Fund Categories and Types

If you only read one thing Three fund categories, and each one breaks into specific fund types. Not every government uses every type, only the ones it actually needs.

Why This Matters

FM2.1 covered the three activity categories. This is where those categories turn into the actual named funds you’ll see on a real set of financial statements, General Fund, Debt Service Fund, and so on.

What’s Actually Going On

Governmental funds cover tax-supported activity, and split into five types: the General Fund, Special Revenue Funds, Capital Projects Funds, Debt Service Funds, and Permanent Funds.

Proprietary funds cover business-type activity, and split into two: Internal Service Funds and Enterprise Funds.

Fiduciary funds cover resources held for others, and split into four: Custodial Funds, Investment Trust Funds, Private-Purpose Trust Funds, and Pension Trust Funds.

A small district might only ever use a handful of these. A larger one might use most of them. Neither is wrong, since a fund only exists when there’s an actual activity or restriction that needs one.

Five governmental, two proprietary, four fiduciary. Eleven possible fund types, used as needed.

How This Applies

When you’re reading an unfamiliar district’s financial statements, this list is your checklist. If you see a fund type you don’t recognize, check which of the three categories it sits under, that tells you what accounting rules govern it before you read a single number.

Applied next in FM2.5 This exact structure gets used on a real set of funds, mapping actual named funds to these categories, not just the abstract list.