Comprehensive Annual Financial Report 2016

Home

The County also maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Encumbrances outstanding at fiscal year end are included in the various fund balance categories based on whether the resources are restricted, committed or assigned and do not constitute expenditures or liabilities because they will be honored during the following year. As demonstrated by the statements and schedules included in the financial section of this report, the County continues to meet its responsibility for sound financial management. SignificantAccounting Policies The County has implemented Governmental Accounting Standards Board Statement No. 14, The Financial Reporting Entity (GASB Statement No. 14), Statement No. 39, Determining YVhether Certain Organizations Are Component Units (GASB Statement No. 39) and Statement No. 61, The Financial Reporting Entity: Ornnibzts an amendment of GASB Statements No. 14 and 34 (GASB Statement No. 61). All organizations, activities or functions that meet the criteria in GASB Statement No. 14, No. 39 and No. 61 for inclusion in the reporting entity are included in the County's basic financial statements. For further discussion on other significant accounting policies, refer to the notes to the basic financial statements. Financial Highlights Total revenues increased by $44.9 million from the prior year, with an increase in the area of capital grants and contributions accounting for $30.6 million of the increase. With a 10.8 percent increase in revenues and only a 2.9 percent increase in expenses, the County was able to experience an increase in net position of $37.9 million, which represented a 649% increase over the prior year's increase in net position prior to the impact of the prior year's cumulative effect of an accounting change related to the reporting of the County's net pension liability. The County's investment in capital assets increased by $142.7 million from the prior year, which represented a 13 percent increase. New and continued construction projects in the areas of highways and streets and culture and recreation accounted for the majority of the increase. Other Information Independent Audit The County Charter requires an annual audit by independent certified public accountants. N&K CPAs Inc. was selected in accordance with the County Charter and the procurement provisions of the Hawaii Revised Statutes (HRS) and Hawaii Administrative Rules (HAR) to perform the audit. Employee Union Contracts County employees are members of eight different bargaining units, all of which have contracts that expire on June 30, 2017. -5-