582 PARKS 



used for a special capital expenditure, such as the acquisition of a special 

 piece of park property or the construction or improvement of a certain 

 park. A fund so created is a capital fund, or it may be termed the construc- 

 tion or the acquisition fund, as the case may be. 



The municipal securities sold to create the capital fund usually take 

 the form of bonds, which in turn may be secured either by general taxation 

 or by special assessment against specially benefited property. In either 

 case the funds accrued from receipts obtained from the collection of these 

 special assessments are tax levies, and their subsequent reinvestment, if 

 any, constitutes what is generally known as the sinking fund or sometimes 

 called the interest and certificate fund. It is that fund which is accrued for 

 the payment of interest on the bonds and for the repayment of the principal. 



Special and trust funds include all classes of funds which are reserved 

 for special purposes, usually at the instance of some trust for which the city 

 is administrator or trustee. Park departments are especially apt to have 

 trust funds. 



Operating fund. There might be added still another classification of 

 funds which is created simply as an aid to a common procedure. This 

 fund, which might easily assume the name of operating fund, is often only 

 an accounting term or book accounting, there being no actual cash existing 

 in the fund or in any case a comparatively nominal amount. The object 

 of the fund is to provide a means of carrying accounts whose income and 

 expense are designed to equalize during the year, or where the operation 

 of revenue producing activities can be carried on and the net results trans- 

 ferred to the general fund at the close of the year's business, thus elimi- 

 nating from the accounts of the general fund extraneous matter which in 

 some instances may hamper the efficiency of the financial procedure of the 

 municipality. 



Summary of fund classification: (i) General funds; (2) Special funds 

 capital funds, sinking funds and special funds; (3) Operating funds. 



Fund procedure. The purpose of establishing anything but a general 

 fund is to ensure that means are provided for the carrying out of particular 

 projects. Those in authority are responsible to the people who elected 

 them to office for the acts which are carried out, and when funds are once 

 provided for a specific object they want to be sure that the funds made 

 available are used to carry out that object and for no other purpose, and 

 also that the funds provided are not exceeded by the expending officers. 

 Inasmuch as the creation of funds is necessary, it becomes equally neces- 

 sary that the accounting processes set up in the offices of a park department 

 shall be SD designed as to present statements at stated periods showing the 

 financial status of each of the funds operating within the department. 



