Basis of Presentation:
The accounts of the County are organized on the basis
of funds and account groups, each of which is considered a separate
accounting entity. The operations of each fund are accounted
for with a separate set of selfbalancing accounts that comprise
its assets, liabilities, fund equity, revenues, and expenditures
or expenses, as appropriate.
Government resources are allocated to and accounted
for in individual funds based upon the purposes for which they
are to be spent and the means by which spending activities are
controlled. The various funds are grouped into eight generic
fund types under three broad fund categories as follows:
Governmental Funds:
All governmental funds are accounted for using a
current financial resources measurement focus which means that
only current assets and current liabilities are generally included
on their balance sheets. Their reported fund balances (net current
assets) are considered a measure of available spendable resources.
Governmental fund operating statements present increases (revenues
and other financing sources) and decreases (expenditures and other
financing uses) in net current assets. Accordingly, they are
said to present a summary of sources and uses of available spendable
resources during a period.
General Fund:
The General Fund is the general operating fund of
the County which accounts for all financial resources that are
not accounted for in other funds.
Special Revenue Funds:
Special revenue funds account for taxes or other
earmarked revenues of the County which finance specified activities
as required by law or administrative action.
Debt Service Fund:
Debt service funds account for the accumulation of
resources for, and the payment of, general longterm debt
principal and interest.
Capital Projects Funds:
Capital projects funds account for financial resources
to be used for the acquisition, construction or improvement of
major capital facilities, equipment or capital improvements.
Proprietary Funds:
All proprietary funds are accounted for using a flow
of economic resources measurement focus, which means that all
assets and all liabilities (whether current or noncurrent) associated
with their activity are included on their balance sheets. Their
reported fund equity (net total assets) is segregated into contributed
capital and retained earnings components. Proprietary fund type
operating statements present increases (revenues) and decreases
(expenses) in net total assets. The government applies applicable
FASB pronouncements issued on or before November 30, 1989, in
accounting and reporting for its proprietary operations.
Enterprise Fund:
Enterprise funds account for operations that are
financed and operated in a manner similar to private business
enterprises where the intent of the governing body is that the
costs (expenses including depreciation) of providing goods or
services to the general public on a continuing basis be financed
or recovered primarily through user charges; or where the governing
body has decided that periodic determination of revenues earned,
expenses incurred, and/or net income is appropriate for capital
maintenance, public policy, management control, accountability,
or other purposes.
Internal Service Funds:
Internal service funds account for the financing
of goods or services provided to other departments of the County
on a costreimbursement basis.
Fiduciary Funds:
All fiduciary funds of the County are accounted for
similar to governmental funds using a current financial resources
measurement focus. Expendable trust funds are unique, however,
in that fixed assets and longterm liabilities are included
on their balance sheets.
Expendable Trust Funds:
Expendable trust funds account for the assets and
financial transactions of entities for which the County is responsible
in a trustee capacity, but whose assets are not available to the
County for general operations.
Agency Funds:
Agency funds account for assets held by the County
as an agent for individuals, private organizations, other governments
and/or other funds.
In addition to the funds, selfbalancing account
groups are established to account for the general fixed assets
and the general longterm obligations of the County. The
two account groups are not "funds". They are concerned
only with the measurement of financial position and not the results
of operations.
Discretely Presented Component Unit:
The component unit column in the combined financial statements includes the financial data of the County's component unit. It is reported in a separate column to emphasize that it is legally separate from the County. The component unit is accounted for using a current financial resources measurement focus.
Basis of Accounting:
Basis of accounting refers to when revenues and expenditures
or expenses are recognized in the accounts and reported in the
financial statements. Basis of accounting relates to the timing
of the measurements made, regardless of the measurement focus
applied.
Governmental and expendable trust funds utilize the
modified accrual basis of accounting. Under this method revenues
are recognized in the period in which they become measurable and
available as net current assets. Revenues that are susceptible
to accrual, that is, are measurable and available to finance the
County's current operations, primarily consist of state shared
revenues and charges for various routinely provided services.
Grant revenues are recognized to the extent of eligible expenditures
incurred. Expenditures are generally recognized when the related
fund liability is incurred, except that principal and interest
on general longterm debt are recognized when due.
Proprietary funds are accounted for using the accrual
basis of accounting whereby revenues are recognized in the period
in which they are earned and expenses are recognized when liabilities
are incurred.
Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Agency fund assets and liabilities are accounted for on the modified accrual basis.
Fixed Assets and LongTerm Liabilities:
The accounting and reporting treatment applied to
the fixed assets and longterm liabilities associated with
a fund are determined by its measurement focus as previously discussed.
Fixed Assets:
Fixed assets, excluding software, with an original
cost of $500 or more and a useful life of more than one year are
inventoried. Weapons are inventoried regardless of cost. All
fixed assets are valued at historical cost or estimated historical
cost if actual historical cost is not available. Donated fixed
assets are valued at their estimated fair market value on the
date donated.
Fixed assets used in governmental fund type operations
(general fixed assets) are accounted for in the General Fixed
Assets Account Group, rather than in governmental funds. All
County fixed assets (excluding grantfunded, proprietary
and expendable trust fund fixed assets) are purchased through
Capital Outlay or Capital Expenditures (capital projects funds).
Public domain general fixed assets (infrastructure) consisting
of certain improvements other than buildings such as roads, bridges
and rightsofway are not capitalized. No depreciation
is recorded on general fixed assets.
Fixed assets used by proprietary and expendable trust
funds are capitalized in the appropriate fund. Depreciation is
charged as an expense against proprietary fund operations and
accumulated depreciation is reported on their balance sheets.
Depreciation has been provided over the estimated useful lives
of buildings, improvements and equipment using the straightline
method.
Estimated useful lives range from 1040 years
for buildings and 510 years for improvements and equipment.
Landfill property is depreciated using the unitsofproduction
method, whereby depreciation is charged as property is consumed
for landfill purposes. Depreciation is not recorded in the expendable
trust fund.
Transfers of fixed assets between governmental funds
are recorded at historical cost, while transfers between governmental
and proprietary funds or among proprietary funds are recorded
at estimated fair market value at the date of transfer.
LongTerm Liabilities:
Because of their spending measurement focus, expenditure recognition for governmental fund types only ncludes amounts represented by current liabilities. Longterm liabilities expected to be financed from governmental funds are accounted for in the General LongTerm Obligations Account Group, not in the governmental funds. Longterm liabilities expected to be financed from proprietary and expendable trust funds are accounted for in the appropriate fund.
Budgets and Budgetary Accounting:
The County follows these procedures in establishing
the budgetary data reflected in the financial statements:
1. Prior to September 20, the Budget Office submits
to the County Commissioners a proposed operating budget for the
fiscal year commencing the following January 1 for all funds,
except Sheriff Special Services (an expendable trust fund) and
agency funds. The operating budget includes proposed expenditures/expenses
and the means of financing them.
2. Public hearings are conducted to obtain comments.
3. Prior to December 31, the budget is legally adopted
through passage of adoption and appropriation resolutions.
4. The level of control (level at which expenditures/expenses
may not exceed appropriations) is maintained at two major object
classifications: personnel and operating combined (which includes
intergovernmental and debt service payments, and operating transfers
out) and capital outlay. Control of each object classification
is maintained at the division/department level in the General
Fund, and at the fund level in all other funds. Formal budgetary
integration is employed as a management control device during
the year for all budgeted funds.
5. Department directors are authorized to transfer
budgeted amounts within each of the two major object classifications.
However, any revisions that alter the total expenditures/expenses
of any of the object classifications must be approved by the County
Commissioners.
6. All annual appropriations lapse at year end.
During 1997, one supplemental appropriation resolution
was adopted by the County Commissioners. Appropriations reported
in the accompanying financial statements are as amended.
The County follows the policy of adopting annual
budgets for all funds except fiduciary funds. Annual budgets
are adopted on a basis consistent with generally accepted accounting
principles (GAAP), except certain proprietary fund budgets. Budgets
for the SelfInsured Dental, Unemployment, Workers' Compensation,
Property and Casualty and Reserve internal service funds are adopted
on a GAAPbasis. All other proprietary fund budgets are
adopted on a nonGAAP modified accrual basis as follows:
(a) revenues and expenses are recorded as current year activity
only if receipt or payment of cash occurs within sixty days after
year end (subsequent receipts or disbursements are budgeted for
in the following fiscal year); (b) purchases of fixed assets and
principal payments of longterm liabilities are treated as
expenses; (c) depreciation expense is not budgeted; and (d) inventory
purchases are budgeted utilizing the purchase method.
Equity in Treasurer's Pool:
The Larimer County Treasurer maintains a cash and
investment pool that is available for use by all county funds
except the expendable trust fund and certain agency funds. Each
generic fund type's share of the pool is displayed on the Combined
Balance Sheet as "Equity in Treasurer's Pool" and is
stated at cost, with accrued interest receivable separately displayed.
Any bank accounts not maintained by the Treasurer are displayed
as "Restricted Assets" within the appropriate fund,
and are also stated at cost. Investments of Deferred Compensation
(an agency fund) are stated at market value. For purposes of
the statement of cash flows, the proprietary funds consider the
total Equity in Treasurer's Pool as cash because they have the
general characteristics of demand deposit accounts in that proprietary
funds may deposit additional cash at any time and also effectively
may withdraw at any time without prior notice or penalty.
Property Taxes:
Property taxes are levied in December and attach
as an enforceable lien on property as of January 1 of the following
year. Taxes are payable either in two installments due on February
28 and June 15 or in full on April 30. The County, through the
Larimer County Treasurer, bills and collects its own property
taxes as well as property taxes of all other taxing authorities
within the County. Taxes levied on December 16, 1997 are recorded
in governmental funds as taxes receivable and deferred revenue
as of December 31, 1997 since the amount is measurable but not
available until 1998. An allowance for uncollectible taxes is
not provided as the uncollectible amounts were determined to be
negligible based upon an analysis of historical trends.
Colorado State Statutes limit the annual increase in ad valorem tax yield over the previous year and prohibit any increase in the mill levy, except upon the favorable approval of the electorate. For the 1997 budget year, the County did not exceed the restrictions.
Receivables:
Special assessments and other long-term receivables, are recognized as revenue when they become measurable and available as a net current asset, while the longterm portion is reflected as deferred revenue. Both the principal and interest on special assessments are received in installments over a term of years that generally matches the estimated payments for the bond issue which financed the project. There was no delinquent special assessment principal or interest at December 31, 1997. There were no unbilled charges for County services at year end.
Inventories:
Inventories are valued at cost which is determined using the firstin, firstout method. Inventories in most governmental funds, consisting of expendable supplies held for consumption, are recorded on the purchase method whereby an expenditure is recorded at the time inventory items are purchased. Reported inventories of governmental funds are equally offset by a fund balance reserve which indicates that they do not constitute available spendable resources even though they are a component of net current assets. Inventories in Road and Bridge (a special revenue fund) and in proprietary funds are recorded on the consumption method whereby an expenditure or expense is recorded at the time the inventory items are used.
Compensated Absences:
County employees, except those employees in Community
Services (a special revenue fund), accumulate sick leave and vacation
benefits at rates of 8 hours per month and 8 to 16 hours per month,
respectively, depending on position and length of service. In
the event of retirement or termination, an employee is paid 100%
of accumulated vacation pay, and those with five or more years
of continuous service are paid for 25% of accumulated sick leave
up to a maximum payment of 100 days. Up to one and onehalf
times the annual vacation accrual rate may be carried over from
one year to the next. Compensatory time is granted (except for
official, professional and administrative positions) at the rate
of one and onehalf hours for each overtime hour worked,
not to be accumulated in excess of forty hours.
Community Services follows the State of Colorado
leave policies. Employees accumulate 10 hours of sick leave per
month and 10 to 14 hours of vacation time, depending on length
of service. Community Services employees can convert sick leave
to vacation leave on a twotoone ratio after more than
100 days of sick leave have been accumulated. Upon retirement
or termination, an employee is paid 100% of accumulated vacation
pay only. The maximum amount of vacation time that can be carried
over from one year to the next is 30 days for employees with up
to 10 years of continuous service, 36 days with 11 to 15 years,
and 42 days for employees with 16 or more years.
In governmental funds, employees typically earn more sick leave and vacation pay than are actually utilized during the current period. The County has adopted the policy that employees first use sick leave or vacation pay earned in the current period and then benefits carried over from prior periods. The unpaid sick leave, vacation pay and related benefits at the end of the period will generally not be paid with expendable and available resources and are reported in the General LongTerm Obligations Account Group. Proprietary funds accrue sick leave, vacation pay and related benefits in the period they are earned by the employees.
Encumbrances:
Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration. Encumbrances outstanding at year end are canceled and must be reappropriated in the subsequent year. Of the purchase orders canceled at year end, $1,054,865 were reopened and reappropriated in 1998. Of that amount, $546,503 related to incomplete road and bridge construction projects, $128,090 related to service contracts in progress, and $380,272 was for capital outlay and operating items which had not been received at December 31, 1997.
Interfund Transactions:
Transactions between funds that would be treated
as revenues, expenditures or expenses if they involved organizations
external to the County are accounted for as revenues, expenditures
or expenses in the funds involved. Transactions which constitute
reimbursements of a fund for expenditures or expenses initially
made from that fund which are properly applicable to another fund
are recorded as expenditures or expenses in the reimbursing fund
and as reductions of the expenditure or expense in the fund that
is reimbursed.
Nonrecurring or nonroutine transfers of equity between funds are referred to as residual equity transfers and are reported as additions to or deductions from the fund balance of governmental and expendable trust funds. Transfers of equity to proprietary funds are treated as contributed capital and such transfers from proprietary funds are reported as reductions of retained earnings or contributed capital as is appropriate in the circumstances. All other legally authorized transfers are treated as operating transfers and are included in the results of operations of governmental, proprietary and expendable trust funds.
General Purpose Financial Statements:
The General Purpose Financial Statements present
a combined overview of all generic fund types, account groups,
and component units of the County.
The total columns for the primary government are captioned "Memorandum Total" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or cash flows in conformity with generally accepted accounting principles. Such data are not comparable to a consolidation as interfund eliminations have not been made in the aggregation of the data.