I started using Enhanced mid year, and need to enter year-to-date information for all my employees. How is this done?

Go to the Systems Utilities module, Data Entry tab and select Initialize Payroll Earnings and Deductions. Select an employee; enter the last date the employee was paid from the old system, and the check number used by the old system. Click on the “Deductions” tab and enter any deduction description (i.e. union dues, NYS retirement etc.). Now enter the type and total y-t-d amount of the respective deduction. Click on the “Taxes” tab and enter the Federal, State, FICA, and Medicare amounts. Be sure to specify the State as NY and FICA and Medicare as “1” (under Jurisdiction).

Colorado Fund Accounting | Enhanced Business Systems

When you look at the financial statements of a private corporation, the primary goal is simple: profitability. However, when you look at the finances of a government entity, the goal shifts from turning a profit to demonstrating public accountability. This is where fund accounting comes in.

Fund accounting is a specialized financial management system used primarily by non-profit organizations and government entities. Instead of pooling all resources into a single general ledger, fund accounting divides money into distinct, self-balancing sets of accounts—known as “funds”—based on the specific rules, restrictions, and legal mandates attached to those dollars.

The Core Elements of Fund Accounting

In a government setting, money isn’t just money; it has a legally binding job to do. Fund accounting categorizes these financial resources into a few primary buckets:

The General Fund: This is the primary operating fund. It acts as the “catch-all” for unrestricted tax revenues and pays for standard day-to-day government operations, such as public safety and administration.
Special Revenue Funds: These are used to track money that is legally restricted to be spent on a specific purpose. For example, a gas tax that must be used exclusively for road and bridge repair would live here.
Capital Projects Funds: These accounts hold resources earmarked for the acquisition or construction of major capital assets, like a new courthouse or a public school building.
Enterprise Funds: These operate similarly to a private business. The government charges user fees for a service, and the revenue generated pays for the operation of that service (e.g., public utilities, toll roads, or state university auxiliaries).

Why Fund Accounting is Essential

The primary purpose of fund accounting is transparency and legal compliance. When a state passes a law dictating that a certain tax will pay for a certain service, the public needs a mechanism to verify that the government kept its promise. Fund accounting provides a clear, auditable trail proving that restricted revenues were not illegally co-mingled or spent on unrelated administrative costs.

Why Fund Accounting is Crucial for Colorado = Colorado Fund Accounting

While fund accounting is used by every state, it is uniquely critical to the state of Colorado due to its highly complex constitutional and regulatory environment.

1. Navigating the Taxpayer’s Bill of Rights (TABOR)

Passed in 1992, the Taxpayer’s Bill of Rights (TABOR) is an amendment to the Colorado Constitution that strictly limits the amount of revenue the state can retain and spend. The revenue cap grows only by the rate of inflation and population growth. Any money the state collects over this limit—the “TABOR Surplus”—must be refunded to taxpayers.

Fund accounting is the mathematical engine that makes TABOR compliance possible. Colorado cannot simply look at a single bank account balance to determine if it exceeded the TABOR limit, because not all state revenue is subject to TABOR.

TABOR-Subject Funds: Standard income taxes and general sales taxes (2.9%) are subject to the cap.
TABOR-Exempt Funds: Revenues from voter-approved taxes or funds generated by formally designated “Enterprise Funds” are exempt.

State accountants rely heavily on fund ledgers to meticulously separate subject revenues from exempt revenues, ensuring the state calculates the precise surplus required for the annual TABOR refund checks.

2. Tracking Marijuana Tax Revenue

Colorado’s legalized marijuana industry provides a textbook example of complex fund accounting in action. When voters legalized recreational marijuana, they approved a 15% special sales tax and a 15% excise tax. Because voters approved them, these specific taxes are exempt from TABOR limits. However, the standard 2.9% state sales tax applied to medical marijuana and non-marijuana products in dispensaries is subject to TABOR.

Colorado uses strict fund accounting to segregate these revenue streams at the point of collection. Once collected, the accounting system automatically funnels precise, legally mandated percentages of the special sales and excise taxes into the Marijuana Tax Cash Fund, the State Public School Fund, and to local municipalities.

3. Ring-Fencing Education Funding

A significant portion of Colorado’s specialized revenues is earmarked for education. For example, the marijuana excise tax helps fund the Building Excellent Schools Today (BEST) program, which provides grants for public school construction. Through Capital Projects Funds and Special Revenue Funds, Colorado guarantees that the money intended to build a new roof for a rural school district is not accidentally spent on standard state administrative overhead.

Ultimately, fund accounting allows a state like Colorado to navigate a maze of constitutional mandates, voter-approved initiatives, and highly regulated industries. It provides the financial guardrails necessary to prove to taxpayers that their money is being spent exactly where the law dictates.