State Use Industries

Maryland Higher Education Loan Corporation

Maryland Deposit Insurance Fund Corporation

Maryland Stadium Authority

Unemployment Insurance Program

Maryland State Retirement and Pension Systems

Mass Transit Administration Pension Plan

University of Maryland System

Baltimore City Community College

St. Mary's College of Maryland

Morgan State University

The Maryland School for the Blind, Blind Industries and Services of Maryland, Maryland Economic
Development Corporation, Maryland Health and Higher Education Facilities Authority, Maryland Automobile
Insurance Fund, Injured Workers' Insurance Fund (formerly the Maryland State Accident Fund), Maryland
National Capital Park and Planning Commission, State Employees Credit Union, and the Maryland Credit Union
Insurance Corporation have not met the criteria for inclusion in the reporting entity, and accordingly, are
excluded from this report.

ECONOMIC CONDITION AND OUTLOOK

Maryland's economy is expected to continue to grow more slowly than the national economy during the next
18 months. Maryland's nonfarm payroll employment, which declined during the past two years, appears to have
stabilized and is expected to grow by only 0.2 percent in calendar year 1993 and by 1.5 percent in 1994. State
personal income is expected to grow slowly, rising by only 3.0 percent in calendar year 1992, 4.0 percent in 1993
and 5.0 percent in 1994. The calendar year 1992 growth reflects an 11.8 percent growth in transfer payments, but
only a 2.7 percent growth in wages and salaries.

MAJOR INITIATIVES

Providing the many necessary services to the people of Maryland, while at the same time maintaining a
fiscally sound position, was a major challenge in fiscal year 1992 that continues into 1993. Even though budget
shortfalls and cost containment programs overshadowed much of the policy making, some significant
accomplishments were made during the year.

The new home for Baltimore Orioles Major League baseball was completed in time for opening day of the 1992
season. Oriole Park at Camden Yards not only met with rave reviews from the fans and players, but is becoming a
Maryland tourist attraction. Serving the Stadium and other parts of Baltimore City is the first phase of a 27-mile
light rail express system that also was completed during 1992.

The State made some reforms to the welfare system during the year that will hold certain recipients more
accountable. Changes to the medicaid program now provides for managed care for certain participants. The State
is under way with the development and implementation of a comprehensive Financial Management Information
System that will replace duplicative and outdated systems throughout the State.

FINANCIAL INFORMATION

The State has issued guidelines to its agencies for establishing an effective system of internal control. Internal
control is the overall plan of organization and all the coordinate methods used to safeguard assets; ensure the
reliability of the accounting data; promote efficient operations and ensure compliance with established
governmental policies, laws, regulations and contracts. The internal control structure is designed to provide
reasonable, but not absolute, assurance that these objectives are met.

As a recipient of federal assistance, the State is responsible for ensuring compliance with laws and regulations
related to such assistance. This is accomplished through the internal control guidelines. Additionally, the State,
excluding higher education institutions, is required to undergo an annual single audit in conformity with the
provisions of the Single Audit Act of 1984 and U. S. Office of Management and Budget Circular A-128. The State's
higher education institutions' single audit is performed under Circular A-133. Detailed information related to
these single audits is included in separate reports.

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