CITY OF LAGUNA NIGUEL NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2024 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) O. Net Position and Fund Balances (Continued) Unassigned fund balance. Unassigned fund balance is a residual (surplus) classification used for the General Fund only and includes amounts not contained in the other classifications. Unassigned amounts in the General Fund are available for any purpose. If a governmental fund, other than the General Fund, has a fund balance deficit, it will be reported as a negative amount in the unassigned classification in that fund. Spending Policy Government-Wide Financial Statements and the Proprietary Fund Financial Statements When expenses are incurred for purposes for which both restricted and unrestricted components of net position are available, the City’s policy is to apply the restricted component of net position first, then the unrestricted component of net position as needed. Governmental Fund Financial Statements When expenditures are incurred for purposes for which all restricted, committed, assigned, and unassigned fund balances are available, the City’s policy is to apply in the following order, except for instances wherein an ordinance specifies the fund balance: x Restricted x Committed x Assigned x Unassigned P. Use of Estimates The preparation of basic financia uires l statements in accordance with U.S. GAAP req managemen ported amounts t to make estimates and assumptions that affect certain re and disclosures. Accor dingly, actual results could differ from these estimates and s. assumption NOTE 2 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY Deficit Fund Balance The following funds had a deficit fund balance at June 30, 2024: Special Revenue Funds: CDBG $ ( 2,482) Miscellaneous Grants (315,152) (48)