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The City of Norfolk uses fund accounting to report
on its financial position and the results of its operations. To
accomplish efficient tracking and control spending, all funds are
budgeted on a line-item cash basis, which differs from the financial
statements that are prepared in accordance with generally accepted
accounting principles. Under this basis Fund Balance is the funds'
cash balance. Management of the City is responsible for establishing
and maintaining an internal control structure designed to ensure
that the assets of the City are protected from loss, theft, or
misuse; that adequate accounting data is compiled to allow for the
preparation of financial statements in conformity with generally
accepted accounting principles; and present supplementary schedules
comparing budget to actual. Detailed reports are distributed monthly
to all divisions for review and to facilitate internal control. The
City also uses a formal encumbrance system, which appropriates funds
for later payment and ensures that we cannot overspend those
appropriations.
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