Video: Governmental Revenues - Special Revenue Fund

In this lesson, join Nick Palazzolo, CPA, as he demystifies the workings of the Special Revenue Fund used by government entities. He maps out the journey of funds that are legally earmarked for particular uses not covered by other funds, such as debt service or capital projects. With relatable examples like Red Light Camera Funds and Alcohol Tax Funds, Nick clarifies how these revenues are tightly coupled with their specific purposes. He wraps up with a reminder of the legal requirements that safeguard the use of Special Revenue Funds, ensuring they are utilized as intended and can't be diverted for unauthorized expenses.

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Video Transcript

Instructor: Nick Palazzolo

Nick Palazzolo is head instructor of ExamPrep.ai CPA Review. Nick's teaching style is engaging & upbeat, combining practical Big 4 tax & assurance expertise with years of 1-on-1 coaching. His lessons are concise and emphasize what you need to know to pass. Whether you're a recent grad or working full-time, we’re confident you can conquer your CPA exams with Nick’s review.

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Right now, the Special Revenue Fund, as we mentioned, manages revenues and expenditures that are earmarked specifically for special purposes, purposes not included in other funds such as debt service or capital projects. These revenues are legally restricted to a specific revenue source and a specific use. Examples can be Red Light Camera Funds, so anytime you run a red light, they pay for road repair; Alcohol Tax Fund, maybe we charge an extra 3% on any alcohol purchases and this goes to improve infrastructure; and Speeding Ticket Fund, so maybe any speeding tickets incurred during this period are going to fund awareness of drunk driving.

Remember that the usage of these monies are legally restricted and so must be used for the intended purpose, right? So in theory, the governor can't take the money from the and just blow it on a bunch of expensive fancy meals. Maybe that happens. I'm not one to judge, but these are legally restricted.

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Module: 3 Concepts, 29 Videos

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