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, 2011    
(Expressed in Thousands)    
Net Change in Fund Balances - Total Governmental Funds   $(69,086)
     
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 (1,619,625)  
Refunding Bonds Issued (412,870)  
Premium on Bonds Issued (74,583) (2,107,078)
     
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 1,273,278  
Payments to Refunded Bond Escrow Agent 433,910  
Capital Lease Payments 2,796 1,709,984
     
Some capital assets acquired this year were financed with capital leases. The amount    
financed by leases is reported in the governmental funds as a source of financing, but    
lease obligations are reported as long-term liabilities on the Statement of activities   (4,089)
     
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 and    
other reductions were as follows:    
Capital Outlays 1,197,947  
Depreciation Expense (836,178)  
Retirements (16) 361,753
     
Loans issued during the year are reported as expenditures in the governmental funds.    
However, loans receivable are reported as an asset in the Statement of Net Assets.    
This is the amount of loans issued during the year.   3,419
     
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.   (800)
     
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:    
Increase in Accrued Interest (30,097)  
Decrease in Interest Accreted on Capital Appreciation Debt 43,255  
Amortization of Bond Premium 80,028  
Amortization of Loss on Debt Refundings (23,928)  
Increase in Compensated Absences Liability (36,924)  
Increase in Workers Compensation Liability (50,817)  
Decrease in Claims and Judgments Liability 4,062  
Increase in Net Pension Obligation (184,864)  
Increase in Net OPEB Obligation (162,056) (361,341)
     
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 decreased by this amount this year.   83,402
     
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.   (26,361)
     
Debt issue costs are recorded as expenditures in the governmental 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 8,429  
Amortization of Debt Issue Costs (8,114) 315
    $(409,882)

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