LOUIS L. GOLDSTEIN

COMPTROLLER OF THE TREASURY
LOUIS L. GOLDSTEIN TREASURY BUILDING

P.O. BOX 466

ANNAPOLIS, MARYLAND 21404-0466
269-3801

November 30, 1984

Honorable Members of the General

Assembly and the Governor
State of Maryland

The Comprehensive Annual Financial Report of the State of Maryland, for the fiscal year ended June 30,
1984, submitted herewith includes financial statements of the State of Maryland as well as information
required by Article 19, Section 9 of the annotated code. Responsibility for both the accuracy of the presented
data and the completeness and fairness of the presentation, including all disclosures, rests with the Office of
the Comptroller. I believe the data, as presented, is accurate in all material aspects; that it is presented in a
manner designed to fairly set forth the financial position and results of operations of the State as measured by
the financial activity of its various funds; and that all disclosures necessary to enable the reader to gain the
maximum understanding of the State s financial affairs have been included.

Financial and Accounting Systems

The financial statements contained in this report have been prepared in accordance with generally
accepted accounting principles and have been examined by Touche Ross & Co., whose report thereon is
included in this report.

Maryland maintains its accounts to conform to generally accepted accounting principles and also to
comply with the legally mandated budget. Financial control is generally exercised under the budgetary
system. The State recognizes the difficulties and complexities involved in maintaining dual systems, and it
has formed a task force to guide the conversion of budgetary practices into conformity with generally
accepted accounting practices.

During the most recent fiscal year, timing differences between budgetary practices and generally
accepted accounting practices were eliminated for the enterprise, trust and agency, and higher education and
university hospital funds. The remaining timing differences in the general fund must be evaluated by the
Executive and Legislative branches to determine the method of and timing for conversion to generally
accepted accounting principles. Differences in fund structure are continuing to be analyzed by the task force
to determine the appropriate approach to conversion.

The financial statements include the various departments, agencies and other organizational units
governed by the General Assembly and/or constitutional officers of the State of Maryland. The following
critieria was utilized to determine the entity for the State of Maryland: selection of governing authority,
appointment of management, constitutional officers ability to significantly influence operations and
accountability for fiscal operations and scope of public service.

General Governmental Functions

Revenues of the general governmental functions (excluding capital projects) totaled $5,643,154,000 for
the fiscal year ended June 30, 1984. This represents an increase of 12.6 percent over revenues for the fiscal
year 1983. Income tax, the largest source of revenue, produced 32.0 percent of general governmental
revenues compared to 31.1 percent last year. The revenues (amounts expressed in thousands) from various
sources and the changes from last year are shown in the following tabulation:

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