LOUIS L GOLDSTEIN

COMPTROLLER OF THE TREASURY
LOUIS L GOLDSTEIN TREASURY BUILDING

P.O. BOX 466

ANNAPOLIS, MARYLAND 21404-0466
301-974-3801

October 30, 1987
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,
1987, submitted herewith includes financial statements of the State of Maryland as well as information
required by Title 2, Section 102 of the State Finance and Procurement Article of the Annotated Code of
Maryland. 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.

The 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
criteria 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.

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