|STATE OF CONNECTICUT|
|OFFICE OF THE STATE COMPTROLLER|
55 ELM STREET
This statutory based report was prepared in accordance with the accounting standards that were applied in the budget act and the related legislation. Commencing in Fiscal Year 2014, appropriations were made to budgeted state agencies and to the non-functional spending group in order to account for expense accruals. The new appropriation accruals were posted exclusively to the budgeted funds, which include the General Fund, Transportation Fund and the other special revenue funds that received legal appropriations within Public Act 13-184 as adjusted by Public Act 13-247. The accruals relate to payments that were made after the close of the fiscal year on June 30th but are directly related to obligations incurred within that fiscal year. The expense accruals are reported using the Generally Accepted Accounting Principles (GAAP) approach that is employed in preparing the state's Comprehensive Annual Financial Report (CAFR).
Specifically, goods and services that are received during the fiscal year and are paid through the Core-CT system within 45 days of the close of the fiscal year are charged to the closed fiscal year. This same approach is used for payroll expenses and the associated fringe benefit costs to ensure that the cumulative days worked in a closed fiscal year are charged to the closed year. Certain agencies process special payments outside of the statewide Core-CT system. The Department of Social Services processes Medicaid payments through an agency based system and reports accrued amounts to the Comptroller's Office manually. The Department's Medicaid accruals have historically had a material impact on total state expenses. Therefore, although the payments are not processed through Core-CT, the accruals are included in the budget and are part of this report. Other payments that are made outside the Core-CT system in the budgeted funds do not have a significant impact on the overall fiscal results and are therefore not included in the financial statements.
Revenues within this report are recognized when received except in the General and Transportation Fund. Certain accrued taxes and Indian Gaming Payments within these funds are recognized within a statutory accrual period that is accepted by the Comptroller.
As used in this report, the GAAP budgetary basis refers to the reporting method described above. The policy objective of GAAP budgeting was to eliminate or to mitigate the growth in the GAAP deficit reported in the state's CAFR, and in future years to eliminate the total deficit. The GAAP deficit reported in the CAFR is the total fund balance that has not been restricted, committed, or otherwise assigned to a specific purpose. That balance is negative. The growth in the GAAP deficit overtime is largely attributable to the growth in spending accruals within the budgeted funds. Fiscal Year 2014 is the first year that the state has appropriated dollars for the growth in spending accruals to address the GAAP deficit.