What is "Fund Balance"?

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In government accounting, "Fund Balance" is a term used to describe the financial position of the Village on a continual basis. After the close of each fiscal year (June 1 to May 31), the surplus or deficit for the year is added to the fund balance. For instance, at the end of Fiscal Year 2013 (May 31, 2013), the Village had a deficit fund balance of -$57,293. The financial operations of the Village for the period June 1, 2014 to May 31, 2014 resulted in a surplus of $ 250,626. When added to the deficit, the new fund balance was $193,333. Of this, $188,333 was "unreserved", meaning that is was available for any type of financial hardship the Village might encounter, such as a major storm or severe infrastructure damage. Without a positive fund balance, the Village would be unable to meet un-budgeted emergency expenditures.