It is our audit position that the powers granted by various statutes, including IC 36-1-3, authorize the common council of a city or the town council of a town to create, by ordinance, as many funds as they feel necessary to operate their particular city or town. The enabling ordinance should provide various types of information:
- The ordinance should clearly indicate the type or types of revenue that is to go into the new fund.
- The ordinance should list the purpose or purposes for which expenditures can be made from the new fund.
- The ordinance should establish the life of the new fund and indicate if the fund balance is nonreverting at year end or perpetual until terminated either by the terms of the current ordinance or if another subsequent ordinance must be enacted.
- The ordinance should provide guidance as to disposition of the fund balance on termination of the fund.
- The ordinance should include any other terms or conditions the city or town attorney deems necessary.