Comprehensive Annual Financial Report - Harford County Public ...

HARFORD COUNTY PUBLIC SCHOOLS
NOTES TO FINANCIAL STATEMENTS
June 30, 2011
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Cash and Investments (continued)
Investment in External Investment Pool
The Board has funds designated for Other Postemployment Benefits that are held by Maryland
Association of Boards of Education (MABE). As of June 30, 2011, MABE held $15,251,604 in
cash and cash equivalents in the investment pool for the Board. The investment policy of MABE
is set and monitored by MABE’s Board of Trustees. MABE primarily invests in registered
securities and mutual funds.
Due From Other Units of Government and Other Receivables
Due from other units of government consists primarily of amounts due for local and state
appropriations under the operating budget and capital projects and, expenditures in excess of
amounts received under grant agreements. Other receivables include amounts due from other
local education agencies for out of county tuition and the deposit with the Harford County
Consortium for stabilization of health insurance costs.
Accounts receivable are not collateralized, but are primarily with other governmental units and
related agencies. These entities rarely default on their obligations and management of the Board
considers all amounts collectible at June 30, 2011. Therefore, no valuation allowance is
provided against the amounts due.
Inventory
Inventory is valued at the lower of cost (first-in, first-out) or market. Inventory consists of
expendable food and supplies held for consumption. The cost is recorded as an asset at the time
individual inventory items are purchased. Inventory is charged to expenditures as the inventory
is consumed, except for USDA commodities inventory which is recorded as expenditures as the
inventory is acquired.
Compensated Absences
At June 30, 2011, annual and sick leave earned, applicable to governmental fund types, but not
taken by Board of Education employees, was $28,464,371. This amount is based on vested
accumulated leave as of June 30, 2011, for personnel eligible to receive annual leave benefits at
retirement. Sick leave is accrued for employees with at least ten years of service and calculated
at 25% of their annual daily rate up to a maximum of 200 days. An accrual in the amount of
$1,608,183 was made in the General Fund for the year ended June 30, 2011. This amount was
an estimate of the accumulated annual and sick leave which will be paid to retirees at the
beginning of the fiscal year ending June 30, 2012. The remaining liability for accumulated
annual and sick leave earned in the amount of $26,856,188 is reported as a noncurrent liability in
the Government-wide financial statements.
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