Principally all full-time employees accrue annual leave based on the number of years employed up to a
maximum of 25 days per calendar year. Earned annual leave may be accumulated up to a maximum of 35 days
as of the end of each calendar year. As of June 30, 1984, accumulated earned but unused annual leave for
general government employees is accounted for in the general long-term debt account group. Liabilities for
accumulated earned but unused annual leave applicable to proprietary fund type and higher education and
university hospital fund are reported in the respective funds.

Interfund Receivables and Payables:

Interfund receivables and payables consist of the following at June 30, 1984 (amounts expressed in
thousands):

General fund:
Due from:
Special revenue fund ........................................................ $ 2,910

Agency fund - Social Security................................................ 3,847

$ 6,757

Due to:

Agency funds—

Social Security............................................................ $ 16,611

Local income taxes ........................................................ 146,826

$163,437

Special Revenue fund:
Due to:
General fund ............................................................... $ 2,910

Enterprise fund - Maryland Transportation Authority ......................... 1,005

$ 3,915

Total Memorandum Only:

The "Total Memorandum Only" column represents an aggregation of the individual combined financial
statements and does not represent consolidated financial information.

B. Governmental Fund Types, Expendable Trust and Agency Funds:

Basis of Accounting:

The accounts of the general, special revenue, debt service, capital projects, expendable trust and agency
funds are maintained and reported using the modified accrual basis of accounting. Under the modified accrual
basis of accounting, revenues are susceptible to accrual and recognized in the financial statements when they
are measurable and available to finance operations during the year or liquidate liabilities existing at the end of
the year. Material revenues susceptible to accrual include federal grants, income, sales and motor vehicle fuel
and excise taxes. Expenditures are recognized when obligations are incurred as a result of receipt of goods and
services. Modifications to the accrual basis of accounting include:

• Interest on long-term obligations reflected in the general long-term debt account group is recognized in
the debt service funds when it becomes payable.

• Inventories of materials and supplies are recorded as expenditures when purchased. Such inventories
are not material.

• Obligations for retirement costs and employees' vested annual leave and sick leave are recorded as
expenditures when paid.

• Encumbrances represented by executed and unperformed purchase orders and contracts, which are
approved by the Department of Budget and Fiscal Planning, are recorded as reservations of fund
balance as of the end of the fiscal year.

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