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The Town reported the following types of reserves and designations at June <br /> 30, 1996: <br /> Reserved for Encumbrances -An account used to segregate that portion of <br /> fund balance committed for expenditure of financial resources upon vendor <br /> performance. <br /> Reserved for Endowments - Represents the principal of the nonexpendable <br /> trust fund investments. The balance cannot be spent for an purpose; how- <br /> ever, it may be invested and the earnings may be spent. <br /> 12. General Fund Undesignated Fund Balance <br /> I <br /> The undesignated general fund balance reported on the balance sheet is <br /> stated in accordance with generally accepted accounting principles (GAAP), <br /> which differs in certain respects from the Massachusetts Uniform Municipal <br /> Accounting System (UMAS). The following paragraphs summarize the major <br /> differences. <br /> Massachusetts general laws include provisions to allow municipalities to <br /> overexpend certain appropriations if they are incurred in an emergency <br /> situation and for the safety of the public. The most common example <br /> involves the "snow and ice" appropriation. All such overexpenditures, <br /> however, must be funded in the subsequent year's tax rate. <br /> Massachusetts General Laws require that non-property tax revenue budget <br /> shortfalls, net of appropriation turnbacks, be funded in the subsequent <br /> year. The same treatment is also applied to the excess of actual property <br /> tax abatements and exemptions over the provision for abatements and <br /> exemptions (overlay). <br /> The following summarizes the specific differences between GAAP basis and <br /> statutory basis of reporting the general fund undesignated fund balance: <br /> GAAP basis balance $ 4,331,809 <br /> Overlay deficits 2,652 <br /> Over/under assessments 6,411 <br /> Statutory (UMAS) balance $ 4.340.872 <br /> 20 <br />