the fund is supplied by the following:
- An advance from the General Fund.
- Reimbursement from bond proceeds.
- Reimbursements received from the other local units for benefits received and reimbursement from the applicable fund for construction of the specific DPW project.
A subsidiary ledger must be maintained to account for each individual DPW project.
The cash and investments of the DPW Revolving Fund are subject to the requirements of 1943 PA 20, MCL 129.91.
661-Motor Pool Fund
The Motor Pool Fund is used to record the operations of a motor vehicle pool. This fund is classified as an Internal Service Fund because it provides materials and services to other departments of the same local unit of government.
This fund can be found in any local unit. Capital assets and depreciation are recorded within this fund. This fund has special advantages for cities and villages because the Major and Local Street Funds can be charged rent for the time the equipment is used for street work. This fund can be established by a resolution of the legislative body of the local unit.
Money for the operation of this fund is supplied by an advance from the General Fund and reimbursements from other funds for services rendered.
662-Police Vehicle and Equipment Pool Fund
The Police Vehicle and Equipment Pool Fund is used to record the operations of a police vehicle and equipment pool. The units may (if they wish) combine these vehicles with the other equipment of the unit and account for them in Fund Number 661, Motor Pool Fund.
This fund can be found in any local unit.
This fund is classified as an Internal Service Fund because it performs services for other departments of the local unit. This fund can be found in most types of government. Capital assets and depreciation are recorded within this fund. This fund can be established by a resolution of the legislative body of the local unit.
Money for the operation of this fund is supplied by an advance from the General Fund and revenues from other funds of the local unit (rent charges).
663-Fire Vehicle and Equipment Pool Fund
The Fire Vehicle and Equipment Fund is used to record the operations and maintenance of a fire vehicle and equipment pool. The local units may, if they wish, combine these vehicles with the other equipment of the local unit and account for them in Fund Number 661, Motor Pool Fund.
This fund can be found in any local unit.
This fund is classified as an Internal Service Fund because it provides materials and services to other departments of the same local unit of government. Capital assets and depreciation are recorded within this fund. This fund can be established by a resolution of the legislative body of the local unit.
Money for the operation of this fund is supplied by an advance from the General Fund and revenues from other funds (rent charges).
664-Office Equipment Pool Fund
The Office Equipment Pool Fund is used to record the operations of an office equipment pool.
This fund can be found in any local unit.
This fund is classified as an Internal Service Fund because it provides materials and services to other departments of the same local unit of government. Capital assets and depreciation are recorded within this fund. This fund can be established by a resolution of the legislative body of the local unit.
Money for the operation of this fund is supplied by an advance from the General Fund and revenues from other funds (rent charges).
665-Heavy Equipment Pool Fund
The Heavy Equipment Pool Fund is used to record the operations of a heavy equipment pool.
This fund is classified as an Internal Service Fund because it provides material and services to other departments of the same local unit of government. This fund is usually found in a city or village government but can be found in other local units. Capital assets and depreciation are recorded within this fund. This fund can be established by a resolution of the legislative body of the local unit.
Money for the operation of this fund is supplied by an advance from the General Fund and reimbursements from other funds.
671-Utilities Revolving Fund
The Utilities Revolving Fund is used to record the operations of a facility which provides various utility services to departments of the local unit.
This fund is classified as an Internal Service Fund because its function is to service other departments within the same local unit.
This fund is usually found in city or village government but can be found in other local units. Capital assets and depreciation are recorded within this fund. This fund can be established by a resolution of the legislative body of the local unit.
Money for the operation of this fund is supplied by an advance from the General Fund and reimbursements from other funds.
672-Electrical Utility Fund
The Electrical Utility Fund is used to record the operations of an electrical utility which services only the departments of the local unit.
This fund is classified as an Internal Service Fund because it provides materials and services to other departments of the same local unit of government.
This fund can be found in any unit of government. Capital assets and depreciation are recorded within this fund. This fund can be established by a resolution of the legislative body of the local unit. Money for the operation of this fund is supplied by an advance from the General Fund and reimbursements from other funds.
673-Gas Utility Fund
The Gas Utility Fund is used to record the operations of a gas utility which services only the departments of the local unit.
This fund is classified as an Internal Service Fund because it provides materials and services to other departments of the same local unit of government.
This fund can be found in any unit of government. Capital assets and depreciation are recorded within this fund. This fund can be established by a resolution of the legislative body of the local unit.
Money for the operation of this fund is supplied by an advance from the General Fund and reimbursements from other funds.
674-Water Utility Fund
The Water Utility Fund is used to record the operations of a water utility which services only the departments of the local unit.
This fund is classified as an Internal Service Fund because it provides materials and services to other departments of the same local unit of government.
This fund can be found in any unit of government. Capital assets and depreciation are recorded within this fund. This fund can be established by a resolution of the legislative body of the local unit. Money for the operation of this fund is supplied by an advance from the General Fund and reimbursements from other funds.
677-Self-Insurance Fund
The Self Insurance Fund is used by a local unit which adopts a self-insurance program.
This fund is classified as an Internal Service Fund because its function is to provide insurance coverage to departments of funds within the same unit of government.
This fund can be found in any local unit which is permitted by statute, charter, ordinance, etc., to provide its own insurance protection. It is financed by appropriation transfers or contributions from other funds. Any losses normally recovered through insurance claims are paid from this fund.
This fund is established by a resolution of the governing body. Units should make a thorough study before adopting a self-insurance program. Money for the operation of this fund is supplied by appropriation transfers or contributions from the various funds involved in the self-insurance program. Losses, damages, etc., are then paid from this fund.