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Notes to the Financial Statements June 30, 2020 /. Net Position and Fund Balances (continued) Fund Financial Statements Nonspendable fund balance - This amount indicates that portion of fund balance which cannot be spent because it is either not in spendable form or legally or contractually required to be maintained intact. Restricted fund balance - This amount indicates that portion of fund balance which has been restricted to specific purposes by external parties, constitutional provisions, or enabling legislation. Committed fund balance - This amount indicates that portion of fund balance which can only be used for specific purposes pursuant to formal action of the District's Board of Directors. Assigned fund balance - This amount indicates that portion of fund balance which is constrained by the District's intent it be used for specific purposes, but is neither restricted nor committed. The Board of Directors has designated the General Manager the authority to assign fund balances. Unassigned fund balance - This amount indicates the residual portion of fund balance. Use of restricted and unrestricted fund balances When expenditures are incurred for purposes for which both restricted and unrestricted fund balances are available, the District's policy is to apply restricted fund balances first, then unrestricted fund balances as they are needed. When expenditures are incurred for purposes for which unrestricted fund balances are available, the District uses the unrestricted resources in the following order: committed, assigned, and unassigned. J. Use of Estimates The preparation of the basic financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and assumptions affect certain reported amounts and disclosures. Accordingly, actual results could differ from these estimates and assumptions. 32