FY 2009 Comprehensive Annual Financial Report - Harford County ...

HARFORD COUNTY PUBLIC SCHOOLS
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Fiduciary Funds
Scholarship and School Funds (Agency Fund) - Agency funds are used to account for assets held
by the Board in a trustee capacity. Scholarship funds account for monies that have been donated
for scholarships until awarded. The school funds account for student activities such as student
clubs, yearbooks and field trips. These funds are the direct responsibility of the principals of the
respective schools.
Retiree Health Plan Trust Fund – This fund was established to prefund other postemployment
benefits (OPEB) that the Board provides to retirees and their dependents of Harford County
Public Schools.
Applicability of Accounting Pronouncements
The accounting policies of Harford County Public Schools conform to accounting principles
generally accepted in the United States of America. Accordingly, the Board applies all
applicable Governmental Accounting Standards Board (GASB) pronouncements as well as the
following pronouncements issued on or before November 30, 1989, unless those
pronouncements conflict with or contradict GASB pronouncements: Statements and
Interpretations of the Financial Accounting Standards Board, Accounting Principles Board
Opinions, and Accounting Research Bulletins.
Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets, are reported as
governmental activities in the government wide financial statements. Capital assets are defined
by the Board as assets with an initial, individual cost of more than $5,000. Capital assets are
recorded at historical cost, or estimated historical cost if actual historical cost is not available.
Donated capital assets are valued at their estimated fair value on the date donated. The costs of
normal maintenance and repairs that do not add to the value of the asset or materially extend
asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized
as projects are constructed.
Property, plant and equipment are depreciated using the straight-line method over estimated
useful lives of 20-50 years for buildings, improvements and infrastructure, and 5-20 years for
equipment.
Assets which have been acquired with funds received through federal grants must be used in
accordance with the terms of the grant. Federal regulations require, in some cases, that the
Board must reimburse the federal government for any assets which the Board retains for its own
use after the termination of the grant unless otherwise provided by the grantor.
Budgets and Budgetary Accounting
The Board follows these procedures in establishing the budgetary data reflected in the financial
statements:
Budgetary compliance is measured using the budgetary basis of accounting, the purpose of
which is to demonstrate compliance with the legal requirements of Harford County, the State of
Maryland, and special federal and state programs.
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