2011 - Division of Administration - Louisiana

State of Louisianathe basic financial statements, and required supplementaryinformation other than the MD&A. The MD&A provides ananalytical overview of the financial activities of the State.The basic financial statements include the governmentwidefinancial statements, fund financial statements, andnotes to the basic financial statements.The government-wide statements consist of a Statement ofNet Assets and a Statement of Activities. Thesestatements are prepared using the economic resourcesmeasurement focus and accrual basis of accounting. Majorrevenues such as sales tax, general severance tax,gasoline tax, and tobacco tax are assessed, collected, andsusceptible to accrual. Assets, liabilities, revenues, andexpenses of the government are reported in the financialstatements. The statements distinguish between thegovernmental and business-type activities of the primarygovernment and between the total primary governmentand its component units by reporting each in separatecolumns. Fiduciary activities and component units that arefiduciary in nature, whose resources are not available tofinance the government’s programs, are excluded from thegovernment-wide statements.All capital (long-lived) assets, receivables, and long-termobligations are reported in the Statement of Net Assets.The Statement of Activities reports revenues andexpenses in a format that allows the reader to focus on thenet cost of each function of the State. Both the gross andnet cost per function, which is otherwise being supportedby general government revenues, is compared to therevenues generated directly by the function. In theStatement of Activities, gross expenses, includingdepreciation, are reduced by related program revenues,which are comprised of charges for services, operatinggrants, and capital grants. Direct and indirect expenses arereported as program expenses for individual functions andactivities. The program revenues must be directlyassociated with the function or a business-type activity.The types of transactions included in program revenuesare sales of commodities, licenses, permits, and fees. Theoperating grants include operating-specific anddiscretionary (either operating or capital) grants, while thecapital grants column reflects capital-specific grants.The fund financial statements report the State as acollection of major and nonmajor funds presented onseparate schedules by fund category – governmental,proprietary, and fiduciary funds.• The governmental fund statements include a balancesheet and a statement of revenues, expenditures, andchanges in fund balances, with one column for theGeneral Fund, one for each of the other major funds,and one column combining all the nonmajorgovernmental funds. The statements are preparedusing the current financial resources measurementfocus and the modified accrual basis of accounting.Revenues are recognized in the accounting period inwhich they become measurable and available tofinance expenditures of the current period, generallyconsidered 45 days after the end of the fiscal year,except for federal grants, which generally areconsidered available for 12 months after the end of thefiscal year. Expenditures are recognized in theaccounting period in which the fund liability is incurred,if measurable, except for unmatured interest paymentson general long-term liabilities, which are recognizedwhen due.• The proprietary fund statements include a balancesheet; a statement of revenues, expenses, andchanges in fund net assets; and a statement of cashflows. Each statement has a column for the majorenterprise fund, one that combines all the nonmajorenterprise funds, and one column that reports allinternal service funds. The proprietary fund statementsare prepared using the economic resourcesmeasurement focus and the accrual basis ofaccounting, in order to make a determination of netincome, financial position, and cash flows. Internalservice funds are included in governmental activitiesfor government-wide reporting purposes, and theexcess revenues or expenses from the funds areallocated to the appropriate functional activity.• The fiduciary fund statements include a statement offiduciary net assets and a statement of changes infiduciary net assets, with one column for each of thefour types of fiduciary funds. The statements areprepared using the economic resources measurementfocus and the accrual basis of accounting, except foragency fund statements which use the accrual basisbut do not have a measurement focus, as they reportonly assets and liabilities.Although the financial statements presented in each ofthese three schedules contain “total” columns, they merelycombine rather than consolidate the funds. Hence,interfund transactions that generate receivables andpayables or transfers from one fund to another are noteliminated.Major funds are those whose revenues,expenditures/expenses, assets, or liabilities are at least 10percent of the total for their fund category or type(governmental or enterprise) and at least 5 percent of thecorresponding element total for all governmental andenterprise funds combined.The data on the face of the three sets of financialstatements must be accompanied by certain disclosures toensure accurate information is presented in the financialreport. This additional information is presented in the formof a single set of notes to the basic financial statements.Governmental FundsThe major governmental funds of the State are theGeneral Fund, the Bond Security and Redemption Fund,Capital Outlay Escrow Fund, and the Louisiana EducationQuality Trust Fund.- 50 -