Comprehensive Annual Financial Report
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State of Alaska Comprehensive Annual Financial Report For the Fiscal Year July 1, 2002 – June 30, 2003 Prepared by: Department of Administration Division of Finance The FY 03 CAFR is expected to be available on or after January 2004 on our Internet web site at http://fin.admin.state.ak.us/dof/financial_reports/cafr_toc.jsp. This publication was released by the Department of Administration, Division of Finance to report on the state’s financial status. Produced and printed in Juneau, Alaska at a cost of $13.18 per copy. This publication is required by AS 37.05.210. Photo Credit “Brown Bear near Visitor Center” at Denali National Park. © Rex Melton, Alaska Division of Tourism. This page intentionally left blank. STATE OF ALASKA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2003 TABLE OF CONTENTS Page Statement INTRODUCTORY SECTION Letter of Transmittal i Exhibits viii Organizational Chart xiii Functions of State Departments xiv Alaska State Legislature xvi FINANCIAL SECTION 1 Independent Auditor’s Report 3 Management’s Discussion and Analysis 5 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Assets 17 1.01 Statement of Activities 18 1.02 Fund Financial Statements Governmental Funds 21 Balance Sheet 22 1.11 Reconciliation of the Balance Sheet to the Statement of Net Assets 23 1.12 Statement of Revenues, Expenditures, and Changes in Fund Balances 24 1.13 Reconciliation of the Changes in Fund Balances to the Statement of Activities 25 1.14 Proprietary Funds 27 Statement of Net Assets 28 1.21 Statement of Revenues, Expenses, and Changes in Fund Net Assets 29 1.22 Statement of Cash Flows 30 1.23 Fiduciary Funds 33 Statement of Fiduciary Net Assets 34 1.31 Statement of Changes in Fiduciary Net Assets 35 1.32 Component Units 37 Statement of Net Assets 38 1.41 Statement of Activities 40 1.42 Notes to the Financial Statements 43 Required Supplementary Information 93 Budgetary Comparison Schedule – General Fund 94 2.01 Note to Required Supplementary Information – Budgetary Reporting 95 STATE OF ALASKA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2003 TABLE OF CONTENTS Page Statement COMBINING FUND STATEMENTS 97 Governmental Funds Nonmajor Governmental Funds Combining Balance Sheet 98 3.01 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 100 3.02 General Fund 103 Combining Balance Sheet 108 3.11 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances 110 3.12 Permanent Funds 113 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and 114 3.23 Actual Nonmajor Special Revenue Funds 117 Combining Balance Sheet 120 3.31 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 122 3.32 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and 124 3.33 Actual Nonmajor Debt Service Funds 133 Combining Balance Sheet 134 3.41 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 135 3.42 Nonmajor Capital Projects Funds 137 Combining Balance Sheet 138 3.51 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 139 3.52 Proprietary Funds Nonmajor Enterprise Funds 141 Combining Statement of Net Assets 143 4.01 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets 144 4.02 Combining Statement of Cash Flows 145 4.03 Commercial Assistance Enterprise Funds Combining Statement of Net Assets 146 4.11 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets 148 4.12 Combining Statement of Cash Flows 150 4.13 Energy Assistance Enterprise Funds Combining Statement of Net Assets 152 4.21 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets 153 4.22 Combining Statement of Cash Flows 154 4.23 Other Agencies Enterprise Funds Combining Statement of Net Assets 156 4.31 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets 158 4.32 Combining Statement of Cash Flows 160 4.33 Internal Service Funds 163 Combining Statement of Net Assets 164 4.41 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets 166 4.42 Combining Statement of Cash Flows 168 4.43 STATE OF ALASKA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2003 TABLE OF CONTENTS Page Statement Fiduciary Funds 171 Pension and Other Employee Benefit Trust Funds Combining Statement of Fiduciary Net Assets 172 5.01 Combining Statement of Changes in Fiduciary Net Assets 174 5.02 Agency Funds Combining Statement of Fiduciary Assets and Liabilities 176 5.11 Combining Statement of Changes in Assets and Liabilities 178 5.12 Component Units Nonmajor Component Units 181 Combining Statement of Net Assets 182 6.01 Combining Statement of Activities 184 6.02 OTHER SUPPLEMENTARY INFORMATION 187 Component Units Nonmajor Component Units Without Separately Issued Financial Statements Balance Sheet 188 6.03 Statement of Revenues, Expenditures, and Changes in Fund Balances 189 6.04 Table STATISTICAL SECTION 191 Governmental Expenditures by Function 192 1 Available Fund Balance - General Fund 194 2 General Fund Tax Revenues by Source 195 3 General Fund Revenues by Source 196 4 State Aid and Shared Revenue to District Schools 198 5 Assessed and Full Value of Taxable Property 200 6 Schedule of Net General Bonded Debt / Property Value Ratios and Per Capita 202 7 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Fund 204 8 Expenditures and Unrestricted Revenues Schedule of Revenue Bond Coverage – International Airport Fund 205 9 Miscellaneous Statistical Data 206 10 INDEX OF FUNDS 213 This page intentionally left blank. Introductory Section This page intentionally left blank. December 15, 2003 The Honorable Frank H. Murkowski, Governor Members of the Legislature Citizens of the State of Alaska In accordance with Alaska Statute (AS) 37.05.210, it is our pleasure to present the Comprehensive Annual Financial Report (CAFR) of the State of Alaska for the fiscal year ending June 30, 2003. This report has been prepared by the Department of Administration, Division of Finance. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the state. To the best of our knowledge and belief, the enclosed data are accurate in all material respects and are reported in a manner designed to present fairly the financial position and results of operations of the state. Statistical and demographic information are included to enable the reader to gain an understanding of the state's financial activities. The report is presented in three sections: introductory, financial, and statistical. The introductory section includes this transmittal letter, exhibits of general fund financial information, an organization chart, a list of the executive branch functions by department, and a list of the state's legislators. The financial section includes: the independent auditor’s report on the basic financial statements; Management’s Discussion and Analysis (MD&A), which provides an introduction, overview, and analysis to the basic financial statements; the basic financial statements, which present the government-wide financial statements and fund financial statements for governmental funds, proprietary funds, fiduciary funds, and component units, together with the accompanying notes to the basic financial statements that outline pertinent accounting and reporting policies as well as explain significant financial matters that are essential to full disclosure of the state's financial operations and condition; required supplementary information other than MD&A, which presents a budgetary comparison schedule for the general fund; and the supplemental financial data section, which includes the combining and individual fund financial statements and schedules. The statistical section includes selected financial and demographic information, generally presented on a multi- year basis. THE REPORTING ENTITY AND ITS SERVICES The State of Alaska reporting entity reflected in this CAFR, which is described more fully in Note 1 to the basic financial statements, conforms with the requirements of Governmental Accounting Standards Board Statement No. 14, The Financial Reporting Entity. These criteria include financial accountability, fiscal dependency, and legal standing. The concept underlying the definition of the financial reporting entity is that elected officials are accountable to their constituents. The financial statements should allow users to distinguish between the primary government (the state) and its component units, with the emphasis being on the primary government. Consequently, this transmittal letter, the MD&A, and the financial statements focus on the state and its activities. Although information pertaining to the discretely presented component units is provided, their separately issued financial statements should be read to obtain a complete overview of their financial position. i The Honorable Frank H. Murkowski December 15, 2003 The state provides a range of services including education, health and human services, transportation, law enforcement, judicial, public safety, community and economic development, public improvements, and general administrative services. AUDITS The Division of Legislative Audit is the principal auditor of the state’s reporting entity. The audit of the CAFR was conducted in accordance with generally accepted auditing standards (GAAS), and the independent auditor’s report is the first item in the financial section of the CAFR and precedes the MD&A and basic financial statements. The goal of the independent audit is to provide reasonable assurance that the financial statements of the state for the fiscal year ended June 30, 2003, are free of material misstatement. The audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the CAFR, assessing the accounting principles used, and evaluating the overall financial statement presentation. In addition to the annual audit of the state’s CAFR, the state is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act of 1984 and the U.S.