balance sheet governmental funds - north …...are included in governmental activities in the...

State of North Carolina June 30, 2018

BALANCE SHEET

GOVERNMENTAL FUNDS

June 30, 2018 Exhibit B-1(Dollars in Thousands)

Highway Other Total

General Highway Trust Governmental Governmental

Fund Fund Fund Funds Funds

AssetsCash and cash equivalents (Note 3)................................... 5,364,588 $ 132,327 $ 1,360,957 $ 1,074,584 $ 7,932,456 $

Investments (Note 3).......................................................... 6,631 — — 284,764 291,395

Securities lending collateral (Note 3)................................... 9,522 216 1,744 982 12,464

Receivables, net: (Note 4)Taxes receivable.............................................................. 2,011,662 134,953 58,953 5,801 2,211,369

Accounts receivable......................................................... 272,568 16,673 46 18,920 308,207

Intergovernmental receivable............................................ 914,505 76,569 6 2,551 993,631

Interest receivable............................................................ 10,508 227 1,891 1,730 14,356

Contributions receivable................................................... 84 — — — 84

Other receivables............................................................. — 5,080 — — 5,080 Due from other funds (Note 10)........................................... 29,757 20,718 343,237 7,539 401,251

Due from component units (Note 18)................................... 7 — — — 7

Inventories........................................................................... 68,159 88,103 — 17,713 173,975

Advances to other funds (Note 10)...................................... — — 27,763 — 27,763 Advances to component units.............................................. — 3,035 — — 3,035

Notes receivable, net (Note 4)............................................. 24,106 130 30 36,457 60,723

Securities held in trust......................................................... 40 1,601 — 47,505 49,146

Restricted/designated cash and cash equivalents (Note 3).. 255,289 — — 402,274 657,563

Restricted investments (Note 3).......................................... 1,991 14,094 — 334,954 351,039

Total Assets........................................................................ 8,969,417 493,726 1,794,627 2,235,774 13,493,544

Deferred Outflows of ResourcesForward funded state aid..................................................... 145,945 — — 37,287 183,232

Total Assets and Deferred Outflows.................................... 9,115,362 $ 493,726 $ 1,794,627 $ 2,273,061 $ 13,676,776 $

LiabilitiesAccounts payable and accrued liabilities:

Accounts payable............................................................. 201,897 $ 366,218 $ 105,084 $ 40,357 $ 713,556 $

Accrued payroll................................................................. 1,506 29,124 — 51 30,681

Intergovernmental payable............................................... 810,363 159,680 4,426 6,558 981,027

Claims payable................................................................. — — — 61,000 61,000

Medical claims payable....................................................... 967,581 — — — 967,581

Tax refunds payable............................................................ 997,142 7,315 2,988 — 1,007,445

Obligations under securities lending.................................... 9,522 216 1,744 982 12,464

Due to fiduciary funds (Note 10).......................................... 105,308 10,112 — — 115,420

Due to other funds (Note 10)............................................... 41,920 277,765 13,104 168 332,957

Due to component units (Note 18)....................................... 5,032 — — 10,379 15,411

Unearned revenue............................................................... 368,556 18,448 8,097 689 395,790

Deposits payable................................................................. 2,719 — — 5 2,724

Funds held for others........................................................... 16,194 13,018 — 47,591 76,803

Total Liabilities..................................................................... 3,527,740 881,896 135,443 167,780 4,712,859

Deferred Inflows of ResourcesUnavailable revenue............................................................ 198,251 1,863 — 6,236 206,350

Fund Balances (Note 11)Nonspendable..................................................................... 70,193 88,103 — 136,611 294,907

Restricted............................................................................ 136,629 17,200 — 996,147 1,149,976

Committed........................................................................... 2,329,651 — 1,659,184 962,838 4,951,673

Assigned............................................................................. 517,815 — — 3,449 521,264

Unassigned......................................................................... 2,335,083 (495,336) — — 1,839,747

Total Fund Balances............................................................ 5,389,371 (390,033) 1,659,184 2,099,045 8,757,567

Total Liabilities, Deferred Inflows and Fund Balances.......... 9,115,362 $ 493,726 $ 1,794,627 $ 2,273,061 $ 13,676,776 $

The accompanying Notes to the Financial Statements are an integral part of this statement.

52525252

State of North Carolina

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET POSITION

June 30, 2018 Exhibit B-1a(Dollars in Thousands)

Total fund balances - governmental funds (see Exhibit B-1) 8,757,567$

Amounts reported for governmental activities in the Statement of Net Position are different because:

– Capital assets used in governmental activities are not financial resources and,

therefore, are not reported in the funds (see Note 5). These consist of:

Cost of capital assets (excluding internal service funds)........................................................... 52,387,275$

Less: Accumulated depreciation (excluding internal service funds).......................................... (718,624)

Net capital assets............................................................................................................... 51,668,651

– Some assets, such as receivables, are not available soon enough to pay for current

period expenditures and thus, are offset by unavailable revenue in the governmental funds. 206,350

– Equity interest in component unit is not a financial resource and, therefore, is not

reported in the funds. 410,255

– Net OPEB asset (excluding internal service funds) resulting from contributions in excess

of the actuarially determined contribution are not financial resources and, therefore, are

not reported in the funds (see Note 14). 11,322

– Deferred losses on refundings are reported in the Statement of Net Position (to be

amortized as interest expense) but are not reported in the funds. 104,194

– Deferred outflows for pensions (excluding internal service funds) are reported in

the Statement of Net Position but are not reported in the funds (see Note 12). 1,063,894

– Deferred outflows for OPEB (excluding internal service funds) are reported in

the Statement of Net Position but are not reported in the funds (see Note 14). 546,765

– Long-term debt instruments, such as bonds and notes payable, are not due and

payable in the current period and, therefore, the outstanding balances are not reported

in the funds (see Note 8). Also, unamortized debt premiums are reported in the

Statement of Net Position but are not reported in the funds. These balances consist of:

General obligation bonds payable............................................................................................. (2,441,685)

Limited obligation bonds payable.............................................................................................. (1,783,975)

GARVEE bonds payable........................................................................................................... (516,820)

Unamortized debt premiums (to be amortized as interest expense)......................................... (468,508)

Notes payable............................................................................................................................ (50,623)

Capital leases payable (excluding internal service funds)......................................................... (15,988)

Net long-term debt............................................................................................................. (5,277,599)

– Other liabilities not due and payable in the current period and, therefore, not reported

in the funds (see Note 8 as applicable) consist of:

Accrued interest payable........................................................................................................... (30,875)

Compensated absences (excluding internal service funds)...................................................... (438,699)

Obligations for workers' compensation...................................................................................... (717,941)

Death benefit payable................................................................................................................ (40)

Pollution remediation payable.................................................................................................... (8,571)

Claims and judgments payable................................................................................................. (731,703)

Pension liability (excluding internal service funds).................................................................... (2,080,912)

Net OPEB liability (excluding internal service funds)................................................................. (6,229,491)

Total other liabilities........................................................................................................... (10,238,232)

– Deferred inflows for pensions (excluding internal service funds) are reported in

the Statement of Net Position but are not reported in the funds (see Note 12). (100,017)

– Deferred inflows for OPEB (excluding internal service funds) are reported in

the Statement of Net Position but are not reported in the funds (see Note 14). (2,208,649)

– Internal service funds are used by management to charge the costs of certain

activities to individual funds. The assets and liabilities of the internal service funds

are included in governmental activities in the Statement of Net Position (see Exhibit B-3). 204,116

Total net position - governmental activities (see Exhibit A-1) 45,148,617$


June 30, 2018

53535353

State of North Carolina June 30, 2018

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS

For the Fiscal Year Ended June 30, 2018 Exhibit B-2(Dollars in Thousands)

Highway Other Total

General Highway Trust Governmental Governmental

Fund Fund Fund Funds Funds

Revenues

Taxes:

Individual income tax................................................... 12,607,563 $ — $ — $ — $ 12,607,563 $

Corporate income tax.................................................. 749,488 — — — 749,488

Sales and use tax....................................................... 7,940,757 — — 8,411 7,949,168

Gasoline tax................................................................ — 1,413,804 573,949 25,846 2,013,599

Franchise tax.............................................................. 669,598 — — — 669,598

Highway use tax.......................................................... — — 798,314 — 798,314

Insurance tax.............................................................. 588,907 — — — 588,907

Beverage tax............................................................... 411,161 — — — 411,161

Tobacco products tax.................................................. 292,284 — — — 292,284

Other taxes................................................................. 206,598 — — 114,496 321,094

Federal funds................................................................. 15,626,073 1,271,290 — 90,158 16,987,521

Local funds.................................................................... 139,422 23,743 897 8,753 172,815

Investment earnings....................................................... 107,317 8,155 22,320 11,182 148,974

Interest earnings on loans.............................................. 332 — 315 328 975

Sales and services......................................................... 179,641 4,872 — 152,439 336,952

Rental and lease of property.......................................... 13,857 4,036 1,211 2,817 21,921

Fees, licenses, and fines............................................... 802,002 818,919 142,620 183,945 1,947,486

Tobacco settlement........................................................ 160,653 — — — 160,653

Contributions, gifts, and grants....................................... 44,088 16,475 96 50,080 110,739

Funds escheated........................................................... — — — 105,127 105,127

Miscellaneous................................................................ 143,325 8,919 2,214 2,838 157,296

Total revenues......................................................... 40,683,066 3,570,213 1,541,936 756,420 46,551,635

Expenditures

Current:

General government................................................... 1,148,205 — — 46,881 1,195,086

Primary and secondary education............................... 11,022,159 — — — 11,022,159

Higher education......................................................... 4,204,444 — — 185,911 4,390,355

Health and human services......................................... 19,054,530 — — 66,753 19,121,283

Economic development............................................... 500,251 — — 5,444 505,695

Environment and natural resources............................. 421,528 — — 147,300 568,828

Public safety, corrections, and regulation.................... 3,102,590 — — 279,609 3,382,199

Transportation............................................................. — 4,147,490 1,522,115 — 5,669,605

Agriculture................................................................... 184,669 — — 17,923 202,592

Capital outlay................................................................. — — — 129,798 129,798

Debt service:

Principal retirement..................................................... 662,396 258,460 45,332 60 966,248

Interest and fees......................................................... 207,921 25,196 6,837 59 240,013

Debt issuance costs.................................................... 1,425 561 — — 1,986

Total expenditures.................................................... 40,510,118 4,431,707 1,574,284 879,738 47,395,847

Excess revenues over (under) expenditures................... 172,948 (861,494) (32,348) (123,318) (844,212)

Other Financing Sources (Uses)

Refunding bonds issued................................................. 724,560 224,640 — — 949,200

Other debt issued........................................................... 642 32,303 — — 32,945

Premium on debt issued................................................ 152,357 28,508 — — 180,865

Payment to refunded bond escrow agent....................... (706,188) (68,007) — — (774,195)

Sale of capital assets..................................................... 8,428 12,248 1,040 151 21,867

Insurance recoveries...................................................... 23,299 10,763 — 780 34,842

Transfers in (Note 10).................................................... 814,256 30,717 — 202,411 1,047,384

Transfers out (Note 10).................................................. (202,601) (46,308) (79,929) (111,128) (439,966)

Total other financing sources (uses)........................ 814,753 224,864 (78,889) 92,214 1,052,942

Net change in fund balances.......................................... 987,701 (636,630) (111,237) (31,104) 208,730

Fund balances — July 1, as restated (Note 23)............. 4,401,670 246,597 1,770,421 2,130,149 8,548,837

Fund balances — June 30............................................. 5,389,371 $ (390,033)$ 1,659,184 $ 2,099,045 $ 8,757,567 $


54545454

State of North Carolina

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF ACTIVITIES

For the Fiscal Year Ended June 30, 2018 Exhibit B-2a

(Dollars in Thousands)

Net change in fund balances - total governmental funds (see Exhibit B-2) 208,730$

Amounts reported for governmental activities in the Statement of Activities are different because:

– Capital outlays are reported as expenditures in governmental funds. However, in the

Statement of Activities, the cost of capital assets is allocated over their estimateduseful lives as depreciation expense. In the current period, these amounts are:

Capital outlays (including construction-in-progress) ............................................................. 3,384,388$ Less: Depreciation expense (excluding internal service funds) ............................................ (929,460)

Net capital outlay adjustment ........................................................................................ 2,454,928

– Proceeds from the sale of capital assets increase financial resources in the funds,

whereas in the Statement of Activities only the gain or loss on the sale is reported. Thisadjustment reduces the proceeds by the book value of the capital assets sold. (69,413)

– Donations of capital assets do not appear in the governmental funds because they

are not financial resources, but increase net position in the Statement of Activities. 7,813

– Pension Contributions (excluding internal service funds) to defined benefit

pension plans in the current fiscal year are not included on the Statement of Activities. 418,831

– OPEB Contributions (excluding internal service funds) to defined benefit

OPEB plans in the current fiscal year are not included on the Statement of Activities. 215,246

– Benefit payments to the special separation allowance defined benefit pension plan

in the current fiscal year are not included on the Statement of Activities (see Note 12). 16,139

– Long-term debt proceeds provide current financial resources to governmental funds,

while the repayment of the related debt principal consumes those financial resources.These transactions, however, have no effect on net position. Also, governmental fundsreport the effect of premiums and similar items when debt is first issued, whereas theseamounts are deferred and amortized in the Statement of Activities. In the current period,these amounts consist of:

Debt issued or incurred:

Notes and capital leases issued ....................................................................................... (32,945) Refunding bonds issued ................................................................................................... (949,200) Premiums on debt issued ................................................................................................. (180,865)

Principal repayments:Bonds, notes, and similar debt ......................................................................................... 961,614 Capital leases (excluding internal service funds) .............................................................. 4,634 Payments to escrow agent for refundings ........................................................................ 774,195

Net debt adjustments .................................................................................................... 577,433

– Some revenues in the Statement of Activities do not provide current financial

resources and, therefore, are deferred inflows of resources in the funds.Also, revenues related to prior periods that became available during the current periodare reported in the funds but are eliminated in the Statement of Activities. This amountis the net adjustment. 19,271

– Change in equity interest of component unit resulting from changes in stockholder's

equity are not current financial resources, and therefore, are not recognized in the funds. 222,404

– Some expenses reported in the Statement of Activities do not require the use of

current financial resources and, therefore, are not recognized in the funds. Also,some payments related to prior periods are recognized in the funds but are eliminatedin the Statement of Activities. In the current period, the net adjustments consist of:

Accrued interest ................................................................................................................... 9,643 Compensated absences (excluding internal service funds) ................................................. (12,494) Workers' compensation ........................................................................................................ 28,551 Pension expense (excluding internal service funds) ............................................................. (539,771) OPEB expense (excluding internal service funds) ................................................................ (362,900) Pollution remediation ............................................................................................................ 39 Claims and judgments .......................................................................................................... 2,300 Amortization of deferred amounts ........................................................................................ 91,857

Net expense accruals ................................................................................................... (782,775)

– Internal service funds are used by management to charge the costs of certain

activities to individual funds. The net revenues of internal service funds areincluded with governmental activities in the Statement of Activities (see Exhibit B-4). (19,151)

Change in net position - governmental activities (see Exhibit A-2) 3,269,456$


June 30, 2018

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balance sheet governmental funds - north …...are included in governmental activities in the...

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