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PIEDMONT AREA MENTAL HEALTH, <br />DEVELOPMENTAL DISABILITIES AND SUBSTANCE ABUSE AUTHORITY <br />NOTES TO FINANCIAL STATEMENTS <br />JUNE 30, 2006 <br />NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />Proceeds of general long-term debt and acquisitions under capital leases are reported as <br />other financing sources. <br />The Authority considers all revenues available if they are collected within sixty (60) days <br />after year-end. <br />Intergovernmental revenues are not susceptible to accrual because generally they are not <br />measurable until received in cash. Expenditure-driven grants are recognized as revenue <br />when the qualifying expenditures have been incurred and all other grant requirements have <br />been satisfied. <br />C. Budgetary Data <br />The Authority's budgets are adopted as required by the North Carolina General Statutes. <br />An annual budget is adopted for the General Fund. All annual appropriations lapse at the <br />fiscal year-end. All budgets are prepared using the modified accrual basis of accounting. <br />Expenditures may not legally exceed appropriations at the functional level for all annually <br />budgeted funds and at the object level for the multi-year funds. Amendments are required <br />for any revisions that alter total expenditures of any fund or that change functional <br />appropriations by more than $5,000. The governing board must approve all amendments. <br />During the year, several amendments to the original budget were necessary as required by <br />state law primarily when funding changes are approved. The budget ordinance must be <br />adopted by July 1 of the fiscal year or the governing board must adopt an interim budget <br />that covers that time until the annual ordinance can be adopted. <br />D. Assets, Liabilities, and Fund Equity <br />1. Deposits and Investments <br />All deposits of the Authority are made in board-designated official depositories and are <br />secured as required by G.S. 159-31. The Authority may designate, as an official <br />depository, any bank or savings association whose principal office is located in North <br />Carolina. Also, the Authority may establish time deposit accounts such as NOW and <br />SuperNOW accounts, money market accounts, and certificates of deposit. <br />State law [G.S. 159-30(c)] authorizes the Authority to invest in obligations of the United <br />States or obligations fully guaranteed both as to principal and interest by the United States; <br />obligations of the State of North Carolina; bonds and notes of any North Carolina local <br />government or public authority; obligations of certain non-guaranteed federal agencies; <br />certain high quality issues of commercial paper and bankers' acceptances and the North <br />Carolina Capital Management Trust (NCCMT). <br />(~$) <br />G~`~ <br />