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• <br />CITY OF LA PORTE, TEXAS <br />Reconciliation of the Statement of Revenues, Expenditures and <br />Changes in Fund Balances of Governmental Funds to the <br />Statement of Activities <br />For the Year Ended September 30, 2004 <br />Amounts reported for governmental activities in the statement of activities are <br />different because: <br />Net change in fund balances —total governmental funds: $ (3,729,254) <br />Governmental funds report outlays for capital assets as expenditures because <br />such outlays use current financial resources. In contrast, the statement of <br />activities reports only a portion of the outlay as expense. The outlay is allocated <br />over the assets' estimated useful lives as depreciation expense for the period. <br />This is the amount by which capital outlays $3,992,881 exceeded depreciation <br />$2,346,058 in the current period. 1,646,823 <br />Governmental funds do not present revenues that are not available to pay <br />current obligations. In contrast, such revenues are reported in the statement <br />of activities when earned. 328,605 <br />Governmental funds report bond proceeds as current financial resources. In <br />contrast, the statement of activities treats such issuance of debt as a liability. <br />Governmental funds report repayment of bond principal as an expenditure. In <br />contrast, the statement of activities treats such repayments as a reduction in <br />long-term liabilities. This is the amount by which proceeds exceeded <br />repayments. 1,490,000 <br />Some expenses reported in the statement of activities do not require the use of <br />current financial resources and these are not reported as expenditures in <br />governmental funds: <br />Accrued interest not reflected in governmental funds <br />10,190 <br />Additional compensated absences not reflected in governmental funds <br />(124,125) <br />Internal service funds are used by management to charge the costs of certain <br />activities, such as fleet maintenance and information technology, to individual <br />funds. The net revenue (expense) of the internal service funds is reported with <br />governmental activities. <br />(1,018,821) <br />Change in net assets of governmental activities <br />$ (1,396,582) <br />See accompanying notes to basic financial statements. <br />36 <br />