What do debt service funds specifically account for?

Debt service funds are specifically designed to account for the financial resources that are required to pay for principal and interest expenditures related to the government's long-term debt. This includes tracking the inflows and outflows of funds used for making scheduled repayments on debt obligations, ensuring that the government can meet its obligations without impacting other areas of the budget.

These funds typically receive revenue from property taxes or specific revenue sources earmarked for debt service purposes, and they facilitate the management of cash needed to cover these specific liabilities. By maintaining a separate fund for debt service, the government can clearly demonstrate its commitment to fulfilling its debt obligations and provide transparency to taxpayers and creditors about how public funds are being used.