Comprehensive Annual Financial Report - Harford County Public ...

HARFORD COUNTY PUBLIC SCHOOLS
NOTES TO FINANCIAL STATEMENTS
June 30, 2012
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Fiduciary Funds
Scholarship and School Funds (Agency Fund) - Agency funds are used to account for assets held
by the Board in a trustee capacity. Scholarship funds account for monies that have been donated
for scholarships until awarded. The school funds account for student activities such as student
organizations, yearbooks and field trips. These funds are the direct responsibility of the
principals of the respective schools.
Retiree Health Plan Trust Fund – This fund was established to prefund other postemployment
benefits (OPEB) that the Board provides to retirees of the Board and their dependents.
Applicability of Accounting Pronouncements
The accounting policies of Harford County Public Schools conform to accounting principles
generally accepted in the United States of America. Accordingly, the Board applies all
applicable Governmental Accounting Standards Board (GASB) pronouncements.
Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets, are reported as
governmental activities in the government-wide financial statements. Capital assets are defined
by the Board as assets with an initial, individual cost of more than $5,000 and a useful life of at
least two years. Capital assets are recorded at historical cost, or estimated historical cost if actual
historical cost is not available. Donated capital assets are valued at their estimated fair value on
the date donated. The costs of normal maintenance and repairs that do not add to the value of the
asset or materially extend asset lives are not capitalized. Major outlays for capital assets and
improvements are capitalized as projects are constructed.
Property, plant and equipment are depreciated using the straight-line method over estimated
useful lives of 20-50 years for buildings, improvements and infrastructure, and 5-20 years for
furniture and equipment.
Assets which have been acquired with funds received through federal grants must be used in
accordance with the terms of the grant. Federal regulations require, in some cases, that the
Board must reimburse the federal government for any assets which the Board retains for its own
use after the termination of the grant unless otherwise provided by the grantor.
Budgets and Budgetary Accounting
Budgetary compliance is measured using the budgetary basis of accounting, the purpose of
which is to demonstrate compliance with the legal requirements of Harford County, the State of
Maryland, and special federal and state programs.
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