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The initial phaae has heen for the City's Community Development Department to build the base data and to use it for the compre- hensive planning process. The City has not only had a very successful first year of G25, but the system was installed and implemented at a very minimal cost. Phase II of incorporating the base data into the public works and engineering environment is expected to be completed by the early part of 1995. Finaacial Iaforaation Accountina Svstem and Budaetarv Control The accounting system provides for a complete, self-balancing account group for each fund of the City. Accounting records are maintained on the modified accrual basis for the governmental type funds and trust and agency funds, and the accrual basis of aceounting is utilized for the proprietary type funds, as defined in the notes to the financial statements. In developing and altering the City's accounting system, consideration is given to the adequacy of internal accounting controls. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against loss from unauthorized uae or disposition and the reliability of financial records for prepar- ing £inancial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes the cost of a control should not exceed the benefita likely to be derived, and the evaluation of costs and benefits requires estimatea and judgments by management. All internal control evaluations occur within the above fraatework. We believe that the City's internal accounting controls adequately eafeguard asaets and provide reasonable assurance of proper recording of financial transac- tiona. A budgetary system of accounts ia maintained for the general and special revenue funds. Control is maintained by the uae of a purchase order system and the continuing review of actual expenditures compared to budgeted amounts. Budget revisions are done upon approval of a resolution by the City Council. The financial statements of revenuea and expenditures compared with the budget in this report would refleet these revisions. Reserve for encumbrances is reported as part of the fund balance at the end of the fiacal year. General Governseat Puactions General Fund The General Fund accounts for all financial transactions not properly accounted for in any other fund. Revenues (including operating transEers) of the General Fund totaled $6,595,278, an increase of $ 523,024 from 1992. Expenditures (including operat- ing transfers) for the General Fund totaled $6,453,690 an in- crease of $466,802 over the previous year. The fund balance 5