STATE OF CONNECTICUT Comprehensive Annual Financial Report - Notes to the Financial Statements - Note 18

As of June 30, 1997, the beginning fund balances/net assets for the following funds were restated as follows:

Fund	Balance 6-30-96 Previously Reported	Fund Reclas- sification	Correction of Reported Assets/ Liabilities	Balance 6-30-96 As Restated

Special Revenue:
Lottery	$ 2,777	$ (2,777)	$ -	$ -
Environ. Programs	158,411	-	(6,113)	152,298
Other	28,125	2,777	14,154	45,056

Enterprise:
John Dempsey Hospital*	-	93,468	-	93,468

Internal Service:
Adm. Services	32,453	-	1,101	33,554

Expendable Trust:
Retired Teachers Health
Benefits Plan	-	14,988	3,692	18,680
Local Property
Tax Relief	194	(194)	-	-
Other	1,778	194	-	1,972

Pension Trust:
State Employees	5,249,497	-	(12,256)	5,237,241
State Teachers	7,466,352	(14,988)	-	7,451,364
Conn. Mun. Emp.	832,627	-	(1,945)	830,682
Higher Education:
Unrestricted	74,120	(515)	(2,350)	71,255
Restricted	27,094	515	(349)	27,260
Hospital	33,809	(33,809)	-	-
Plant	1,649,598	(128,585)	5,918	1,526,931

*Restatement is as of 9-30-95.

For regulatory purposes, the fiscal year of hospitals ends on September 30. Accordingly, the John Dempsey Hospital issues audited financial statements each September 30. Starting on June 30, 1997, the State elected to include the Hospital's financial statements (dated 9-30-96) in its combined financial statements. The Hospital's financial statements were prepared according to the guidance found in the American Institute of Certified Public Accountants Audit and Accounting Guide, Audits of Providers of Health Care Services. Because the accounting recommended in that guide can be best accommodated in the Enterprise funds, the Hospital's financial statements were included in that funds group. In prior years, the Hospital was reported in the Higher Education funds group.

As part of implementing GASB Statement No. 25 (see Note 1a), the State reclassified the Retired Teachers Health Benefits Plan as an Expendable Trust fund for financial reporting purposes. In prior years, the plan was reported in the State Teachers' Pension Trust fund. The plan provides health care benefits to retired teachers and is administered by the Teachers' Retirement Board.

During the year the State added a new component unit to its financial reporting entity, the Connecticut Lottery Corporation (see Note 1a). Previously, the financial activities of the State lottery were reported in the Lottery fund, a special revenue fund. Now this fund has been eliminated and its remaining financial activities are reported in other special revenue funds.