PROPRIETARY FUND TYPE
Enterprise Funds:

Transactions related to commercial types of activities operated by the State are accounted for in the enterprise
funds. The proprietary fund types differ from governmental fund types in that the focus is on the flow of economic
resources which, together with the maintenance of equity, is an important financial indicator. The enterprise funds
include:

1. Economic Development, which consists of direct loan and loan insurance programs of the Maryland
Departments of Housing and Community Development and Business and Economic Development.

2. Maryland State Lottery Agency, which operates the State Lottery.

3. State Use Industries, which utilizes inmate labor from State correctional institutions to manufacture goods,
wares and merchandise to be sold to State agencies, political subdivisions, and charitable, civic,
educational, fraternal or religious associations or institutions.

FIDUCIARY FUND TYPES

Transactions related to assets held by the State in a trustee or agency capacity are accounted for in fiduciary
fund types. Fiduciary fund types include the following:

1. The expendable trust fund, which reflects the transactions, assets, liabilities and fund equity of the
Unemployment Insurance Program. This fund is used to account for the unemployment taxes collected from
employers, federal revenue received and remittance of benefits to the unemployed, and is accounted for on
a flow of current financial resources measurement focus.

2. The State Retirement and Pension System of Maryland and the Mass Transit Administration Pension Plan
reflect the transactions, assets, liabilities and fund equities of the retirement and pension plans administered
by the State and the Mass Transit Administration, and are accounted for using the flow of economic
resources measurement focus.

3. The agency funds, which are custodial in nature and do not present the results of operations or have a
measurement focus. The State uses agency funds to account for the receipt and disbursement of various
taxes collected by the State for distribution to the Federal government and political subdivisions, patient
and prisoner accounts, amounts withheld from employees' payroll, the amounts the State invests for
political subdivisions on a pooled basis, and amounts withheld from employees and invested in the Deferred
Compensation Plan as directed by the employee.

ACCOUNT GROUPS

Account groups are used to establish accounting control and accountability for the State's general fixed assets
and the unmatured principal of its general long-term debt and other long-term obligations of governmental fund
types. General fixed assets do not represent financial resources available for appropriation and expenditure, nor
does the unmatured principal of general long-term obligations require current appropriation and expenditure of
governmental fund financial resources.

General Fixed Assets Account Group:

General fixed assets acquired, leased under capital lease agreements or constructed for use by the State in the
conduct of its activities, other than activities accounted for in enterprise funds and the discretely presented
component units (proprietary funds and higher education), are reflected in the general fixed assets account group
when acquired. These fixed assets are stated at cost or estimated historical cost. Donated fixed assets are recorded
at their fair value at the time donated. Depreciation is not provided for general fixed assets, and interest incurred
during construction is not capitalized. Infrastructure assets, consisting principally of highways, roads and bridges,
are not recorded in the general fixed assets account group.

General Long-Term Debt Account Group:

General obligation, transportation and Maryland Transportation Authority bonds payable, capital lease
obligations, accrued self-insurance costs and accrued annual leave related to general governmental activities are
reflected in the general long-term debt account group.

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