What do special funds track?

Special funds are designed to track specially identified revenues and their dedicated uses. These funds are often established to ensure that certain revenues generated for specific purposes are used strictly for those purposes. For instance, if a government collects taxes or fees that are earmarked for a particular service or project—like road maintenance or education—those funds will be categorized within a special fund to guarantee that they are applied accordingly. This structure not only promotes accountability but also facilitates transparency in government financial reporting, ensuring that stakeholders can see how resources are allocated and used based on the intended purpose of the revenues collected.