General Fund. $2,504,685

Special Funds 973,500

Non-Budgeted Funds 2,231,375

$5,709,560

The amount of $2,504,685 which represents advances from the General Fund is an unappropriated
portion of the General Fund Surplus Account. Although it it not in the State Treasury, it is considered
as cash receivable and due from the various State departments, agencies, etc.

While generally accepted accounting principles and standards of financial reporting for state govern-
mental units are not well developed nor uniformly applied at this time, the State's accounting records
are maintained and its financial statements are prepared generally in accordance with methods cus-
tomarily used by governmental units.

Generally, the State follows the modified accrual basis of accounting. The State records receipts
on a cash basis rather than an accrual basis, except for Federal revenues which are susceptible to accrual
(measurable and available to finance the current year's operations) which are recorded when earned.
Additionally, certain State taxes pertaining to one fiscal year but collected in the subsequent fiscal year
are recorded as revenues in the fiscal year to which they pertain. Expenditures are recorded when com-
mitments (purchase orders or contracts) are made. This is generally referred to as the encumbrance
method of recording expenditures, which is an acceptable refinement of the modified accrual basis of
accounting.

It is my opinion that the exhibits, supporting statements and schedules presented herein cover
all area of fiscal operations of our State Government which by Constitutional and Legislative mandate
have been entrusted to the office of the Comptroller of the State of Maryland. However, if any addi-
tional information relative to the contents of this report is desired, my co-workers and I will be most
pleased to furnish it to you.

Cordially yours,

LOUIS L. GOLDSTEIN,
Comptroller