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NOTE: I —SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTiiNi") PL .Budgets:gnd Budgetary Accounting B(Idget.amounts eft -presented on the modified ackrual basis of accounting. Each fall, the- CiW Council adopts.a General Futid budget for.tlieffoRowing fiscal)e$r beginning January I. -The City has established budgetary control at the fund level. Budget appropriationslapse at year-end. O. Risk Management The City is exposed -to various risks of loss related to torts: theft of, damage to, and destrubtion -of assets; errors and omissions; injuries to employees; and natural disasters: The City continues to*car commercial insurance for all risks of loss,.including disability.and employee health insurance. Settled Claims resulting from these..risks have not exceeded insurance coverage in any of the past three fiscal years; There were no significant reductions in insurance coverage in the current yew. P. Use of Estimates The preparation of financial statements, *in :accordance with accounting principles generally accepted in the United States of America, requires: management to make estimates and. assumptions that affect amounts reported.in the financial statements- during the reporting period. Actual results could differ from such. -estimates. Q. Interfund Receivables and Payables In the fund financial statements, activity between funds that is representative. of lending or borrowing arrangements*is reported as either "due tolfrom other funds" (current por0on)-or "advances tolfrom other funds." All other outstanding balances between funds are reported as "due tolfrom other funds" Any residual balances outstanding between .the governmental activities and business -type activities are reported. in the government -wide financial statements as "internal balatiees.." -23-