City of Diamond Bar Budget

Fiscal Year 22/23

BASIS OF BUDGETING


The City of Diamond Bar's annual operating budget is prepared in conformity with Generally Accepted Accounting Principles (GAAP) unless otherwise noted below:


1. The budgetary basis for governmental funds (e.g. General Fund, CIP Fund, Special Revenue funds, Debt Service Fund) is in conformity with GAAP, with a few minor exceptions. In conformity with GAAP, the modified accrual basis of accounting is used wherein revenues are recognized in the accounting period in which they become measurable and available to finance expenditures of the current fiscal period, while expenditures are recognized in the accounting period in which the liability is incurred. However, in the following cases the budgetary basis differs from GAAP:


a. Adjustments to recognize gains and losses on investments resulting from changes in their market value are not budgeted.

b. Items reported as “other financing sources” and “other financing uses” are classified as revenues and expenditures under the budgetary basis of accounting.


2. The budgetary basis for proprietary funds (e.g. Internal Service funds) is in conformity with GAAP, using the accrual basis of accounting for all revenues and expenses, except for the following instances:

a. The receipt of long-term debt proceeds, capital outlays, and debt service principal payments are budgeted, but allocations for depreciation and amortization

expense are not.


Each of the City's funds is considered a separate accounting entity with a self-balancing set of accounts that records assets, liabilities, fund equity, revenue and expenditures. Funds are established and segregated for the purpose of recording specific programs or attaining certain objectives in accordance with special regulations, restrictions, or limitations.


The General Fund accounts for all the general revenue of the City not specifically levied or collected for other City funds and for expenditures related to rendering the general services provided by the City. The City of Diamond Bar has twenty-nine Special Revenue Funds that are used to account for specific revenues that are legally restricted to expenditure for particular purposes. The Capital Project Fund is used to account for the purchase or construction of major capital facilities. The Debt Service Fund is used to account for principal and interest payments on outstanding fixed rate bonds. Internal Service Funds are used to account for goods and services provided to other departments within the City such as liability insurance and equipment replacement.


The budget is prepared on a line item basis by fund and department. The six major General Fund divisions are:


  1. Legislative
  2. Administration & Support
  3. Public Safety
  4. Community Development
  5. Parks & Recreation
  6. Public Works