General Fund ...................................................... $2,598,382

Special Funds ...................................................... 1,254,841

Non-Budgeted Funds ............................................... 2,339,096

$6,192,319

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 customarily
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 on the cash basis
during the year and an encumbrance system is employed to account for expenditure commitments (pur-
chase orders and contracts) which remain outstanding at the end of the year.

It is my opinion that the exhibits, supporting statements and schedules presented herein cover all
areas 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 additional
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