Notes to the Financial Statements

June 30, 2015

Note 22 Restatement of Net Position, Fund Balance Classifications, and Restricted Net Position
Restatement of Net Position

During the fiscal year 2015, the State implemented the following new accounting standards issued by the Governmental Accounting Standards Board (GASB).

GASB Statement 68, Accounting and Financial Reporting for Pensions

GASB Statement 71, Pension Transition for Contributions Made Subsequent to the Measurement Date.

GASB Statements 68 and 71 - These Statements create standards for measuring and recognizing liabilities, assets, deferred outflows of resources, deferred inflows of resources, and expenditures for pensions provided to employees of the primary government and its component units. It requires the State to record the State'
s proportionate share of the net pension liability in the government-wide financial statements and the component unit financial statements.

Governmental activities beginning net deficit was $17.4 billion. Beginning net position of governmental activities was reduced by $25.6 billion on the Statement of Activities as a result of implementing these Statements. See note 11 for further information on pension reporting.

For fiscal year 2015, Component Unit beginning net position was $2.4 billion. As a result of implementing GASB Statements 68 and 71, the beginning net position for the Component Units was reduced $86.6 million on the Statement of Activities resulting in a restated beginning net position of $2.3 billion. This reduction is reported on the Combining Statement of Activities - Component Units as well. The following component units implemented GASB 68 and 71 which resulted in a decrease net position to Connecticut Lottery Corporation of $48.0 million, Connecticut Airport Authority of $54.8 million, Connecticut Innovations, Incorporated of $25.6 million, and Connecticut Green Bank of $14.9 million. The final revision made to Component Units was the addition of the Connecticut Student Loan Foundation as a component unit in fiscal year 2015. This resulted in an increase to Component Unit net position of $56.7 million. The Connecticut Housing Finance Authority (major Component Unit) did not implement GASB 68 and 71 in fiscal year 2015 because it has a fiscal year ending December 31.

During fiscal year 2015, the Municipal Employees' Retirement System (MERS) became aware that employer contributions receivable had not been reported in accordance to GAAP in prior fiscal years. Prior to fiscal year 2015, a receivable for transition liabilities owed to MERS by certain employers that joined the State Rate Pool was not reported.

In the Statement of Changes in Fiduciary Net Position Net Position Held in Trust for Pension Benefits was increased by $226.9 million to reflect the recognition of contributions receivable related to the pre-SLGRP transition liabilities.

Special Items
Special items are significant transactions within the control of management that are either unusual in nature or infrequent in occurrence.

Until 2010, the Connecticut Student Loan Foundation (CSLF) administered the Federal Family Education Loan Program (FFELP) as the State designated guarantee agency. CSLF'
s responsibilities as a guarantee agency included making claim payments to lenders whose loans it had insured and collecting defaulted loans from borrowers. CSLF transferred its guarantor operations to a third party. CSLF had the right to 50% of collection retention revenues in excess of operating costs on claims paid under the guarantees transferred by CSLF through December 2014.

The Budget Act of 2013 included a provision that reduced the compensation that guaranty agencies receive for rehabilitating a loan from the FFELP beginning July 1, 2014.

Funds which CSLF receive under this special item are restricted and may be used only for the educational purposes as specified and for the benefit of higher educational institutions located in the State and for supporting efforts in the State for the benefit of Connecticut students and their families for college access and completion. Any funds distributed to CSLF are to be distributed on an annual basis within 60 days of the end of each Federal fiscal year by the third party guarantor. Revenue from this special item as of June 30, 2015 was $1,259.

Fund Balance - Restricted and Assigned
As of June 30, 2015 restricted and assigned fund balances of nonmajor governmental funds were comprised as follows (amounts in thousands):

Restricted Net Position
As of June 30, 2015, the government-wide statement of net position reported $3,039 million of restricted net position, of which $278.0 million was restricted by enabling legislation.

Basic Section | Table of Contents | Index of Comptroller's Reports | Comptroller's Home Page