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City of Raleigh

Financial Section

9. Net position/fund balances 

Net position in government‐wide and proprietary fund financial statements are classified as net investment in 

capital assets; restricted; and unrestricted.  Restricted net position represents constraints on resources that are either 

externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or imposed by 

law through state statute.  

In the governmental fund financial statements, fund balance is composed of five classifications designed to disclose 

the hierarchy of constraints placed on how fund balance can be spent.   

The governmental fund types classify fund balance as follows: 

Nonspendable Fund Balance

 – This classification includes amounts that cannot be spent because they are either 

(a) not in spendable form or (b) legally or contractually required to be maintained intact.   

Inventories

– portion of fund balance that is not an available resource because it represents the year‐end balance 

for inventories, which are not spendable resources. 

Assets held for resale

 – portion of fund balance that is not an available resource because it represents property 

that is available for sale, which is not a spendable resource. 

Loans receivable

 ‐ portion of fund balance that is not an available resource because it represents revolving loans 

receivable due to the City, which are not spendable resources.  

Restricted Fund Balance

 – This classification includes amounts that are restricted to specific purposes externally 

imposed by creditors or imposed by law.   

Restricted for stabilization by state statute

 ‐ portion of fund balance restricted by State Statute [G.S.15‐98(a)]. 

Restricted for debt service

– portion of fund balance that must be used to pay City obligations. 

Restricted for federal program reserves

 – portion of fund balance that is restricted by revenue source for federal 

programs. 

Restricted for streets

 – Powell Bill portion of fund balance that is restricted by revenue source for street 

construction and maintenance expenditures.   

Restricted for public safety

 – portion of fund balance that is restricted by revenue source for certain emergency 

telephone system expenditures. 

Committed Fund Balance 

– This classification includes a portion of fund balance that can only be used for 

specific purposes imposed by majority vote by quorum of City of Raleigh’s City Council.  The City Council, by 

adoption of an ordinance prior to the end of the fiscal year, commits fund balance. Once adopted, the limitation 

imposed by the ordinance remains in place until a similar action is taken (the adoption of another ordinance) to 

remove or revise the limitation. 

Committed for Law Enforcement Officers’ Special Separation Allowance Fund

 ‐ portion of fund balance committed 

for contributions to a defined benefit plan provided to City law enforcement officers. 

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