VLAWMO Annual Financial Report 2002

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VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION NOTES TO FINANCIAL STATEMENTS December 31, 2002 H. COMPENSATED ABSENCES Vested or accumulated vacation leave and other benefit amounts that are expected to be liquidated with expendable available financial resources are reported as an expenditure and a fund liability of the governmental fund that will pay it. No expenditure is reported for these amounts. At December 31, 2002, the amount of accumulated vacation leave was immaterial to the financial statements and is not reported. I. FIXED ASSETS General fixed assets are recorded as expenditures of the Governmental Funds at the time of purchase. Such assets are capitalized at historical cost or estimated historical cost in the General Fixed Asset Account Group. Public Domain ("infrastructure") general fixed assets consisting of roads, bridges, curbs, gutters, streets, sidewalks, and drainage systems are excluded from general fixed assets as these assets are immovable and of value only to the Organization. No depreciation has been provided on general fixed assets. Note 2 DEPOSITS AND INVESTMENTS DEPOSITS In accordance with Minnesota Statutes, the Organization maintains deposits at those depository institutions authorized by the Board of Commissioners. Minnesota Statutes require that all Organization deposits be protected by insurance, surety bond or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds (140% in the case of mortgage notes pledged). Authorized collateral includes the legal investments described below, as well as certain first mortgage notes, and certain other state or local government obligations. Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the Organization treasurer or in a financial institution other than that furnishing the collateral. In accordance with the provisions of GASB No. 31, the Organization reports investments at fair value in the financial statements. Also in accordance with the provisions of GASB No. 31, the Organization has reported all investment income, including changes in fair value of investments, as revenue to the operating statements. At year end the carrying amount of the Organization's deposits was $153,212 and the bank balance was $153,237. Minnesota Statutes require that all of the Organisation's deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds (140% in the case of mortgage notes pledged). At December 31, 2002, the Organisation's deposits were entirely insured by the FDIC. 16