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CITY OF GENT LAKE, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L. Net Position/Fund Balance (Continued) Restricted — funds are constrained from outside parties .(statute, grantors, bond. agreements, etc.). Committed — funds are established and modified by a resolution approved by the City Council. Assigned consists of internally imposed constraints approved by the. City. Finance D irector. Unassigned. - is the residual classification for the General Fund and also reflects the negative residual amounts in other funds. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, it is the City's policy to use restricted first, then unrestricted fund balance. When an expenditure is incurred for purposes. for which committed, assigned and unassigned amounts are available, it is the City's policy to use committed. first, then assigned:, and finally unassigned amounts. M. Interfund Transactions Interfund services provided and used are accounted for as revenues, expenditures or expenses: Transactions that constitute reimbursements to. a. fund for expenditures/ expenses initially made from it that are properly applicable to another fund, are recorded. as expenditures/expenses in the reimbursing fund and as reductions of expenditures or expenses in the: fund that is reimbursed. All other interfund transactions are reported as transfers. All interfund transactions are eliminated except for activity between governmental activities and business -type activities for presentation in the entity -wide statements of. net position and statements of activities. NOTE 2 DEPOSITS AND INVESTMENTS A. Deposits The City maintains a cash and investment pool that is available for use by all funds. Each fund type's portion of this pool is displayed on the statement of net position and the balance sheet as: "Cash and Investments." In accordance with Minnesota Statutes, the City maintains deposits at financial institutions. which are authorized by the City. Council, (20)