Investments:

Investments are stated at cost, adjusted for amortization of premiums and accretion of discounts, plus
accrued income. Short-term investments aggregating $449,420,000 (which approximates market value) at
June 30, 1984, consisting principally of U.S. Government Securities purchased with agreements to resell, are
reported as cash and short-term investments in governmental fund types.

Intergovernmental Expenditures:

Expenditures of general and special revenue fund revenues designated for payment to political
subdivisions and bond proceeds granted to political subdivisions and other public organizations are recorded as
intergovernmental expenditures. Direct grants and other payments to, or on behalf of, political subdivisions
are recorded as current expenditures.

Capital Outlays:

Principally all capital expenditures for the acquisition or construction of State general fixed assets are
reported as capital outlays in the capital projects fund.

Reserved and Designated General Fund Balances:

Loans receivable maturing after June 30,1985, in the amount of $2,220,000 are deemed to be not available
for current operations; accordingly, the amount has been reflected as a reservation of general fund balance.

A portion of the general fund balance, in the amount of $62,572,000 at June 30,1984, representing special
budgetary and nonbudgeted agency resources, was designated for agency activities and programs.

Expendable Trust Fund Balances:

Fund balances of expendable trust funds are restricted to the purpose of the fund.

C. Enterprise Funds and Nonexpendable and Pension Trust Funds:

Basis of Accounting:

The accounts of the enterprise funds, nonexpendable trust fund and pension trust fund are maintained
and reported using the accrual basis of accounting.

Investments:

Investments of enterprise funds and the pension trust fund are stated at cost, adjusted for amortization of
premiums and accretion of discounts, plus accrued income. Short-term investments aggregating
approximately $309,000,000 (which approximates market) at June 30, 1984, consisting principally of U.S.
Government Securities purchased with agreements to resell, are reported as cash and short-term investments
in the enterprise funds.

Short-term investments of the State Accident Fund are stated at cost, adjusted for amortization of
premiums and accretion of discounts, plus accrued income. Short-term investments aggregating $33,182,000
(which approximates market) at June 30, 1984, consisting of U.S. Treasury Bills and commercial paper, are
reported as cash and short-term investments. Other investments of the State Accident Fund, which are held
for trading purposes and are not intended to be held until maturity, are stated at their market value of
$129,064,000 (cost—$135,019,000). Realized gains and losses from the sale of other investments are credited
or charged to income. Changes in unrealized market appreciation or depreciation are credited or charged to
fund equity. Unrealized market appreciation or depreciation on other investments is reflected as a reservation
of fund equity.

Property, Plant and Equipment:

Significant property, plant and equipment of enterprise funds are stated at cost.

The cost of property, plant and equipment used in the administration of Economic Development activities
is charged to operations in the period acquired. Such amounts are not material.

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