June 30,1999
Note 17 Restatement of Fund Balances/Retained Earnings and Change in Accounting Principle/Estimate
As of June 30, 1999, the beginning fund balances for the following funds were restated as follows (amounts in thousands):
| Fund |
Balance 6/30/98 Previously Reported |
Fund Reclas- sification |
Correction of Reported Assets/ Liabilities |
Balance 6/30/98 as Restated |
|---|---|---|---|---|
| Enterprise: | ||||
| Rental Housing | $ 48,954 | $ - | $ (3,856) | $ 45,098 |
| Internal Service: | ||||
| Information Technology | - | 14,841 | - | 14,841 |
| Administrative Services | 39,777 | (14,841) | (3,200) | 21,736 |
| Nonexpendable Trust: | ||||
| Clean Water | 352,489 | - | (6,173) | 346,316 |
| Higher Education: | ||||
| Plant | 1,765,728 | - | 712 | 1,766,440 |
The State sponsors an IRC Section 457 deferred compensation plan ("plan"), that in prior years was reported as an agency fund in the State's financial statements. This reporting practice was changed with the passage of GASB Statement No. 32, " Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans," which was adopted by the State in 1999. According to this Statement, the plan would be reported as an expendable trust fund in the State's financial statements if the assets of the plan were held by the State in a trustee capacity. Because the plan did not meet the criteria for trust fund reporting found in Statement No. 32, the State will no longer report the assets of the plan in its financial statements. There was no effect on the State's fund balances at year-end as a result of the change in reporting practice for the plan.
For the year ended June 30, 1999, the Connecticut State University System (CSU) changed its estimate for accounting for accrued compensated absences. In prior years, CSU estimated the liability for sick leave based on the assumption that approximately 95 percent of employees will ultimately receive the sick leave benefit upon retirement. In 1999, CSU refined its estimate based on an analysis of actual historical experience, which indicated that approximately 40 percent of employees actually receive the sick leave benefit. The cumulative effect of this change in estimate as of July 1, 1998, (9.1 million) is reflected as an increase in fund balance in the combined statements of changes in fund balances and current funds revenues, expenditures, and other changes in fiscal 1999.
As of June 30, 1999, the 1998 financial statements of the Clean Water fund were restated to correct overstatements of interest receivable on loans (2.1 million) and of transfers into the fund (3.1 million) and to recognize the arbitrage liability (1.0 million).
During 1999 the State reclassified the Information and Technology fund as a separate internal service fund. In prior years, this fund was included as part of the Administrative Service fund.
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