2023 Annual Comprehensive Report

The details of this $421,347,696 difference (including Premium of $23,669,650 and bond refunding charges of $4,239,360) are as follows:

Bonds and Notes Payable Limited Obligation Bonds

$

327,464,332 65,260,958 8,932,984 15,900,010 3,789,412 421,347,696

Lease and Other Financing Agreements Payable

Compensated Absences Payable

Accrued Interest Payable

Combined Adjustment

$

B. Explanation of certain differences between the governmental fund statement of revenues, expenditures, and change in fund balances and the government-wide statement of activities. The governmental fund statement of revenues, expenditures, and changes in fund balances include reconciliation between net changes in fund balances – total governmental funds and changes in net position of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that “Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense”. The details of this $9,487,226 difference are as follows:

Capital Outlay

$

28,653,493 1,839,852 (1,107,021) (19,899,098)

Contributed Capital

Disposal

Depreciation/Amortization Expense

Combined Adjustment

$

9,487,226

Another element of that reconciliation states that “the issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are unearned and amortized in the statement of activities. Also included are compensated absences activities.” The details of this $(58,024,427) difference are as follows:

Issuance of Debt Principal Expenditure

$

(85,906,366) 25,783,547 (383,463) 3,940,933 (1,459,078) (58,024,427)

Bond-Related Amortization

Interest Expenditures/Premium Amortization

Compensated Absences Expense

Combined Adjustment

$

III. Stewardship, Compliance and Accountability A. Budgetary Information

In accordance with the General Statutes of the State of North Carolina, the City prepares and adopts its budgets on the modified accrual basis. The General Statutes also require balanced budgets for all funds for which a budget is required. The City adopts annual budgets for all funds except Capital Projects Funds, Grant Project Funds and Trust Funds. Annual budgets must be adopted no later than July 1, the beginning of the Fiscal Year. The following Special Revenue Funds have legally adopted annual budgets: State Highway Allocation, Cemetery, Hotel/Motel Occupancy Tax, Special Tax Districts, Housing Partnership Revolving, Economic Development Fund, and Emergency Telephone System Fund. Capital and Grant Project budgets are adopted for the duration of the project which may encompass several years. Appropriations for funds that adopt annual budgets lapse at the end of the budget year. Capital and Grant Project budget appropriations do not lapse until the completion of the project.

40k