What Is Municipal Accounting?

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  • Written By: Mary McMahon
  • Edited By: O. Wallace
  • Last Modified Date: 02 June 2020
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Municipal accounting is a branch of the accounting field which focuses on accounting services for municipalities such as city governments. This type of accounting can be performed by a certified public accountant (CPA) who may have pursued additional training in the area of municipal accounting. As a general rule, municipal accounting is open and transparent, as residents of a city have a right to know how the city is using its money.

Handling the accounting for a city government can get very complex. Cities receive income from a number of sources, including taxes, fees, and fines from citizens, along with grants and loans from other government entities. For example, a state government may provide grants to municipalities to help them repair their roads. Municipalities can also apply independently for grants from a number of sources, with all of this money being accounted for by a municipal accountant and the staff of the accounting office.

Cities also disburse funds in a variety of ways, handling paychecks to city employees and private contractors in addition to paying for fees such as insurance. A municipal accountant tracks income and payments for the city, creating clear records which demonstrate the way in which the city is using its money. These records may be open to inspection by members of the public, and they are also classically audited by the city government to confirm that the accounting practices are on the level, and to check for signs of irregularities which could indicate that funds are being embezzled or abused.

Depending on the size of a municipality, municipal accounting may be handled by a single accountant, or by a staff. The staff work with the city auditor as well as staffers such as employees in the payroll office and city employees who collect funds from citizens such as fees for water service or payments for parking tickets. The accountant also monitors city accounts at the bank, and responds to members of the public who are interested to know about the use of public funds.

A number of companies manufacture software which has been customized for use in municipal accounting. These accounting systems come in a range of styles, and are often available in evaluation form so that accountants can use them in a trial to see whether or not the software products are suitable for a city's accounting needs. Such software can be extremely useful at times when accountants want to generate reports and statistics, as these functions are often available at the touch of a button. Municipal accounting classes are available at many schools which provide accounting courses.

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