What is a requirement for fiduciary funds in the SSAP?

Fiduciary funds primarily serve to account for resources held by a government in a trustee capacity for others and ensure that these funds are used for their intended legal and administrative purposes. In the context of the State and Local Governmental Accounting and Financial Reporting Standards (SSAP), it is essential that fiduciary funds be reported separately from operating funds. This is crucial because fiduciary funds are not available for general government use and their activities are distinct from the regular operations of government funds.

This separation allows stakeholders to clearly understand the financial position and activities of the government without conflating funds that are restricted for specific purposes with those that are part of the normal operational budget. Hence, maintaining distinct reporting for fiduciary funds enhances transparency and accountability in financial reporting.