Fund Accounting in Public Sector

Fund accounting in the public sector is a financial management system that helps government entities track and manage resources allocated for specific purposes. Unlike traditional accounting, which focuses on profit, fund accounting emphasizes accountability and transparency. Each "fund" acts like a separate budget, ensuring that money is spent only for its designated use, such as education, public safety, or infrastructure. This method helps prevent overspending, ensures compliance with laws, and improves public trust by making it clear how taxpayer money is used to serve community needs.