Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2002 BASIC FINANCIAL STATEMENTS Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities

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, 2002
(Expressed in Thousands)
Net Change in Fund Balances - Total Governmental Funds $ (1,143,293)
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 (1,621,001)
Refunding Bonds Issued (1,121,670)
Premium on Bonds Issued (131,016) (2,873,687)
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 824,825
Payments to Refunded Bond Escrow Agent 1,204,925
Capital Lease Payments 5,407 2,035,157
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 are:
Capital Outlays 907,266
Depreciation Expense (736,882) 170,384
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 Net Assets. (6,989)
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 purchases exceeded consumption of
inventories. 7,351
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:
Decrease in Accrued Interest 2,277
Increase in Interest Accreted on Capital Appreciation Debt (10,919)
Amortization of Bond Premium 7,125
Amortization of Loss on Debt Refundings (5,529)
Increase in Compensated Absences Liability (26,975)
Decrease in Workers Compensation Liability 81,234
Decrease in Claims and Judgments Liability 5,385
Increase in Net Pension Obligation (105,902) (53,304)
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. (21,767)
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 certain internal service funds is reported with the governmental activities. (8,115)
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 15,011
Amortization of Debt Issue Costs (660) 14,351
Change in Net Assets of Governmental Activities $ (1,879,912)
The accompanying notes are an integral part of the financial statements.