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CITY OF LITTLE CANADA, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2015 <br /> <br /> <br /> <br />(42) <br /> <br />NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />F. Budgets (Continued) <br />4. The City Administrator is authorized to transfer appropriations within any department <br />budget. Additional interdepartmental or interfund appropriations and deletions are or <br />may be authorized by the City Council with fund (contingency) reserves or additional <br />revenues. <br />5. Formal budgetary integration is employed as a management control device during <br />the year for the General Fund and Special Revenue Funds. <br />6. Legal debt obligation indentures determine the appropriation level and debt service <br />tax levies for the Debt Service Funds. Supplementary budgets are adopted for the <br />Proprietary Funds to determine and calculate user charges. These Debt Service and <br />Proprietary budget amounts represent general obligation bond indenture provisions <br />and net income for operation and capital maintenance and are not reflected in the <br />financial statements. <br />7. A capital improvement program is reviewed annually by the City Council for the <br />Capital Project Funds. However, appropriations for major improvement projects <br />(subject to statutory purchasing requirements) are not adopted until the actual bid <br />award of the improvement. The appropriations are not reflected in the financial <br />statements. <br />8. Expenditures may not legally exceed budgeted appropriations at the total fund level. <br />Monitoring of budgets is maintained at the expenditure category level (i.e., salaries, <br />wages and benefits, supplies, services, capital outlay) within each activity. <br />9. The City Council may authorize the transfer of budgeted amounts between City <br />funds. <br /> <br />G. Cash and Investments <br />Cash and investment balances of the primary government and component unit are <br />pooled and invested, to the extent available, in authorized investments. Investment <br />income is allocated to individual funds on the basis of the fund’s equity in the cash and <br />investment pool. <br /> <br />The City provides temporary advances to funds that have insufficient cash balances by <br />means of an advance from another fund shown as interfund receivables in the <br />advancing fund, and an interfund payable in the fund with the deficit, until adequate <br />resources are received. These interfund balances are eliminated on the government- <br />wide financial statements.