STATE OF CONNECTICUT
NANCY WYMAN COMPTROLLER	OFFICE OF THE STATE COMPTROLLER 55 ELM STREET HARTFORD, CONNECTICUT 06106-1775	MARK OJAKIAN DEPUTY COMPTROLLER

December 31, 1998

To the Citizens of the State of Connecticut:

I am pleased to present this Comprehensive Annual Financial Report (CAFR) of the State of Connecticut for the fiscal year ended June 30, 1998.

This report was prepared in its entirety by this office and we take full responsibility for the accuracy of the data and the completeness and fairness of the presentation of the financial statements, supporting schedules, and statistical tables in it.

The CAFR is designed to be in conformance with generally accepted accounting principles (GAAP) for governmental units as promulgated by the Governmental Accounting Standards Board (GASB) as well as the reporting requirements prescribed by the Government Finance Officers Association and the American Institute of Certified Public Accountants. We believe that this report presents fairly the financial position of the state and the results of its operations as measured by the financial activity of its various funds. The report is consistent with full disclosure so that the reader may gain maximum understanding of the state's financial affairs. The report is presented in three sections:

The Introductory Section contains this transmittal letter, a list of the state's principal elected, appointed and administrative officials, an organizational chart of the state government, and a table of contents.

The Financial Section contains the Auditors of Public Accounts' report, the general purpose financial statements which include the notes to the financial statements, and the combining and individual fund and account group financial statements.

The Statistical Section contains comprehensive statistical data and selected financial and demographic information on a multi-year basis.

THE REPORTING ENTITY

Connecticut, a state of approximately 3.3 million people in an area of 5,009 square miles, has a developed infrastructure, technologically advanced industrial base and a strong insurance and financial services industry. The State of Connecticut ratified the Constitution of the United States on January 9, 1788. It has a legislative - executive - judicial form of government with a bicameral legislature (36 Senators, 151 Representatives). The Governor, Lieutenant Governor, Secretary of State, Treasurer, Comptroller, and Attorney General are independently elected for four-year terms. Senators and Representatives are elected for two-year terms.

The state provides a broad range of services including public safety, state highways and other transportation services, state parks, social services, higher education, health services, economic development, and regulatory responsibilities.

This report includes all the funds and account groups of the state as well as all of its component units. Component units are legally separate entities for which the primary government is financially accountable. Blended component units, although legally separate entities, are, in substance, part of the primary government's operations and are included as part of the primary government. Accordingly, the Connecticut Lottery Corporation is reported as an enterprise fund of the primary government. Discretely presented component units are reported in a separate column in the combined financial statements to emphasize that they are legally separate from the primary government. These would include the Connecticut Development Authority, Connecticut Housing Finance Authority, Connecticut Resources Recovery Authority, Connecticut Higher Education Supplemental Loan Authority, Connecticut Health and Educational Facilities Authority, and Connecticut Innovations, Incorporated.

STATE INITIATIVES

Tax Rebate and Other Tax Reductions

During 1998, the state implemented the first tax rebate program in Connecticut's history. As it became clear that the state was accumulating a significant general fund surplus for fiscal year 1998, State Comptroller Nancy Wyman proposed legislation to return the largest share of that surplus to state taxpayers. A majority of the surplus was generated by income tax receipts that exceeded budget expectations by $461.1 million. Accordingly, Comptroller Wyman's proposal returned most of the surplus windfall to residents who paid the state income tax. Comptroller Wyman's plan also set aside funds to reduce the state's growing debt burden.

A slightly altered version of the Comptroller's tax rebate plan was adopted by the state legislature (Public Act 98-110). The legislature set aside $115 million of the projected fiscal year 1998 general fund surplus for direct rebates to resident income tax payers. The maximum rebate amount was $75 for single filers, $120 for head of household filers, and $150 for joint filers. Qualified income tax filers received the lesser of their final income tax liability or the maximum rebate; however, a minimum of $50 was granted to all qualified taxpayers. The rebate checks were mailed to taxpayers in July 1998.

The rebate program reflects a continuing effort by state government to reduce the tax burden on Connecticut residents and businesses. During fiscal year 1998, new and phased-in tax reductions resulted in tax cuts of over $300 million. The corporate tax rate on net income is being phased down from a nation leading 11.5 percent to 7.5 percent by fiscal year 2000; the state income tax rate has been reduced from 4.5 percent to 3 percent at various income levels, and the property tax credit has been increased to $350; the inheritance tax will be eliminated by 2005; the sales tax on computer and data processing services, newspapers, repairs and replacement parts is being phased-out; and, the tax on gasoline has been reduced from 39 cents per gallon to 32 cents per gallon. By fiscal year 2002, these and other reductions will result in tax cuts of over $1 billion for Connecticut residents and businesses.

Year 2000 Data Processing Readiness

Connecticut state government, like the rest of the world, is attempting to accommodate and upgrade its automated data processing and technology systems for the new millennium. In general terms, the year 2000 problem arises from the present use of two digits to identify the year in a date field with the assumption that "19" will always be the first two digits of the year. Accordingly, dates used in routine processing may be misinterpreted in the year 2000. Because the state relies heavily on its computer systems and other equipment containing date-sensitive technology, failure to adapt these systems to recognize the year 2000 could interrupt critical functions of state government.

The state's Department of Information and Technology (DOIT) with outside consulting assistance is coordinating the effort to prepare state agency and related systems for the year 2000. DOIT has been assessing the state's 1500 computer systems and 40,000 personal computers to determine their year 2000 conversion requirements. It is estimated that the state cost for year 2000 conversion will total $104 million. To date $95 million of the identified funding requirement has been provided by the legislature. DOIT has categorized 770 systems as critical to state operations. As of October 31, 1998, 63 percent of the critical systems requiring remediation had been converted, and 27 percent of the testing cycles required to validate compliance in mission critical systems had been competed. A target date of March 31, 1999 has been established for conversion and testing of all mission critical systems.

State Comptroller Nancy Wyman began work in 1995 to make the major financial and employee benefit systems under her control year 2000 compliant. The Comptroller's systems process in excess of $15 billion in financial transactions annually.

By August of 1998 a majority of the Comptroller's systems had been converted. Comptroller Wyman was able to complete the conversion work for $5 million less than the original cost estimate.

Expanding Health Insurance for Children

In recent years, despite an improving state economy, Connecticut has continued to experience growth in its uninsured population. The Census Bureau estimates that in 1997, 396,000 Connecticut residents under age 65 lacked health insurance coverage, representing 13.8 percent of the state's non-elderly population. Of this total, 93,000 were uninsured children. In response to this problem, the State Comptroller convened a task force to recommend possible solutions. The Work Group for Health Care Access issued its final report in January 1997 recommending expansion of Medicaid to cover as many of Connecticut's uninsured children as possible and improving outreach efforts to the thousands of children who are eligible, but not yet enrolled in the program.

Later in 1997, the Federal Balanced Budget Act included new funding for health coverage under the State Children's Health Insurance Program (SCHIP). Under the SCHIP provision, states were given the option of expanding Medicaid coverage for children or creating new programs within certain federal guidelines under Title XXI of the Social Security Act. Connecticut used this opportunity to create a new health insurance program called the HUSKY Plan -- Healthcare for UninSured Kids and Youth -- which was passed during the October 1997 Special Legislative Session.

The HUSKY (Title XXI) Plan began serving children July 1, 1998 and provides subsidized coverage -- cost sharing on a sliding scale -- for uninsured children who live in families that earn between 186 percent and 300 percent of the Federal Poverty Level (FPL). Families above 300 percent of the FPL can enroll children into the HUSKY program, but must pay the full premium cost. The benefit package provided is similar to the one offered to Connecticut state employees and their dependents. In addition, all children in families at or below 185 percent of the FPL are eligible for Medicaid (Title XIX) coverage, which provides a somewhat more comprehensive benefit package. For outreach and marketing purposes, however, both programs are now called "HUSKY." Medicaid is called HUSKY Part A and the new Title XXI plan is called HUSKY Part B. Outreach and marketing efforts will be coordinated for both programs and feature a single point-of-entry system.

Between July 1 and December 15, 1998, a total of 2,595 children have been approved for HUSKY Part B coverage and 2,382 have been enrolled into health plans. An additional 6,223 children have been identified as candidates for HUSKY Part A coverage (Medicaid) and their applications have been forwarded to the Department of Social Services (DSS) for processing. Of these, a total of 2,953 children have been granted eligibility, approximately 1,000 have been denied coverage and the remaining cases are pending. Presently, efforts are underway to improve enrollment by providing outreach grants to community-based organizations throughout the state. In addition, an effort is being made to simplify the application for HUSKY, which is seen by many as a barrier to entering the program.

Welfare Reform

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 fundamentally altered the federal government's approach to welfare. Previously, Connecticut received a 50 percent federal reimbursement for its expenditures under the Aid to Families with Dependent Children (AFDC) program. In its place, the welfare reforms of 1996 established a block grant, Temporary Assistance for Needy Families (TANF), designed to give states greater flexibility in providing public assistance. In contrast to AFDC, TANF benefits are limited to 5 years.

Implemented in January 1996, Connecticut's current cash assistance program for families with children, Jobs First, has a 21 month benefit limit for most recipients, although under limited circumstances extensions can be granted for six month at a time. In order to facilitate transition into the work force, Jobs First recipients who find work are entitled to keep their cash assistance, called Temporary Family Assistance, and all earnings up to the Federal Poverty Level (currently $13,650 for a family of three) for the balance of their 21 months of eligibility. Additional assets can be retained under Jobs First and there are provisions for continued child care benefits and medical assistance (Medicaid) after termination of cash assistance.

Connecticut's current TANF block grant is $266.8 million. As a condition of the grant, the state, under TANF's Maintenance of Effort (MOE) requirement, must maintain a certain spending level on welfare related programs. The basic MOE is 80 percent of federal fiscal year 1994 spending ($244.6 million) for these programs; however, since Connecticut has met the federal work participation rate established under TANF, its current MOE is only 75 percent of historical spending levels, or $183.4 million.

During fiscal year 1998, the Temporary Family assistance caseload declined dramatically, from 52,875 to 40,990. Implementation of welfare reform has coincided with a continued strong economy and it is unclear what percentage of former welfare recipients, now entering the workforce often for the first time, will remain employed in the event of an economic downturn.

OPERATING RESULTS

The fiscal year 1997-98 saw the deterioration of the state's financial condition slowed to the point where an operating surplus was realized for the first time.

• While this is the first year an operating surplus has been recorded at $7 million, there have been nine years in a row of operating deficits highlighting the state's continual reliance on debt-financing.
• Long-term obligations increased $233 million, which will have to be financed by future generations.
• Debt service, excluding the debt service on the state's Economic Recovery Notes, was 10% of governmental operating expenditures, an increase from 9.1% in the prior year. In absolute terms, such expenditures increased 15%.
• Net debt per capita, also exclusive of the Economic Recovery Notes, rose to $2,820 more than double that of fiscal 1990.
• Government expenditures showed a slight increase from 10% to 10.1% of total personal income in the state when compared to the prior fiscal year, however, in absolute terms, expenditures increased 4.7%.

In the ten years since 1989, governmental expenditures have increased 58% while personal income increased only 47%.

* Includes general, special revenue and debt service funds. Operating expenditures also include higher education expenditures which are treated as an operating transfer out in the general fund.

Uncontrollable and fixed costs continued to consume a large share of the state's spending. Debt service, exclusive of the Economic Recovery Notes, increased to 10% of total governmental expenditures. Total debt service, including the Economic Recovery Notes, increased to 10.7% of governmental expenditures, still almost two times the ratio of fiscal year 1990. Medicaid spending rose slightly in fiscal year 1998 to $2 billion, however, it still remains at almost one-fifth of total General Fund spending. The net state share of Medicaid, after adjusting for the 50% share of federal reimbursements, was $308 for every man, woman, and child in Connecticut.

Deficit financing for operating purposes continued in fiscal year 1998. Operating deficits of $335 million were incurred in the Grant and Loan Programs and the Housing Programs special revenue funds in fiscal year 1998. This represents 23% of total special revenue funds spending. Debt financing for these and other special revenue programs was $417 million, which is approximately equal to our spending on legitimate capital needs for state facilities and infrastructure.

As a result, debt per capita, exclusive of the Economic Recovery Notes, increased to $2,820 - over twice what it was in fiscal year 1990. The remaining Economic Recovery Notes constitute an additional $24 of debt per capita.

General Fund

Fiscal year 1998 saw the state again end the year with a general fund operating surplus, the third year in a row, with revenues growing faster than expenditures.

Tax revenues increased 7.5% while intergovernmental revenues (grants, etc.) increased 2.4%. All expenditure categories increased except for corrections.

As shown above, except for taxes, the net increase of other sources of revenues is relatively minor. A further analysis of the tax revenues shows that with the exception of the personal income tax and the sales and use tax, tax revenues continue to be fairly stagnant, increasing marginally or even decreasing. Revenue from the personal income tax increased by $398 million, an increase of approximately 14% while the sales and use tax increased $161 million or an increase of 6.2%.

Except for Corrections, all functions of government showed increases in expenditures over the prior year. Medicaid expenditures continue to show slow growth but at growth rates much slower than those of the early 1990's.

Special Revenue Funds

Special revenue funds continue to be heavily debt-financed, suggesting that we are burdening future generations of taxpayers with the cost of current programs. Grant and loan programs and housing programs have shown operating deficits for the last five years. To the extent that loan programs result in receivables that can be counted on to mature in time to service the related debt, a case may be made that the economic benefits accrue to current and future taxpayers. Financing grants with debt, however, should be undertaken sparingly and in unusual circumstances.

The operating deficits primarily arose in the Grant and Loan Programs Fund and the Housing Programs Fund. The Grant and Loan Fund expended $316 million in fiscal year 1998 supported by revenues of only $11 million. Bond proceeds of $292 million and fund balance resources financed the balance. The Housing Programs Fund expended $35 million in fiscal year 1998. Like the Grant and Loan Programs Fund, the balance was financed by $51 million of bond proceeds and $6 million of revenues.

Other major special revenue funds include the Transportation Fund, which is generally self-supporting. Expenditures and transfers of $1,002 million were supported by revenues of $977 million in fiscal year 1998. The fund balance of the Transportation Fund was $113 million or 11% of expenditures and transfers.

The Employment Security Administration Fund expended $103 million on administration of the unemployment compensation program, supported by a like amount of federal financial assistance.

The Environmental Programs Fund also required debt financing. Expenditures and transfers of $99 million were supported by $41 million of revenues and transfers, along with bond proceeds of $60 million and additional fund balance resources.

Capital Projects Funds

Capital spending has averaged $800 million for the past five years with most of that spending directed toward infrastructure projects. Approximately 60% of infrastructure expenditures were financed by federal aid and the balance by state debt. Unlike the deficit financing of certain special revenue funds, the debt used to finance capital construction will provide a tangible benefit to the future generation of taxpayers who will use the asset for which they will pay the debt service. In addition, these infrastructure investments improve the economic climate of the state both immediately and for many years to come.

Expendable Trust Funds

The Employment Security Fund continues to have a growing fund balance with expenditures (unemployment compensation claims) the lowest in five years.

Pension Trust Funds

Net assets of the pension trust funds increased 15.6% for 1998. The State Employees' Retirement System (SERS), by far the largest pension fund for state employees (the Teachers' Retirement System primarily serves municipal employees), funded status increased to 58.1% as of fiscal year 1998 as compared to 51.4% as of fiscal year 1994. The Teachers' Retirement System (TRS) funded status increased from 66.6% to 69.1%, and the Judicial Retirement System (JRS) from 40.5% to 52.4% respectively.

Enterprise Funds

Two major changes to the enterprise funds combined financial statements occurred in fiscal year 1997. The Connecticut Lottery Corporation was created by the legislature as a public instrumentality and political subdivision of the state and was, accordingly, added to the enterprise fund category. Secondly, the John Dempsey Hospital Fund was reclassified out of the higher education funds group after it was determined that the fund was better suited to enterprise fund type accounting. The largest fund, the Connecticut Lottery Corporation, continues to provide substantial support to the General Fund with revenues of $806 million providing $267 million to the General Fund after prizes and expenses of $549 million.

Higher Education

Expenditures grew at a rate of 7.5% in fiscal year 1998, with State support keeping pace. Total revenues increased 11% over fiscal year 1997 with Federal and State Grants and Patient Services showing the biggest increases.

Debt Administration

State general obligation bonds are rated Aa3, AA, and AA by Moody's, Standard and Poor's, and Fitch IBCA, respectively, while transportation-related special tax obligation bonds are currently rated A1, AA-, and AA-, respectively.

The state issued approximately $.8 billion of bonds in fiscal year 1998, a decrease from the past two fiscal years. To the extent this bonding is for infrastructure or other assets benefiting future taxpayers, the debt is fully justifiable. The continued increase in the debt burden, however, particularly that portion that is used to finance current programs, bodes ill for the future. It means that future generations will pay for the sins of the past. And it means that the state will have reduced flexibility in future budgets, which will now be burdened by higher fixed costs for debt service.

Debt service as a percent of government operations, excluding debt service on the Economic Recovery Notes, has increased to 10.0% as compared to 7.2% from only five years ago.

Net state debt slowly increased .8% to $9.3 billion from $9.2 billion in fiscal year 1997. Net State debt has more than doubled since fiscal year 1990.

Debt per capita has more than doubled to $2,820 from $1,204 in fiscal year 1990. Bonded debt is the primary focus of most analyses but it is only half the amount of incurred long-term obligations that will need to be paid by future generations of taxpayers. Long-term obligations also include capital leases; compensated absences that were earned by employees in past periods but which will be paid by future generations; workers' compensation claims, which arose from past events but will be settled in future periods; and the unfunded actuarial accrued liability, which represents the value of pension benefits earned by employees but which is not funded currently. The total of these obligations increased $233 million in fiscal year 1998.

Internal Controls

Elected officials, agency commissioners, directors of public benefit corporations and agency managers are responsible for establishing internal control structures. Good internal controls are essential to achieving the proper conduct of government business with full accountability. This means that:

• resource use is consistent with laws, regulations and policies;
• resources are safeguarded against waste, loss and misuse; and
• reliable data are obtained, maintained and fairly disclosed in reports.

Good internal controls also facilitate the achievement of management objectives. In achieving these goals, good internal controls must strike a balance, providing reasonable, not absolute assurance. This recognizes that costs should not exceed benefits, nor should controls negatively impact operations.

Good internal control is comprised of the following elements:

• Control Environment - which reflects the overall attitude, awareness, and actions of elected officials or agency managers concerning the importance of control and its emphasis in state government (i.e. What is the tone at the top?)
• Accounting System - which consists of the methods and records established to identify, assemble, analyze, classify, record, and report transactions and to maintain accountability over state resources.
• Control Procedures - which includes those procedures that elected officials and management have established to provide reasonable assurance that specific objectives are being achieved.

This office has been making consistent efforts to improve the overall internal control in state government and simultaneously to give managers authority commensurate with their responsibilities.

Budgetary Controls

The key control mechanism of government finance is the budget. The Government Accounting Standards Board (GASB) has concluded that, "The budgetary process, including comparison of the approved budget with actual experience, is... a major aspect of accountability." The budget is more than just an aspect of accountability, however, it is also:

• An expression of public policy that identifies that activity or program to be carried out, the amounts that may be expended for these purposes, and the time period in which these are to occur.
• A financial plan, or expression of financial intent. For example, what are the expected sources of financing for these programs - who bears the burden of paying for them?
• A form of control usually having the force of law.

Budget control is maintained at the individual appropriation account level by agency as established in authorized bills. Control over the obligation is exercised by the allotment process. Funds, both for budgeted and non-budgeted funds, are allotted by the Governor through the Office of Policy and Management. The Governor is further allowed to modify the allotments up to 3% of the fund or 5% of the appropriation amount. Modifications beyond those limits, but not in excess of 5% of the total funds, require the approval of the Finance Advisory Committee, which is comprised of the Governor, the Lieutenant Governor, the Treasurer, the Comptroller, two senate members, not of the same party, and three house members, not more than two of the same political party.

Cash and Investments Management

The State Treasurer continually monitors cash flow to maximize the utilization of cash resources. During the year, temporary balances are invested in the State's short-term investment fund, a money market investment pool whose investments consist of certificates of deposit, bankers' acceptances, commercial paper, repurchase agreements, federal agency securities, and other investments with various ranges of maturities. The investment income and average yield rate for the fiscal year 1997-98 for this fund was approximately $174 million and 5.82%, respectively. By comparison, 90-day Treasury Bills and 90-day Certificates of Deposit earned 5.17% and 5.62%, respectively, during the same time period.

Bank balances at June 30, 1998, were $139 million of which about fifty-six percent was not insured or protected by collateral.

Risk Management

The state retains risk for certain property and liability claims, including workers' compensation. The State Insurance Purchasing Board serves as the focal point of risk management and insurance matters, maintaining a balance of commercially placed coverage and risk retention to provide optimal coverage at minimal cost.

ECONOMIC CONDITION AND OUTLOOK

Connecticut entered into a long period of recession during the winter of 1989. The recession officially ended in December 1992 after claiming 158,200 jobs. Connecticut's recovery began slowly with little employment growth between 1993 and 1995. Beginning in 1996, there were signs that the state's economy was gathering significant strength. Today, Connecticut has regained over 80 percent of the jobs lost to recession, and has posted strong income gains. During the course of the recovery, Connecticut's economy has become increasingly diversified with much of its employment growth coming from medium and small businesses in the service industries (business and personal services, health, legal, private educational, etc.) rather than from large manufacturing concerns and the insurance industry. Exports have also played a major role in this expansion.

While most of the state's economic news is good, there continue to be areas of concern: inflation adjusted median household income, although increasing, remains 25 percent below the peak level achieved in 1989; unemployment in the state's urban areas is almost double the rate for the state as a whole; child poverty is increasing at an alarming rate; and, Connecticut ranks as one of the top five states in income inequality. Failure to address these structural imbalances in the state economy could compromise future economic growth.

According to a report by the New England Economic Project, Connecticut, like the nation, will experience steady but slower economic growth in the coming years. The economic fundamentals in the state are expected to remain sound; however, risks associated with national and world economic events reduce the potential for above average growth.

Employment

• In 1997, seasonally adjusted non-farm payroll employment grew 2.5 percent in the state. This represents the strongest rate of growth in more than a decade. Through October 1998, employment growth slowed to 1.4 percent on an annualized basis.
• Between 1991 and 1995, Connecticut's labor force lost 140,000 workers, which was associated with a large negative net migration during the period. Over the past several years the state's labor force has stabilized, but has failed to grow.
• Connecticut's unemployment rated dipped to 3.8 percent in October 1998, which is well below the national level of 4.6 percent for the period.
• Over the past ten years, manufacturing's share of total state employment has slipped from 18.6 percent in 1988 to 14.1 percent in 1997. The employment share of the finance, insurance and real estate industry has declined from 11.6 percent to 9.5 percent during the period. These declines have been offset by employment share growth in the services sector, which accounted for 27.1 percent of all employment in 1988 and 34.4 percent of the total in 1997.
• The fastest growing occupations in Connecticut are as follows: computer engineer; systems analyst; sales agent (securities and financial); physical therapist; human services; and, home health aides.
• The fastest growing industries are as follows: securities services; amusement and recreational services; hotel and lodging; social services; business services; and, general building contractors.

Income

• Connecticut continues to lead the nation in per capita income with a 1997 level of $35,954. The state also experienced the strongest per capita income growth rate in the country at 6.3 percent for 1997.
• Connecticut's per capita income exceeds that of the nation by 42.1 percent, and is 18.1 percent above New England's per capita income level.
• Average earnings per job in Connecticut increased by 5.3 percent in 1997 to a total of $39,435. This is the best rate of earnings growth since 1989.
• Inflation adjusted median household income grew by 2.1 percent in 1997 to $43,985; however, this is 25 percent below the peak level achieved in 1989.
• Almost half of the state's total earnings come from the services and manufacturing sectors. Although the finance, insurance and real estate (FIRE) sector has declined in its share of total state employment, the share of total earnings that it contributes has increased from 11.5 percent in 1988 to 13.6 percent in 1997. This places the FIRE sector as the third largest contributor to total state earnings.

Other Indicators

• In 1997, Connecticut exports grew 14 percent from the prior year to $7.8 billion, which is about 6 percent of Gross State Product. This was the largest increase in exports since 1990. Export results for the first half of 1998 showed little growth, primarily due to the financial crisis in Asia.
• New auto registrations expanded 21.5 percent between 1996 and 1997. Solid growth has continued into the first half of 1998.
• New housing permits have been trending upward since 1996. In 1997, permits increased 5.6 percent over the prior year. Monthly increases have been strong for 1998. In October 1998, new housing permits increased 20.3 percent over the same month the previous year.

Certificate of Achievement

The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the State of Connecticut for its comprehensive annual financial report for the fiscal year ended June 30, 1997. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports.

In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. The State of Connecticut has received a Certificate of Achievement for the last nine consecutive years (fiscal years ended 1989-1997). We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to GFOA.

Independent Audit

The Auditors of Public Accounts, who report to the legislature and are independent of the executive Branch, have audited the accompanying financial statements in accordance with generally accepted auditing standards and their opinion has been included in this report.

ACKNOWLEDGMENTS

I wish to express my appreciation to the many individuals in all agencies whose cooperation and assistance has made this report possible. In addition, the efforts of the GAAP Reporting Unit and others in our Budget and Financial analysis Division deserve special acknowledgment.

Sincerely,

Nancy Wyman
State Comptroller

Back to Table of Contents
Back to Comptroller's Home Page