California Department of General Services (2024)

The Generally Accepted Accounting Principles (GAAP) basis classification divides funds into three fund categories:governmental, proprietary, and fiduciary. The GAAP basis classification assigned to a fund impacts how the fund is displayed in the Annual Comprehensive Financial Report.

Governmental Funds

These funds are used to record and report the normal resources and costs of the government (i.e., day-to-day operating services). Governmental fund types are presented using the current financial resources measurement focus. Funds in this group are classified into five fund types:

• General Fund: This is the main operating fund of the state. It is used to account for all financial resources not accounted for and reported in another fund.
• Special Revenue Funds: Used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes, other than debt service or capital projects.
• Capital Project Funds: Used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets (other than those financed by proprietary and fiduciary funds).
• Debt Service Funds: Used to account for and report financial resources that are restricted, committed, or assigned to expenditures for principal and interest. Debt service funds should also report financial resources being accumulated for principal and interest maturing in future years (other than those financed by proprietary and fiduciary funds).
• Permanent Funds: Used to account for and report resources legally restricted to the extent that only earnings, and not principal, may be used to support the reporting government’s programs.

Proprietary Funds

These funds are used to account for activities that receive significant support from fees and charges. Proprietary fund types are accounted for using the economic resources measurement focus. Funds in this group are classified into two fund types:

• Enterprise Funds: Used to account for any activity for which a fee is charged to external users for goods or services. Activities are required to be reported as enterprise funds if any one of the following criteria is met:

• The activity is financed with debt that is backed solely by fees and charges.
• Laws and regulations require fees and charges to be set to recover costs, including capital costs (depreciation or debt service); or
• There is a pricing policy that fees and charges be set to recover costs, including capital costs (depreciation or debt service).

• Internal Service Funds: Used to account for goods or services provided to other agencies, departments, or governments on a cost-reimbursem*nt basis.

Fiduciary Funds

These funds are used to account for assets held in a trustee capacity or as a custodian/agent for individuals, private organizations, and other governments, and cannot be used to support the government’s own programs. Fiduciary fund types are accounted for using the economic resources measurement focus. Funds in this group are classified into four fund types:

• Pension Trust Funds: Used to account for resources that are required to be held in trust for the members and beneficiaries of defined benefit pension plans, defined contribution plans, other post-employment benefit plans, or other employee benefit plans.
• Investment Trust Funds: Used to account for the external portion of investment pools and individual investment accounts held in trust.
• Private-Purpose Trust Funds: Used to account for all other trust arrangements under which principal and income benefit individuals, private organizations, or other governments.
• Custodial Funds: Used to account for money held by the government as a custodian until distributed to the legal owner/beneficiary.

• CLASSIFYING FUNDS-GAAP BASIS - 04/2020
• GAAP BASIS - 09/2002