(1) The accounts of the Municipality shall be classified into the following funds for record-keeping and reporting purpose, namely:-:
(a) General Fund – accounts covering all activities which do not fall under (b) or (c) below;
(b) Water Supply and Sewerage Fund – accounts covering all activities which relate to supply of water and provision of sewerage systems;
(c) Enterprise Fund – accounts covering all activities which are of a commercial nature and in which the Municipality intends to construct or acquire and or operate assets or transact them in a manner that can generate surplus over costs or recover costs e.g.
municipal shopping complex or layout development.
8
(2) Separate books of account shall be maintained for each Fund in the following manner:-
(a) All vouchers shall be prepared separately for each fund.
(b) Separate bank accounts shall be maintained for each Fund and remittances and payments pertaining to that Fund shall be made into or from those bank accounts only.
Provided that, if maintenance of separate bank accounts for each Fund as specified in sub rule (b) above is found to cause undue hardship, bank account of one Fund may be used for transactions of another Fund, with the approval of the Director of Municipal Administration. In such case the Municipality shall follow the inter-fund transfer procedures as may be prescribed by the Government.
(c) In case any receipt or payment is transacted in another fund’s bank account, it shall be treated as an ‘inter-fund transfer’ and accounted accordingly.
(3) Financial Statements shall give information on the performance, and financial position of each Fund, and also of the Municipality as a whole.
(4) The Funds mentioned in sub-rule (1) above shall together constitute the Municipal Fund.