athens tn acfr fy2025

Unverified text extraction. Check the original page for numbers, names, and layout.

CITY OF ATHENS, TENNESSEE
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2025
6
The statement of activities presents information showing how the government’s net position changed 
during the most recent fiscal year. All changes in net position are reported as soon as the underlying event 
giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and 
expenses are reported in this statement for some items that will only result in cash flows in future fiscal 
periods (e.g., uncollected taxes and earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City of Athens that are 
principally supported by taxes and intergovernmental revenues (governmental activities) from other 
functions that are intended to recover all or a significant portion of their costs through user fees and 
charges (business-type activities). The governmental activities of the City of Athens include general 
government, public safety, highways and streets, education, economic development, and culture and 
recreation. The business-type activities of the City of Athens include the Conference Center Fund and the 
Sanitation Fund.
The government-wide financial statements include not only the City of Athens itself (which is the primary 
government) and the Athens Board of Education, but also the legally separate entity Athens Utilities 
Board. However, the Athens Housing Authority, the McMinn County Economic Development Authority, 
the E. G. Fisher Library, and the Athens Health and Educational Facilities Board are not legal entities of 
the City of Athens and accordingly are excluded from this report.
The government-wide financial statements can be found on pages A-1 to A-3 of this report.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over 
resources that have been segregated for specific activities or objectives. The City of Athens, like other 
state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements. All of the funds of the City of Athens can be divided into three categories: 
governmental funds, proprietary funds, and fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same functions 
reported as governmental activities in the government-wide financial statements. However, unlike the 
government-wide financial statements, governmental fund financial statements focus on near-term 
inflows and outflows of spendable resources, as well as on balances of spendable resources available at 
the end of the fiscal year. Such information may be useful in evaluating a government’s near-term 
financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial 
statements, it is useful to compare the information presented for governmental funds with similar 
information presented for governmental activities in the government-wide financial statements. By doing 
so, readers may better understand the long-term impact of the government’s near-term financing 
decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, 
expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between 
governmental funds and governmental activities.