07 - Annual Comprehensive Financial Report

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CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2021 II. Reconciliation of Government -Wide and Fund Financial Statements (Continued) B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government -Wide Statement of Activities (Continued) Capital Outlay $ 2,206,683 Depreciation Expense (2,848,344) Net Adjustment to Increase Net Changes in Fund Balances - Total Governmental Funds to Arrive at Changes in Net Position Of Governmental Activities L=j§QAkU Another element of that reconciliation states that "the net effect of various miscellaneous transactions involving capital assets (i.e., sales and donations) is to increase net position." The details of this $93,924 difference are as follows: In the statement of activites, only the gain on the sale of assets is reported. However, in the governmental funds, the proceeds from the sale increase financial resources. Thus, the change in net position differs from the change in fund balance by the cost of the capital assets sold. $ (118,924) Donations of capital assets increase net position in the statement of activities, but do not appear in the governmental fund because they are not financial resources. 25,000 Total Governmental Funds to Arrive at Changes in Net Position of Governmental Activities $ (93,924) Another element of that reconciliation states that "the issuance of long-term debt (e.g. bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities." The details of this $360,792 difference are as follows: Issuance of Debt $ (2,880,000) Amortization of Premium 12,719 Principal Repayments 3,228,073 Net Adjustment to Increase Net Changes in Fund Balances - Total Governmental Funds to Arrive at Changes in Net Position 01) of Governmental Activities $ 360,M Ill. Stewardshi12, Compliance, and Accountability Violations of Legal or Contractual Provisions Note I.F.2, on the Excess of Expenditures Over Appropriations, describes budgetary violations that occurred for the year ended September 30, 2021.