2011 - Division of Administration - Louisiana

State of Louisianabusinesses by taking into account all revenues earned and expenses incurred in the fiscal year, regardless of whencash is received or paid.The government-wide financial statements include the following two statements:The Statement of Net Assets (page 28) presents the current and long-term portions of the assets and liabilities of theState separately and is the basic government-wide statement of position at fiscal year end. Using the format of assetsminus liabilities equal net assets, this statement reports the governmental activities separately from its business-typeactivities. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financialposition of the State is improving or deteriorating.The Statement of Activities (page 30) presents information showing how the net assets of the State changed as a resultof current year operations and how those operations were financed. This statement presents expenses before revenuesto emphasize the fact that revenues are generated expressly for providing services, rather than as an end inthemselves. Regardless of when cash is affected, all changes in net assets are reported when the underlyingtransactions occur. As a result, transactions are included that will not affect cash flows until future fiscal periods (e.g.,uncollected taxes and earned but unused leave).Both government-wide statements report three types of activities:Governmental Activities – The activities in this section are primarily supported by taxes and intergovernmental revenues(federal grants). Most services normally associated with State government fall into this section and they include generalgovernment; culture, recreation and tourism; transportation and development; public safety; health and welfare;corrections; youth services; conservation and environment; and education.Business-type Activities – These activities normally are intended to recover all or a significant portion of their coststhrough user fees and charges to external users of goods and services. The business-type activities operated by theState include the Patient’s Compensation Fund Oversight Board and the Unemployment Trust Fund, among others.Component units – Component units are legally separate organizations for which the elected officials of the governmentare financially accountable or have significant influence in governing board appointments. Among the component unitsincluded are public colleges and universities, the Louisiana Stadium and Exposition District, the Louisiana HousingFinance Agency, and the Louisiana Lottery Corporation. For a list of some of the component units included in thegovernment-wide statements, see Note 1 (page 45) of the notes to the basic financial statements.Fund Financial StatementsThe fund financial statements begin on page 31 and provide more detailed information than the government-widestatements by providing information about the most significant funds of the State. A fund is a grouping of relatedaccounts used to maintain control over resources, which are segregated for specific activities or objectives. The State ofLouisiana uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Forgovernmental activities, fund financial statements indicate how these services were financed in the short-term asopposed to the government-wide statements, which present a long-term view of the State finances. The threecategories into which the funds of the State can be classified are governmental funds, proprietary funds, and fiduciaryfunds.Governmental funds account for most of the functions reported as governmental activities in the government-widefinancial statements. Governmental fund financial statements focus on short-term inflows and outflows of expendableresources and the balances of these resources available at fiscal year end. Such information may be useful inevaluating the current financing requirements of the State. Governmental funds are reported using the modified accrualbasis of accounting, which measures cash and all other financial assets that can readily be converted to cash.GASB Statement 34 has shifted the focus of governmental fund financial statements from fund types to major funds.Louisiana accounts for its activities in 56 active funds; of this total, 21 are governmental funds, 20 are proprietary funds,and 15 are fiduciary in nature. Information is presented separately on the governmental funds balance sheet and thegovernmental funds statement of revenues, expenditures, and changes in fund balance for the funds determined to bemajor funds; the remaining governmental funds are presented in a single column on these statements. Combiningstatements for these funds are presented on pages 120 - 127 of this report.- 16 -