You are the Controller of Metroville. The new Mayor Keira Kenny has called you in. Keira studied finance in college and has knowledge of financial accounting, but no knowledge of Government accounting. She has asked you to write her a detailed letter explaining two particular areas of Government accounting: 1. The recording of the budget in the accounting records. 2. The recording of encumbrances.

Draft a one page letter to Mayor Kenney explaining the two concepts mentioned above.