2005 CAFR Part 2 - Laserfiche WebLink

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COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2005 The fund financial statements'emphasis is on the major funds in either the governmental or business-type categories. Nonmajor funds(by category)are summarized into a single column. The governmental funds in the fund financial statements are presented on a current financial resource and modified accrual basis of accounting. This is the manner in which these funds are normally budgeted. This presentation is deemed most appropriate to(a)demonstrate legal and covenant compliance,(b)demonstrate the source and use of liquid resources,and(c) demonstrate how the County's actual experience conforms to the budget fiscal plan. Since the governmental fund statements are presented on a different measurement focus and basis of accounting than the government-wide statements' governmental column,a reconciliation is presented on the page following each statement,which briefly explains the adjustments necessary to transform the fund based financial statements into the governmental column of the government-wide presentation. The County's fiduciary funds are presented in the fund financial statements by type(private purpose and agency). Since by definition these assets are being held for the benefit of a third party(private parties,state government,etc.)and cannot by used to address activities or obligations of the government,these funds are not incorporated into the government-wide statements. Government-wide and fund financial statements—The government-wide financial statements(i.e.,the statement of net assets and the statement of changes in net assets)report information on all of the nonfiduciary activities of the primary government and its component unit. For the most part,the effect of interfund activity has been removed from these statements. Governmental activities,which normally are supported by taxes and intergovernmental revenues,are reported separately from business-type activities,which rely to a significant extent on fees and charges for support. Likewise,the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include(a)charges to customers or applicants who purchase,use,or directly benefit from goods,services,or privileges provided by a given function or segment and(b)grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds,proprietary funds,and fiduciary funds,even though the latter are excluded from the government-wide financial -46-