Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2004 BASIC FINANCIAL STATEMENTS Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities

State of Connecticut

Reconciliation of the Statement of Revenues, Expenditures and Changes
in Fund Balances of Governmental Funds to the Statement of Activities
June 30, 2004
(Expressed in Thousands)
Net Change in Fund Balances - Total Governmental Funds $ 426,379
Amounts reported for governmental activities in the Statement of Activities
are different because:
Bond proceeds provide current financial resources to governmental funds. However, issuing debt increases long term-liabilities in the Statement of Net Assets. Bond proceeds were received this year from:
Bonds Issued (1,395,545)
Refunding Bonds Issued (1,961,040)
Premium on Bonds Issued (269,058) (3,625,643)
Repayment of long-term debt is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Assets. Long-term debt repayments this year consisted of:
Principal Retirement 965,313
Payments to Refunded Bond Escrow Agent ($25,100 reported in debt service) 2,171,568
Capital Lease Payments 14,227 3,151,108
Capital outlays are reported as expenditures in the governmental funds. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. In the current period, these amounts are:
Capital Outlays 690,099
Depreciation Expense (654,603) 35,496
Inventories are reported as expenditures in the governmental funds when purchased. However, in the Statement of Activities the cost of these assets is recognized when those assets are consumed. This is the amount by which consumption exceeded purchases of inventories.
(4,657)
Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. These activities consist of:
Decrease in Accrued Interest 5,510
Decrease in Interest Accreted on Capital Appreciation Debt 8,835
Amortization of Bond Premium 26,234
Amortization of Loss on Debt Refundings (16,865)
Increase in Compensated Absences Liability (23,210)
Increase in Workers Compensation Liability (11,036)
Increase in Claims and Judgments Liability (5,571)
Increase in Net Pension Obligation (183,757) (199,860)
Because some revenues will not be collected for several months after the state's fiscal year ends, they are not considered "available" revenues and are deferred in the governmental funds. Deferred revenues increased by this amount this year.
17,857
Internal service funds are used by management to charge the costs of certain activities, such as insurance and telecommunications, to individual funds. The net revenue (expense) of internal service funds is reported with the governmental activities.
(42,526)
Debt issue costs are recorded as expenditures in the govenmental funds. However,
these costs are amortized over the life of the bonds in the Statement of Activities.
In the current year, these amounts are:
Debt Issue Costs Payments 24,356
Amortization of Debt Issue Costs (2,822) 21,534
Change in Net Assets of Governmental Activities $ (220,312)

The accompanying notes are an integral part of the financial statements.