3.1 The Basic Unit of Reporting: The Government Entity

3.11 Types of Government Entities

3.12 Definition of a Government Entity (See Note 1)

In summary, a government entity is defined for Census Bureau reporting as follows:

A government is an organized entity which, in addition to having governmental character, has sufficient discretion in the management of its own affairs to distinguish it as separate from the administrative structure of any other governmental unit.

Thus, to be regarded as a government for Census Bureau purposes, an entity must possess all three of these critical attributes: existence as an organized entity, governmental character, and substantial autonomy. Each is explained below.

Existence as an Organized Entity:

Evidence of this attribute is provided by the presence of some form of organization and the possession of some corporate powers, such as perpetual succession, the right to sue and be sued, have a name, make contracts, acquire and dispose of property, and the like.

Designation of a class of governments in law as "municipal corporations," "public corporations," "bodies corporate and public," and the like indicates that such units are organized entities. On the other hand, some entities not stated specifically by law as corporations do have sufficient powers to be recognized as governments.

Obviously, the mere right to exist is not sufficient. Where a former government has ceased to operate--i.e., receives no revenue, conducts no activities, and has no current officers-- it is not recognized as an active government.

Governmental Character:

This characteristic is indicated where officers of the entity are popularly elected or are appointed by public officials. A high degree of responsibility to the public, demonstrated by requirements for public reporting or for accessibility of records to public inspection, is also taken as critical evidence of governmental character.

Governmental character is attributed to any entities having power to levy property taxes, power to issue debt paying interest exempt from Federal taxation, or responsibility for performing a function commonly regarded as governmental in nature. A lack of these attributes or of evidence about them, however, does not preclude a class of units from being recognized as having governmental character, if it meets the indicated requirements as to officers or public accountability. Thus, some special district governments with no taxing powers provide electric power or other public utility services that are also widely rendered privately; they may be recognized as local governments because of provisions as to their administration and public accountability.

Substantial Autonomy:

This requirement is met where, subject to statutory limitations and any supervision of local governments by the state, an entity has considerable fiscal and administrative independence. Fiscal independence generally derives from power of the entity to determine its budget without review and detailed modification by other local officials or governments, to determine taxes to be levied for its support, to fix and collect charges for its services, or to issue debt without review by another local government.

Administrative independence is related closely to the basis for selecting the governing body of the entity. Accordingly, a public agency is recognized as an independent government if it has independent fiscal powers and in addition (1) has a popularly elected governing body; (2) has a governing body representing two or more state or local governments; or (3) even in the event its governing body is appointed, performs functions that are essentially different from those of, and are not subject to specification by, its creating government.

Conversely, separate existence is not attributed to entities which lack either fiscal or administrative independence. Some local government agencies having considerable fiscal autonomy are classified as dependent agencies of another government rather than as governments because one or more of the following characteristics is present:

(1) Control of the agency by a board composed wholly or mainly of parent government officials.

(2) Control by the agency over facilities that supplement, serve, or take the place of facilities ordinarily provided by the creating government.

(3) Provision that agency properties and responsibilities revert to the creating government after agency debt has been repaid.

(4) Requirements for approval of agency plans by the creating government.

(5) Legislative or executive specification by the parent government as to the location and type of facilities the agency is to construct and maintain.

(6) Dependence of an agency for all or a substantial part of its revenues on appropriations or allocations made at the discretion of another state or local government.

(7) Provision for the review and the detailed modification of agency budgets by another local government. County review of agency budgets in connection with statutory limitations on tax rates, however, is not, by itself, sufficient to establish lack of fiscal autonomy.

3.22 Utilities Sector

Except for these four types of utilities and the liquor stores sector below, all commercial-type activities of a government-- airports, toll roads and bridges, housing projects, parking facilities, port facilities, lotteries, Federal Government corporations (e.g., TVA), and the like--are classed in the general government sector.

3.23 Liquor Stores Sector

3.24 Insurance Trust Sector

Note that the insurance trust category applies only to the government actually administering the system. A government's participation in an insurance trust administered either privately or by another government is not treated as an insurance trust activity of the participating government. Generally, it would be treated as a current operations expenditure for the paying activity in the general government, utilities, or liquor stores sector.

No employment activity is associated with this sector; employees involved in administering insurance trust systems are classed in the general government sector.

3.3 How Census Bureau Statistics Relate to Original Data Sources

The major reason for this seeming disparity is one of the major purposes of this classification system: to provide finance and employment statistics that are consistent for all governments surveyed. Governments differ greatly in their size, activities, organization, responsibilities, and the internal methods they use to report them. The financial structure and reporting systems devised by governments also differ widely, being designed mainly to enforce fidelity and to help officials to plan and administer the affairs of the government effectively.

Amongst this diversity, the Census Bureau collects statistics which must be presented in a consistent and uniform manner for all governments covered. Thus, a government's original data are re-categorized within a standard framework based on the common nature of particular activities or transactions in order to overcome barriers to both useful summation and direct comparisons that result from the varied nature of government records and reports.

Thus, the Bureau often recasts the data extracted from original sources in the ways described below.

3.31 Federal Government Statistics

This involves (1) grouping individual Federal receipts and expenditures for various agencies and appropriations according to the functional framework described in Chapter 4 and (2) applying certain adjustments to many of those items to derive finance amounts consistent with those reported for state and local governments. These adjustments take into account the following major differences between the Federal reporting scheme and the Census Bureau's classification system.

In particular, Census Bureau statistics on public debt cover debt instruments that have been issued by authority of the government (with or without its full-faith and credit) which may be omitted from the government's own central report or records. The largest category of indebtedness today, Public Debt for Private Purposes, includes debt that often is not viewed by the issuing government as its own despite the use of its governmental powers to grant the debt its critical tax-exempt status. A government's central records or finance reports may also exclude particular revenue or expenditure items maintained in separate records but which are incorporated into Census Bureau statistics.

3.33 Treatment of Accounting Funds

Census Bureau finance statistics, in contrast, are organized to show information for each government as a single financial entity, not to distinguish the activities of any particular accounting fund or group of funds. Government accounting also identifies financial transactions that occur between these funds. As discussed in Section 6.6, the Bureau generally ignores (or "nets out") such transactions to avoid duplication. Census Bureau statistics on functional expenditures for an activity, for instance, may summarize outlays from numerous accounting funds (except interfund activities). Even when a government's own financial report combines its funds, the basis for doing so may differ from that applied by the Bureau.

Moreover, the methods the Bureau uses to produce financial statistics from these accounting statements cause the data to lose their accounting nature completely. For these reasons, users can derive limited information about the fiscal condition of the government, such as budget surplus or deficit or the operating balance of a fund at the end of the fiscal year.

3.34 Terminology and Classification

In both its finance and employment statistics, the Bureau emphasizes the functional nature of activities by combining finances and employment from all accounting funds by all agencies according to the functional categories described in Chapter 4. But governments also vary in how they organize their activities. Some governments have departments devoted to a single activity (e.g., "highways" or "solid waste management") that directly corresponds to a Census Bureau category. In other cases, an agency may be responsible for a wide variety of functions (e.g., "transportation" or "human resources"), requiring the Bureau to distribute data on its activities among numerous Census categories. Often, statistics for a Census function may be a composite of multiple agencies of a government--e.g., "highways" employment may include a highways department, toll road authority, and bridge commission.

3.35 Reporting Periods

Employment data:Employment and payroll data are based on the one pay period that includes March 12 of the survey year. The payroll data are converted to a one month figure using a conversion factor based on the pay period (see Chapter 5 for details).