As of June 30, 2004, the beginning net assets/fund balances for the following funds and activities were restated as follows (amounts in thousands):
| Correction | ||||
|---|---|---|---|---|
| Balance | of | Balance | ||
| 6-30-03 | Reported | 6-30-03 | ||
| Previously | Fund | Assets/ | as | |
| Reported | Reclass | Liabilities | Restated | |
| Governmental Funds and Activities | ||||
| Major Funds: | ||||
| General | $ (401,499) | $ - | $ 19,656 | $ (381,843) |
| Transportation | 158,277 | - | 10,026 | 168,303 |
| Nonmajor Funds: | ||||
| Environmental Programs | 119,603 | 26,934 | - | 146,537 |
| Total Governmental Funds | $ (123,619) | $ 26,934 | $ 29,682 | $ (67,003) |
| Governmental Activities | ||||
| Capitalization of Software Costs | - | - | 70,422 | 70,422 |
| Net Assets of Governmental Activities | $ (5,346,984) | $ 26,934 | $ 100,104 | $ (5,219,946) |
| Proprietary Funds and Business-Type Activities | ||||
| Major Funds: | ||||
| Higher Education | $ 2,535,973 | $ (2,535,973) | $ - | $ - |
| University of Connecticut | - | 1,525,227 | - | 1,525,227 |
| State Universities | - | 464,000 | (9,750) | 454,250 |
| Non-Major Funds: | ||||
| Community Technical Colleges | - | 304,775 | - | 304,775 |
| Total Proprietary Funds | $ 2,535,973 | $ (241,971) | $ (9,750) | $ 2,284,252 |
| Net Assets of Business-Type Activities | $ 3,875,072 | $ (241,971) | $ (9,750) | $ 3,623,351 |
| Component Units | ||||
| Connecticut Health & Educational Facilities Authority | $ - | $ 19,975 | $ - | $ 19,975 |
| Connecticut Resources Recovery Authority | 117,489 | (117,489) | - | - |
| Other Component Units | ||||
| Connecticut Resources Recovery Authority | - | 117,489 | - | 117,489 |
| Connecticut Health & Educational Facilities Authority | 19,975 | (19,975) | - | - |
| Connecticut Higher Education Supplemental Loan Authority | 6,438 | - | (1,220) | 5,218 |
| Connecticut Innovations, Incorporated | 136,683 | (31,900) | - | 104,783 |
| Uconn Foundation | - | 241,970 | (29,522) | 212,448 |
| Total Component Units | $ 280,585 | $ 210,070 | $ (30,742) | $ 459,913 |
| Net Assets of Component Units | $ 1,112,011 | $ 210,070 | $ (30,742) | $ 1,291,339 |
In July 2003 the State implemented a new Internet-based financial management and human resources system. As of 6-30-04, the State had spent $101.9 million in implementation costs. Of this amount, $85.9 million represents costs incurred in developing the software for its intended use. For example, software and license fees, equipment, consulting fees, etc. These costs, of which $70.4 million were incurred prior to fiscal year 2004, are being capitalized and amortized over their estimated useful life in the government-wide financial statements, governmental activities. Other implementation costs, such as planning and training and support, were expensed when incurred.
During the year, the State implemented GASB Statement No.39, "Determining Whether Certain Organizations Are Component Units." This Statement requires the State to report certain organizations (mainly fund-raising foundations) as component units (discrete presentation). Thus, the State reclassified this year the University of Connecticut Foundation, Inc. as a discretely-presented component unit. In prior years, the Foundation was reported as a component unit of the Higher Education fund, an enterprise fund.
Also, the following reclassifications were made this year to improve financial reporting of enterprise funds and component units:
1) The University of Connecticut, the State Universities, and the Community/Technical colleges were reclassified as separate enterprise funds. In prior years, these funds were reported as part of the Higher Education fund, an enterprise fund.
2) The Clean Energy fund was reclassified as a special revenue fund. In prior years, this fund was reported as part of the Connecticut Innovations, Inc. fund, a component unit.
The beginning fund balance of the General fund was adjusted to correct understatements of cash ($2.8 million) and taxes receivable ($16.9 million). For the Transportation fund, the adjustment reflects a reduction of $10 million to deferred revenue because revenue recognition requirements on related resources had been met in the prior year. For the University of Connecticut Foundation, Inc., the adjustment reflects a reduction of $29.5 million to pledges receivable because such pledges should not be recognized as an asset until the resources are received by the Foundation.