Government Fund Accounting Guide

How to run GASB fund accounting in BizBooks Pro — from setting up your government entity and its funds through producing the fund-level statements and Budget vs Actual reports your board and auditor expect.

Who Government Edition Is For

Government Edition turns on when a company's reporting standard is set to GASB (Governmental Accounting Standards Board — the standard for US state and local governments). It's built for the small end of the public sector:

• Special districts — water, fire protection, cemetery, irrigation, mosquito abatement, library districts
• Small towns and villages — typically under a few thousand residents
• HOAs and community associations that keep fund-style books (Operating Fund + Reserve Fund)
• Public agencies and authorities that need GASB-formatted statements without an enterprise ERP

The core idea: a government is not one set of books. It's a collection of funds — each one a self-balancing ledger with legal restrictions on what its money can be spent on. BizBooks Pro models each fund as its own company file, joined together in a fund group so you can report on any single fund or the whole government at once.

Setting Up a Government Entity

1. Create a new company (Settings → Companies → Add New Company, or the Setup Wizard on a fresh install)
2. Enter your government's legal name and EIN
3. For Reporting Standard, choose Government / Special District (GASB)
4. Keep Create default chart of accounts checked — BizBooks Pro seeds the governmental chart (Fund Balance accounts, Revenues, Expenditures by function)
5. Save — this company becomes your primary fund, usually the General Fund
6. Open Funds in the sidebar and click Set Up Fund Structure to create the fund group

Understanding Fund Types

Every fund declares a GASB fund type when created. The type determines which chart of accounts template seeds and how the fund presents in reports:

Example: a water district typically runs a General Fund (governmental — property tax revenue, admin expenditures) beside a Water Enterprise Fund (proprietary — water sales, operating expenses, Net Position). BizBooks Pro seeds a different chart of accounts for each and formats each one's reports correctly.

Adding Funds

1. Open Funds from the sidebar (appears for GASB companies)
2. Click + New Fund
3. Name the fund (e.g. "Streets Fund," "Water Enterprise Fund") and pick its fund type
4. Click Create Fund

BizBooks Pro creates the fund as its own company file with the fund-type-appropriate chart of accounts, joins it to your fund group, and inherits the fiscal year settings from your primary fund so every fund reports on the same calendar.

Switching Between Funds

The company switcher doubles as your fund switcher. Each fund shows a 🏛️ badge with its fund type, and a View Combined — All Funds entry jumps straight to the government-wide reports. Open any fund to work in its books — enter transactions, reconcile its bank account, run its reports. Everything you already know about BizBooks Pro works identically inside each fund.

GASB 54 Fund Balance Classifications

Governmental funds don't report "equity" or "retained earnings" — they report Fund Balance, classified per GASB Statement 54 by how constrained the money is:

The seeded chart creates one account per classification. When you add your own equity accounts, the Fund Balance Classification dropdown on the account form tags each one so the Fund Balance by Classification report groups correctly. Proprietary funds instead pick from the three Net Position classifications.

Per-Fund Balance Sheet

From the Funds page, click Balance Sheet on any fund row. Governmental funds render as a Balance Sheet with the Fund Balance section; proprietary funds render as a Statement of Net Position. Unclosed current-year activity shows as an "Excess of Revenues Over Expenditures" line inside fund balance — the same way a standard Balance Sheet rolls year-to-date Net Income into Retained Earnings mid-year.

Balance Sheet by Fund

Open Government Reports → Balance Sheet by Fund. Every fund appears as its own column with a Total column at the right — the side-by-side presentation auditors use to see the whole government's position on one page. Accounts align across columns by account number, which is why the seeded templates share numbering.

Statement of Revenues, Expenditures, and Changes in Fund Balance

The GASB replacement for the Income Statement. For any fund and date range it shows Revenues by source, Expenditures by function, the Excess (Deficiency) of Revenues Over Expenditures, and the walk from Beginning to Ending Fund Balance.

Combined Statements

Government Reports → Combined Statement — All Funds rolls the Statement of Revenues, Expenditures, and Changes in Fund Balance across every fund: one column per fund, plus the government-wide total. Each fund keeps its own self-balancing books; this report is how the board sees the whole government at once. Beginning and ending fund balance rows tie to the Balance Sheet by Fund.

Fund Balance by Classification

The GASB 54 disclosure matrix: classifications down the side, funds across the top. Any unclosed current-year surplus shows as its own line so the report total ties to the Balance Sheet by Fund. Auditors request this schedule to support the fund balance note disclosure.

Budget vs Actual

Governments adopt budgets by law, so budget-versus-actual reporting is a first-class report, not an afterthought.

1. Inside the fund, open Budgets and create a budget for the fiscal year (enter adopted amounts per revenue and expenditure account)
2. Open Government Reports → Budget vs Actual, pick the fund and date range, and run

Each budgeted line shows Budgeted, Actual, Variance, Variance %, and a status flag:

• Expenditure lines — 🔴 red once actual spending exceeds budget, 🟡 yellow at 90% of budget, 🟢 green otherwise
• Revenue lines — 🔴 red when collections run more than 10% behind budget, 🟡 yellow within 10%, 🟢 green at or above budget

Export to CSV for board packets with the ⬇ CSV button.

Encumbrance Accounting (Government Enterprise)

Encumbrances are how governments avoid spending money that's already spoken for: the moment a purchase order is issued, its full amount is reserved against the budget — long before any invoice arrives.

1. Create a purchase order as usual and open its detail view
2. Click 🔒 Encumber — Reserve Budget in the blue encumbrance panel
3. BizBooks Pro posts a balanced entry that moves the PO amount from Fund Balance — Unassigned into Reserve for Encumbrances (a Committed classification)

The mechanics are deliberate: encumbrances are never expenditures (GASB prohibits reporting them that way), so the entry lives entirely within fund balance. Your Statement of Revenues and Expenditures is untouched; your Balance Sheet and GASB 54 report show the committed amount.

• Receiving goods liquidates the encumbrance proportionally — receive 1 of 4 radios and a quarter of the reserved budget releases. The actual expenditure books when you convert the PO to a bill, so nothing double-counts.
• Cancelling (the ↩ button) releases whatever is still reserved.
• At year end, the encumbrance decisions endpoint lets you carry open encumbrances into the new fiscal year or lapse them.

The Open Encumbrances report (Government Reports → Budgetary Control) lists every PO with reserved budget, its liquidated amount, and what remains open.

Posting the Budget to the GL (Government Enterprise)

Governments formally journalize the adopted budget: Estimated Revenues and Appropriations are recorded as ledger entries, not just report inputs. In BizBooks Pro:

1. Create the budget and enter the adopted amounts per account
2. Click 📋 Post to Budgetary GL on the budget page
3. BizBooks Pro records the adoption entries — Dr Estimated Revenues / Cr Budgetary Fund Balance for revenues, and Dr Budgetary Fund Balance / Cr Appropriations for expenditures

These entries live in a segregated budgetary ledger — formal, immutable, and fully audit-trailed — kept apart from your actual books so budgetary (memo) accounts can never distort real financial statements. Once posted, the budget locks: changes go through amendments, each carrying its amount, reason, effective date, and its own adjusting budgetary entry.

Appropriations Ledger (Government Enterprise)

The budgetary control report — the one your finance director checks before approving any purchase. For every budgeted account:

• Original Budget — as adopted
• Amendments — the tracked changes since adoption
• Revised Budget — original plus amendments
• Encumbered — open purchase-order reservations against this account
• Expended — actual spending to date
• Available — Revised − Encumbered − Expended, shown in red when negative (over-committed — time for an amendment)

Estimated revenues appear in their own section with actual collections and variance. Run it from Government Reports → Appropriations Ledger.

Modified Accrual Basis (Government Enterprise)

Governmental funds recognize revenue when it is measurable and available (collectible within a window after period end — 60 days by default); proprietary funds use full accrual. BizBooks Pro sets each fund's basis automatically from its fund type when created — governmental types get modified accrual, enterprise and fiduciary funds get full accrual — and both the basis and the availability window are adjustable per fund.

Government-Wide Statements (Government Enterprise)

GASB 34 requires two entity-wide statements alongside the fund statements, plus a schedule reconciling them:

• Statement of Net Position — all activities in two columns: Governmental Activities (governmental funds plus internal service) and Business-type Activities (enterprise funds), with fiduciary funds excluded because that money belongs to others.
• Statement of Activities — the GASB-34 format: expenses by function, offset first by program revenues (charges for services, fees, permits, fines) to show each function's net cost, then general revenues (taxes, intergovernmental aid) below the line, ending in Change in Net Position.
• Reconciliation schedule — the required disclosure walking from governmental fund balances (modified accrual — no capital assets, no long-term debt) to Net Position of Governmental Activities, with capital asset and long-term liability adjustment lines.

All three run from Government Reports → Government-Wide.