Presenter explains fund balance categories, uses and risks to Wolfeboro Budget Committee

Tammy described the five GASB 54 fund-balance categories and why they matter to towns. "Fund balance reserves is different from reserved funds," she said, and walked members through nonspendable, restricted, committed, assigned and unassigned balances. She emphasized that fund balance is best thought of as town equity rather than 'cash in the bank.'

On use, Tammy listed three lawful ways unassigned fund balance can be used: (1) legislative authorization at deliberative session, (2) emergency spending authorized by DRA, and (3) governing-body use to offset taxes. "There are only 3 ways that that unassigned fund balance can be used," she told the committee, and cautioned that DRA can deny emergency requests and that use of fund balance does not automatically mean additional cash in the checkbook.