b'City of Dover Tuscarawas County, Ohio Notes to the Basic Financial Statements For the Year Ended December 31, 2019 Note 5Budgetary Basis of AccountingWhile the City is reporting financial position, results of operations and changes in fund balance on the basis of generally accepted accounting principles (GAAP), the budgetary basis as provided by law is based upon accountingforcertaintransactionsonabasisofcashreceipts,disbursementsandencumbrances.The statement of revenues, expenditures and changes in fund balancebudget (non-GAAP Basis) and actual presented for the general fund is presented on the budgetary basis to provide a meaningful comparison of actual results with the budget.The major differences between the budget basis and GAAP basis are as follows:1.Revenues are recorded when received in cash (budget) as opposed to when susceptible to accrual (GAAP).2.UnrecordedcashrepresentsamountsreceivedbutnotreportedbytheCityontheoperating statements (budget), but which is reported on the GAAP basis operating statements.3.Expenditures/expenses are recorded when paid in cash (budget) as opposed to when the liability is incurred (GAAP).4.Encumbrances are treated as expenditures (budget) rather than as restricted, committed, or assigned fundbalancefortheportionofoutstandingencumbrancesnotalreadyrecognizedasaccounts payable. (GAAP).The following table summarizes the adjustments necessary to reconcile the GAAP basis statements to the budgetary basis statements for the general fund.Net Change in Fund BalanceGAAP Basis $258,377Net Adjustment for Revenue Accruals (81,998)Beginning Unrecorded Cash 30,871Ending Unrecorded Cash (61,777)Net Adjustment for Expenditure Accruals 84,200Encumbrances (18,782)Budget Basis $210,891Note 6Deposits and InvestmentsThe City has chosen to follow State statutes and classify monies held by the City into three categories.ActivedepositsarepublicdepositsdeterminedtobenecessarytomeetcurrentdemandsupontheCity treasury.Active monies must be maintained either as cash in the City treasury, in commercial accounts payable or withdrawable on demand, including negotiable order of withdrawal (NOW) accounts, or in money market deposit accounts.Inactive deposits are public deposits that Council has identified as not required for use within the current five year period of designation of depositories.Inactive deposits must either be evidenced by certificates of deposit maturing not later than the end of the current period of designation of depositories, or by savings or deposit accounts including, but not limited to, passbook accounts. - 43 43 -'