2007 CAFR Part 3 - Laserfiche WebLink

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COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2007 Operating Revenues and Expenses Revenues and expenses are distinguished between operating and nonoperating items for the proprietary funds. Operating revenues generally result from providing services in connection with the proprietary funds' principal ongoing operations. The principal operating revenues of the proprietary funds are fees charged to residents for rent and rental subsidies received from the federal government. Operating expenses include the costs associated with providing housing for tenants,such as utilities, lease rent,and maintenance and repairs;administrative expenses;and depreciation on capital assets. All revenues and expenses not meeting these definitions are reported as nonoperating revenues and expenses. Use of Estimates The preparation of the basic financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,as well as disclosure of contingent assets and liabilities at the date of the financial statements,and the reported amounts of revenues,expenditures,and other financing sources and uses during the reporting period. Actual results could differ from those estimates. 2. STEWARDS111P,COMPLLA.NCE AND ACCOUNTABILITY Annual Budget The County follows these procedures in establishing its operating and capital budgets: • On or before March 1,the Mayor submits to the County Council proposed operating and capital projects budgets for the fiscal year commencing the following July 1. The operating budget includes proposed expenditures for the general fund and special revenue funds,and the means of financing them. A project-length budget is submitted to the County Council for the capital projects fund. • The Mayor submits to the County Council amendments to the proposed operating and capital budgets within ten working days after the close of the state legislature,but not later than May 5. • The County Council conducts public hearings on the proposed operating and capital budgets after March I but prior to the first reading on the budget bills,which must be after May 5. • On or before June 30,the County Council adopts the budgets. The legal level of budgetary control is the department level because the Mayor can transfer funds from any unencumbered appropriation to another within a department or agency without County -52-