AG 2007 05 21 - Laserfiche WebLink

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PIEDMONT AREA MENTAL HEALTH, DEVELOPMENTAL DISABILITIES AND SUBSTANCE ABUSE AUTHORITY NOTES TO FINANCIAL STATEMENTS JUNE 30, 2006 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of Piedmont Area Mental Health, Developmental Disabilities and Substance Abuse Authority (the "Authority") conform to generally accepted accounting principles in the United States of America as applicable to governments. The following is a summary of the more significant accounting policies: A. Reporting Entity The Authority is an area authority designated by and functioning under the control of the North Carolina Department of Health and Human Services to provide mental health, developmental disabilities and substance abuse services in Cabarrus, Stanly, Union, Rowan, and Davidson Counties. The services, as a Local Management Entity, include reviewing and evaluating the area needs and programs in mental health, mental impairment, mental retardation, alcoholism, drug dependency and related fields, and developing jointly with the North Carolina Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, an annual plan for the effective development, use and control of state and local facilities and resources in a comprehensive program of mental health service for the residents of the area. The Authority is governed by a 20-member board of directors. The Authority is an area authority empowered by Chapter 122C of the North Carolina General Statutes with the responsibility to oversee and control all activities related to mental health, developmental disabilities, and substance abuse services in its target area. As required by generally accepted accounting principles, these financial statements present all accounts of the Authority. B. Basis of Presentation, Basis of Accounting Basis of Presentation, Measurement Focus -Basis of Accountins~ Government-wide Statements. The statement of net assets and the statement of activities display information about the primary government (the Authority). These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the Authority. Governmental activities generally are financed through patient charges, third- party reimbursements, intergovernmental revenues, and other non-exchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties. The Authority does not have any business-type activities. The statement of activities presents a comparison between direct expenses and program revenues for each function of the Authority's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expense allocations that have been made in the funds have been reversed for the statement of activities. Program revenues include: a) fees and charges paid by the recipients of goods or services offered by the programs, and b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues are presented as general revenues. (16) G -'~