athens tn acfr fy2022

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City of Athens, Tennessee

Management’s Discussion and Analysis
June 30, 2022

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 5-6 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.

The City of Athens maintains thirteen individual governmental funds. Information is presented separately
in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures,
and changes in fund balances for the General Fund, the General Purpose School Fund, the Capital

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