20743 FINAL TEXT accounting.pdf -- Tables -- Figures -- Preface -- Acknowledgments -- Part 1: Water Utility Financial Management Overview -- What Is Financial Management? -- Functional Responsibilities Included Under Financial Management -- Authoritative Standards for the Functional Responsibilities -- Industry Guidelines -- Book Organization -- Water Utility Industry Description -- Implications of Ownership -- Environmental Regulation -- The Functions of Financial Management -- The Financial Management Cycle -- Cash Management -- Measuring Financial Performance -- Resource Acquisition, Inventory, and Insurance -- Internal Control -- Part 2: Financial Accounting Overview -- Financial Planning and Control -- Financial Planning Process -- Financial Control Process -- Presentation of Annual Financing Plans -- Summary -- Accounting -- Accounting Functions -- Designing the Accounting System -- When to Record Transactions: Accrual Versus Cash Accounting -- How to Record: Double-Entry Bookkeeping -- Governmental Water Utilities -- Organizing the Office -- Reporting of Accounting Information -- Criteria for Good Reports -- Reports for Different Users and Purposes -- Part 3: Financial Reports -- Budgeting -- Information Content -- Frequency of Reporting -- General Budget Development -- Elements of Budget Reporting -- Relevance, Accuracy, and Timing of Interim Budget Reporting -- Financial Statement Reports -- Guidelines for Reporting: Financial Statement Standards -- Reports of Private Water Utilities -- Reports of Governmental Water Utilities -- Other Financial Statement Reporting -- Rate and Regulatory Reports -- Goals -- Rate Process -- Test Period -- Rate Case -- Rate Base, Cost of Service, and Cost of Capital -- Reporting -- Part 4: Accounting Cycle Implementation and Management -- Revenue and Rates -- Operating Revenues.

Operating Revenue Accounts -- Projecting Operating Revenues -- Applying the Rate Schedules -- Monitoring Revenues -- Operation and Maintenance Expenses -- Nature and Classification -- Planning -- Source-of-Supply and Pumping Expenses -- Water Treatment Expenses -- Transmission and Distribution Expense -- Billing and Customer Relations -- Administrative and General -- Centrally Provided Services -- Controlling Operation and Maintenance Expenses -- Summary of Planning Operation and Maintenance Expenses -- Capital Assets -- Nature and Significance of Depreciation -- Differences Between Private and Governmental Utilities -- Definitions and Concepts -- Determining Depreciation Expense -- Selecting a Depreciation Formula -- Methods of Applying Depreciation Formulas -- Reevaluating the Adequacy of Periodic Depreciation Charges -- Determining Amortization Expense -- Depreciation Expense for Income Tax -- General and Income Taxes -- Types and Descriptions of Taxes -- Accounting for General Taxes -- Anticipating Tax Implications -- Estimating Taxes -- Summary -- Capital Improvement Programs -- The Capital Expenditures Budget -- Sources of Funding -- Capital Project Construction -- Recording of Capital Improvement Spending -- Construction Costs -- Accounting for Different Funding Sources -- Accounting for Retirement Units of Property -- Comparing Budgeted and Actual Expenditures -- Continuing Property Records -- Current and Other Assets -- Liquid Assets -- Receivables -- Materials and Supplies -- Restricted Assets -- Deferred Charges -- Liabilities and Other Credits -- Differences Between Private and Governmental Utilities -- Current and Long-Term Differences -- Definitions of Key Liabilities -- Definitions of Other Credits -- Chart of Accounts -- Controlling and Monitoring Current and Accrued Liabilities -- Types of Financial Reports.

Equity, Capital, and Financial Ratios -- Differences Between Private and Governmental Water Utilities -- Retained Earnings/Fund Net Assets -- Appropriated Retained Earnings/Restricted Net Assets -- Contributed Assets -- Requirements From Governing Authorities -- Tools for Evaluating Utility Financial Position and Operations -- Ratio Analysis -- Part 5: Financial Management Functions -- Financing -- Financing Water Utility Operations -- Audits -- Financial Audits -- Operational, Management and Other Audits -- Summary -- Internal Controls -- Internal Control Components -- A More In-Depth Look at Fraud -- Evaluating and Communicating Identified Deficiencies -- Guidance for Regulators and Elected Officials -- Summary -- Acknowledgments -- Sources and Suggested Reading -- Index -- Tables -- Table 2-1 Important differences in water utilities resulting from type of ownership -- Table 2-2 Characteristics of the water supply industry -- Table 3-1 Example utility: operating budget summary -- Table 3-2 Example utility: operating revenues -- Table 3-3 Example utility: operating and maintenance expenses by object -- Table 3-4 Example utility: operating and maintenance expenses by function -- Table 3-5 Performance measure examples -- Table 4-1 Statement of revenues and their disposition -- Table 4-2 Amendments to the 20XA-20XB annual operating budget -- Table 4-3 Sample budget variance sheet -- Table 6-1 The basic concepts of management account for water utilities -- Table 7-1 Example budget report by account detail -- Table 7-2 Example budget report by district -- Table 7-3 Example budget report by major account and budget type -- Table 7-4 Example budget report by subprogram -- Table 7-5 Example subprogram report by organizations -- Table 7-6 Example budget by program -- Table 9-1 Cost-of-capital example -- Table 11-1 Meter maintenance operating expenses.

Table 12-1 Application of straight-line method -- Table 12-2 Application of a depreciation based on use -- Table 12-3 Depreciation using the sum-of-the-years' digits method -- Table 12-4 Depreciation using the double declining balance method -- Table 12-5 Computation of depreciation using a composite rate for a group of assets -- Table 12-6 Example utility schedule of funds: R evenues, expenses, and changes in retained earnings -- Table 14-1 Five-year capital expenditures budget summary -- Table 15-1 Statement of cash flows -- Table 15-2 Cash flow forecast -- Table 15-3 Accumulation of restricted assets (sinking fund) to provide for the retirement of 20-year term bond issue -- Table 15-4 Statement of changes in the group of assets restricted for revenue bond debt service -- Figures -- Figure 3-1 Financial management cycle -- Figure 5-1 Flow of accounting information -- Figure 5-2 A chart of accounts for water utilities -- Figure 7-1 Example of budget program description -- Figure 11-1 Structure of an annual operating budget -- Figure 15-1 Accounting for cash receipts -- Figure 15-2 Accounting for disbursements -- Figure 15-3 Flow of information and documents related to the purchasing and receiving of materials and supplies -- Appendix A Body -- Appendix B Body -- Appendix C Body -- Appendix D Body -- Other Operating Revenue 2011 -- Summary of O&M Expenses Through 11/30/11 -- Louisville Water Company Irrigation Consumption & Revenue December 2011 -- Louisville Water Company Net Income -- Louisville Water Company Financial Overview Nov. 20 11 -- Appendix E Body -- Appendix A -- Appendix B -- Appendix C -- Appendix D -- Appendix E.