The accompanying Summary of Major Accounting Principles, Notes to Financial Statements and Exhibit IV are an integral part of this financial statement.

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DISTRICT OF COLUMBIA

NOTES APPLICABLE TO GENERAL PURPOSE FINANCIAL STATEMENTS

SEPTEMBER 30, 1979

EXHIBIT IV
Page 1 of 3

GENERAL PURPOSE FINANCIAL STATEMENTS (GPFS)

The District's GPFS are the basic financial statements currently issued by state and local governmental units. The GPFS reflect the District's financial transactions on a "fund accounting" basis described below. The GPFS have been presented in accordance with the recent suggestions in the National Council on Governmental Accounting's publication, "Governmental Accounting and Financial Reporting Principles Statement Number 1." It was not practical to present statements of changes in cash and investments for individual funds because of the accounting changes described in Note 2.

FUND ACCOUNTING (APPLICABLE TO EXHIBITS I THROUGH III)

To monitor compliance with the limitations and restrictions placed on the use of its resources, the District maintains its accounts on the "fund accounting" basis. This is a system wherein transactions are segregated into selfbalancing sets of accounts to monitor the performance of specific activities or the achievement of certain objectives. Activities of the funds and account groups are described below.

Governmental Funds

O General Accounts for all revenues and expenses applicable to general operations which are not properly accounted for in another fund.

o Capital Projects Accounts for resources obtained to construct or acquire general fixed assets and major improvements other than those financed by the Enterprise Funds.

Accounts for the operations of the University of the District

of Columbia.

Proprietary Funds

о Enterprise Accounts for activities which are financed and operated in a manner similar to private business enterprises, where the intent is to recover a portion of the costs of providing services through fees and charges to users. The District has established separate Enterprise Funds for D. C. General Hospital, water and sewer operations, Stadium/ Armory Complex and the Convention Center.

Internal Service Accounts for the financing of goods and services pro-
vided by one agency to other agencies, or to other governmental units,
on a cost reimbursable basis. The two Internal Service funds are
General Services, which accounts for the costs of printing, reproduction,
maintenance and repair services provided to other District agencies, and
Other, for all other activities.

EXHIBIT IV
Page 2 of 3

Fiduciary and Trust Funds Account for assets held by the District as trustee or agent. Trust funds can be used, in some cases, to supplement general governmental operations, but with various restrictions on the use of the funds.

Retirement Trust Funds - Accounts for transactions of the three retirement plans. The assets of the three retirement trust funds are restricted to payment of retirement benefits (see Note 6).

District Unemployment Compensation Trust Fund - Accounts for transactions of the District Unemployment Compensation Trust Fund. Assets are restricted to payment of unemployment benefits (see Note 7).

Other Trusts

The District maintains separate records for approximately 200 trust and agency funds.

Account Groups

Contains the property and long-term liability accounts.

о General Fixed Assets - Accounts for property and equipment which is not accounted for in the Enterprise, Internal Service or University Funds. Property and equipment contained in this group is utilized in the general operations of the District, has a useful life greater than one year and had an initial individual cost greater than $500.

о General Long-Term Liability - Accounts for long-term borrowings, the proceds of which are used to finance the acquisition of property and equipment, and liabilities to the retirement trusts and workers' compensation, which will not be paid in the following year.

CONSOLIDATING ADJUSTMENTS

Certain accounting principles followed in the GPFS differ from principles followed in Consolidated Financial Statements. These differences are due principally to an emphasis in the GPFS on a flow of cash resources and an emphasis in the Consolidated Financial Statements on costs of services and revenues. The adjustments to reflect these differences are set forth below.

Balance Sheet Adjustments

(1)

(2)

(3)

These are

Receivables from and Payables to the Federal Government
reflected in the Consolidated Balance Sheet as a single net amount
($78 million) due the Federal government (see Note 9).

Intra-District Transactions These transactions among various District
agencies are eliminated in consolidation to avoid duplication.
Amount to be Provided by Future Taxpayers for Long-Term Obligations -
This item ($2,034 million) was recorded to make the General Long-Term
Liability Account Group self-balancing and, accordingly, is eliminated
in the Consolidated Financial Statements because it is not an asset.

EXHIBIT IV

Page 3 of 3

(4)

Trust Funds Assets in Excess of Liabilities Net assets of Trust Funds
($706 million) have been reclassified from Fund Balance to liabilities
to reflect the District's responsibility for Trust Funds under its
control. These assets are restricted as to use and are not available
to the District for its general use.

(5) Fund Balances The net effect of the above adjustments are as follows.

Elimination of amount to be provided by future
taxpayers on long-term debt (item 3 above)
Reclassification from Fund Balance to liabilities
of Trust Fund assets in excess of liabilities
(item 4 above)

$2,033,773

708,019

$2,741,792

Statement of Costs of Services and Revenue Adjustments

(6) The following consolidating adjustments result in a net increase of $51,510 million in the 1979 deficit.

The other entries represent reclassifications between items which have no net impact on the deficit.

63-088 0-6

DISTRICT OF COLUMBIA

STATEMENT OF UNCOMMITTED AUTHORIZATION

FOR APPROPRIATED BUDGET FOR THE YEAR ENDED SEPTEMBER 30, 1979
(Not covered by Auditors' Report)
(In $ Thousands)

(Note:

This statement presents the District's year-end uncommitted authorization which is the basis used for balancing the appropriated budget as required by Sec. 442(a)(1) of the Self-Government and Governmental Reorganization Act (P.L. 93-198). It is included in this Annual Report to assist the Councilmembers in understanding the financial statements on page 4. This statement is prepared on the budget basis of accounting and is not comparable to the other financial statements in this Annual Report.)