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Budgetary Information Budgetary Basis of Accounting — Annual budgets for the General, Water, and Sewer funds, are adopted on a basis consistent with accounting principles generally accepted in the United States of America. A form of encumbrance accounting is employed as an extension of budgetary control in all governmental funds, under which purchase orders, certain contracts and other commitments outstanding at year-end for the expenditure of monies (encumbrances) are recorded as an assignment of fund balance. All unencumbered appropriations lapse at the end of the fiscal year. On January |*, encumbrance assignments outstanding at year-end are reappropriated to the ensuing year's original budget. The Capital Projects Fund appropriations are not included in the Village’s annual budget. Instead, appropriations are approved through a Village Board resolution at the project's inception and lapse upon conipletion of the project. Management does not prepare.a budget for the Community Development Fund as the nature of the revenues into and expenditures out of that fund are not of the type where the usefulness of a budget would exceed the time and cost needed to prepare one. The Village did not report any encumbrances at May 31, 2025. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance Cash and Cash Equivalents — Cash and cash equivalents include cash on hand, demand deposits, time deposits and short-term, highly liquid investments which are readily convertible to known amounts of cash and have a maturity date within 90 days of the Village's original acquisition date. Restricted Cash and Cash Equivalents — Restricted cash and cash equivalents represents amount to support fund balance restrictions, unearned revenue, and unspent proceeds of debt. This also reflects restricted cash related to construction commitments for ongoing capital projects. Prepaids — Certain retirement payments reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased. The Village did not report any prepaids at May 31, 2025. Capital Assets — Capital assets, which include land, buildings, improvements, equipment, and infrastructure assets (e.g. roads, bridges, drainage systems and similar items) are disclosed in the notes to the financial statements. Capital assets are defined by the- Village as assets with an initial, individual cost of an established threshold for the type as asset and an estimated useful life in excess of one year. Such assets are recorded at historical cost. The reported value excludes normal maintenance and repairs, which are essentially amounts spent in relation to capital assets that do not increase the capacity of efficiency of the item or extend its useful life beyond the original estimate. Donated capital assets are recorded at estimated fair value at the date of donation. The Village does not record depreciation expense on its capital assets. Deferred Outflows/Inflows of Resources — \n-addition to assets, the Statement of Net Position (not presented in this report) will sometimes report a separate section for defetred-outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period and so will not be recognized as an outflow of resources (expense/expenditure) until then. At May 31, 2025, the Village has one item that qualifies for reporting in this category. This item represents the effect of the net change in the Village’s share of the collective net pension liability and the difference during the measurement period between the Village’s contributions and its proportionate share of the total contribution to the pension system not included in 17