What is an Enterprise Fund?

An enterprise fund is a self-supporting government fund that sells goods and services to the public for a fee. These funds are a good way to assure the long-term sustainability of a variety of government-owned infrastructure systems, since they do not require allocations of tax proceeds from the general fund.

An enterprise fund uses the same accounting framework followed by entities in the private sector, such as GAAP or IFRS.

Example of an Enterprise Fund

As an example of an enterprise fund, a government-owned power generating facility provides electricity to local homeowners in exchange for a fee. As another example, a water district provides water to its customers in exchange for a usage fee.