Internal Service Fund
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An Internal Service Fund is a proprietary fund for activities that involve fees for services provided to other organizational internal users.
- Context:
- It can range from being a Local Government Internal Service Fund (such as a city internal service fund) to being a State Internal Service Fund.
- Example(s):
- Counter-Example(s):
- an Enterprise Fund.
- a Fiduciary Fund.
- See: Governmental Activities Funds, Cost-Reimbursement Basis.
References
2016
- https://en.wikipedia.org/wiki/Fund_accounting#State_and_local_government_funds
- QUOTE: … Internal service funds are used for operations serving other funds or departments within a government on a cost-reimbursement basis. A printing shop, which takes orders for booklets and forms from other offices and is reimbursed for the cost of each order, would be a suitable application for an internal service fund.
2015
- http://ofm.wa.gov/policy/80.20.htm
- QUOTE: Internal Service Funds - used to account for the provision of goods or services by one department or agency to other departments or agencies of the state, or to other governmental units, on a cost-reimbursement basis. Internal service funds should only be used if the state is the predominant participant in the activity.
2013
- http://www.gfoa.org/pricing-internal-services
- QUOTE: Internal services are those responsibilities a government provides to support its own internal operations. Common examples of internal services include information technology, payroll, motor pool, budgeting, legal, accounting, and human resources. Certain management objectives are served by creating a system to assign prices for the use of these internal services, which are then assessed to the departments that use the services. However, there is a cost to develop and maintain internal pricing systems. … An internal service fund provides the most detailed accounting, but also entails the most administrative effort. If the goals of the internal charge are modest (e.g., not charging back to federal grants, full cost recovery is not a goal), then it may be easier to simply recognize the charge as a general revenue in the general fund (or some other fund as may be appropriate to the circumstances).