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 (CONTINUED) Restricted -Medicaid Risk Reserve Restricted net assets are those reported because of a constraint placed on its use by the contractual agreement between the Authority and the North Carolina Department of Health and Human Services Division of Medical Assistance. The agreement requires that the Authority deposit wo percent of the monthly capitation payments until a maximum total of fifteen percent of the annualized total contract is achieved. Unreserved Designated for subsequent year's expenditures -portion of total fund balance available for appropriation that has been designated for the adopted 2006-2007 budget ordinance. Unreserved and designated -other -portion of unreserved fund balance designated by management for a specified purpose. Unreserved and designated specifically for expanded Medicaid services -the Authority has made application with the State of North Carolina and the Center for Medicare and Medicaid Services to add 8-3 supplemental services to the Authority's service plan. Undesignated -portion of total fund balance available for appropriation that is uncommitted at year-end. NOTE 2 DETAIL NOTES ON ALL FUNDS A. Assets 1. Deposits All of the Authority's deposits are either insured or collateralized by using one of two methods. Under the Dedicated Method, all deposits exceeding the federal depository insurance coverage level are collateralized with securities held by the Authority in its name. Under the Pooling Method, which is a collateral pool, ail uninsured deposits are collateralized with securities held by the State Treasurer's agent in the name of the State Treasurer. Since the State Treasurer is acting in a fiduciary capacity for the Authority, these deposits are considered to be held by their agents in the entity's name. The amount of the pledged collateral is based on an approved averaging method for non-interest bearing depositsFand the actual current balance for interest-bearing deposits. Depositories using the Pooling Method report to the State Treasurer the adequacy of their pooled collateral covering uninsured deposits. The State Treasurer does not confirm this information with the Authority or with the escrow agent. Because of the inability to measure the exact amouht of collateral pledged for the Authority under the Pooling Method, the potential exists fpr undercollaterization, and this risk may increase in periods of high cash flows. However, the State Treasurer of North Carolina enforces strict standards of financial stability for each ;depository that collateralizes public deposits under the Pooling Method. (21) G -'~