Higher Education Funds:

Current Unrestricted Fund: Unrestricted revenue used or available for use in carrying out the current
operations of the State's colleges and universities is accounted for in the current unrestricted fund.

Current Restricted Fund: Restricted gifts, grants and other restricted resources are accounted for in the
current restricted fund.

In addition to the annual budget, the General Assembly adopts authorizations for the issuance of general
obligation bonds and the expenditures of the funds obtained thereby are accounted for in the capital projects
fund. Because capital projects fund authorizations are not part of the annual budget, capital projects fund
activities are not presented in the Combined Statement of Revenues, Expenditures and Encumbrances, Other
Sources and Uses of Financial Resources and Changes in Fund Balances -Budget and Actual - Budgetary
General, Special, Federal, Current Unrestricted and Current Restricted Funds.

All State budgetary expenditures for the general, special, federal, current unrestricted and current
restricted funds are made pursuant to the appropriations in the annual budget, as amended from time to time
by budget amendments. State governmental units may, with the Governor's approval, amend the
appropriations by major function within the general fund, provided they do not exceed their total general fund
appropriations as contained in the annual budget. Increases in general fund appropriations must be approved
by the General Assembly. For the fiscal year ended June 30, 1987, the General Assembly approved increases
in General Fund appropriations aggregating $19,000,000. Appropriations for programs funded in whole or in
part from the special, federal, current unrestricted or current restricted funds may permit expenditures in
excess of original special, federal, current unrestricted or current restricted fund appropriations to the extent
that revenues from the particular special, federal, current unrestricted or current restricted fund sources
exceed original budget estimates and such additional expenditures are approved by the Governor or, in case of
the University of Maryland, the Board of Public Works. Unexpended appropriations from the general fund
may be carried over to succeeding years to the extent encumbrances are approved by the Department of
Budget and Fiscal Planning; all other appropriations lapse as of June 30, 1987. Unexpended appropriations
from special, federal, current unrestricted and current restricted funds may be carried over to the extent of (a)
available resources, and (b) encumbrances approved by the Department of Budget and Fiscal Planning.

The amended budget adopted by the General Assembly for the general, special, federal, current
unrestricted and current restricted funds is presented in the Combined Statement of Revenues, Expenditures
and Encumbrances, Other Sources and Uses of Financial Resources and Changes in Fund Balances - Budget
and Actual - Budgetary General, Special, Federal, Current Unrestricted and Current Restricted Funds. The
State's budgetary fund structure and the basis of accounting used for budgetary purposes, which is the
modified accrual basis with certain exceptions, differs from that utilized to present financial statements in
conformity with generally accepted accounting principles. A summarization of the effect of the fund structure
differences and exceptions to the modified accrual basis of accounting (amounts expressed in thousands) as of
June 30, 1987, follows:

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