Page 22 - Moreno Valley 2025 Annual Financial Report

Government-wide Financial Statements. The government-wide statements report information about
the City as a whole using accounting methods similar to those used by private-sector companies. The
statement of net position includes all of the City’s assets and liabilities, as well as any deferred outflows
or inflows of resources. The statement of activities includes all current year revenues and expenses
regardless of when cash is received or paid. These government-wide statements report the City’s net
position and how the City’s net position has changed during the fiscal year. Over time, increases or
decreases in net position may serve as a useful indicator of whether the financial health of the City is
improving or deteriorating.

The government-wide financial statements of the City are divided as follows:

• Governmental activities - Most of the City’s basic services are included here, such as police, fire, public
works, community development, parks and recreation, and general government. Taxes and state and
federal grants finance most of these activities.
• Business-type activities - Certain services provided by the City are funded by customer fees. The
business-type activities of the City include the Electric Utility.
• Component unit - The City includes the Moreno Valley Community Services District, Moreno Valley
Public Financing Authority, the Moreno Valley Public Facilities Financing Corporation, and the Moreno
Valley Housing Authority in its basic financial statements because, although legally separate, the City
is financially accountable for them.

Fund Financial Statements. A fund is a group of related accounts that is used to maintain control over
resources that have been segregated for specific activities or objectives. Fund financial statements
provide more detailed information about the City’s largest funds, not the City as a whole. All of the funds
of the City can be divided into three categories: governmental, proprietary and fiduciary.
Governmental funds - Governmental fund statements tell how general government services such as police,
fire and public works were financed in the short-term as well as what remains for future spending. Most
of the City’s basic services are included in governmental funds, which focus on (1) short-term inflows
and outflows of spendable resources, and (2) the remaining year-end balances available for spending.
Because this information does not encompass the additional long-term focus of the government-wide
statements, reconciliations that explain the relationship (or differences) between governmental funds and
governmental activities follow the governmental fund statements.

Information regarding governmental funds is presented separately in the governmental funds balance
sheet and in the governmental funds statement of revenues, expenditures and changes in fund balances
for the General Fund, the Development Impact Fees, the Community Services District (CSD) Zones, and the
Housing Authority. All of these are considered to be major funds. Data from the other governmental funds
are combined into a single, aggregated presentation. Individual fund data for each of these non-major
governmental funds is provided in the supplementary section of the report in the form of combining
statements.

Proprietary funds - The City maintains two different types of proprietary funds, enterprise and internal
service funds. Enterprise funds are used to report the same functions presented as business-type activities
in the government-wide financial statements. The City uses an enterprise fund to account for its Electric
Utility. Internal service funds are an accounting device used to accumulate and allocate costs internally
among the City’s various functions. The City uses internal service funds to account for self-insured
insurance programs, technology services, facilities maintenance, fleet operations, equipment replacement,
and unfunded liabilities. Because these services predominantly benefit governmental rather than
business-type functions, they have been included within governmental activities in the government-wide
financial statements.

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