What should the goal of an internal service fund be?

The primary goal of an internal service fund is to measure and recover full costs associated with the services provided. Internal service funds are used by governmental entities to account for activities that provide goods or services to other departments or agencies within the same government.

By aiming to recover full costs, the fund ensures that it covers all expenses, including direct costs (such as labor and materials) and indirect costs (like administrative overhead). This approach supports the financial integrity and sustainability of the fund, ensuring that it operates effectively without relying on subsidies from the general fund or other sources.

This method also promotes accountability and transparency, as users of the services can see the true cost of the services they are utilizing. It allows for better financial planning and resource allocation within the government structure, ensuring that internal service funds remain viable over time and can continue to support the operations they were established for.