COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2008_part3 pot

Exhibit C
Other Total
Governmental Governmental
Funds
Funds
5,324,856$ 129,190,942$
260,614 5,524,917
121,589 19,834,415
- 119,266
- 171,078
-
46,691,687
5,707,059$
201,532,305$
25,506$ 15,121,929$
260,607
8,976,406
286,113
24,098,335
- 290,344
55,109 4,453,810
121,589 19,496,392
- 5,403,772
- 208,644
- 46,292,576
- 2,664,185
788,561 788,561
463,870 463,870
109,757 501,450
- 318,700
- 190,467

- 27,616
- 570,743
- 1,591,032
- 508,968
- 47,182,534
- 77,036
- 42,521,210
234,031 234,031
1,000,000 1,000,000
441,939 441,939
2,206,090
2,206,090
5,420,946
177,433,970
5,707,059$
201,532,305$
The accompanying notes are an integral part of the financial statements.
17
This is trial version
www.adultpdf.com
Exhibit D
GASTON COUNTY, NORTH CAROLINA
RECONCILIATION OF THE BALANCE SHEET
OF GOVERNMENT FUNDS TO THE STATEMENT OF NET ASSETS
FOR THE YEAR ENDED JUNE 30, 2008
Amounts reported for governmental activities in the
Statement of Net Assets are different because:
Total fund balances, per Exhibit C 177,433,970$
Capital assets, net of accumulated depreciation, used in governmental activities
are not current financial resources and, therefore, are not reported in the funds. 112,933,521

Deferred revenues in the governmental funds are used to offset accounts
receivable not expected to be available within 60 days of year-end. These
receivables are a component of net assets in the Statement of Net Assets. 6,379,911
Long-term liabilities and compensated absences are not due and payable in
the current period and, therefore, are not reported in the funds.
(203,074,145)

Net assets of governmental activities, per Exhibit A
93,673,257$

The accompanying notes are an integral part of the financial statements.
18
This is trial version
www.adultpdf.com
Exhibit E
GASTON COUNTY, NORTH CAROLINA
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2008
Public Capital Other Total
Assistance Improvements Governmental Governmental
General
Fund Fund Funds Funds
Revenues:
Ad valorem taxes 119,541,817$ -$ -$ 3,409,342$ 122,951,159$
Other taxes and licenses 40,888,986 - - - 40,888,986
Restricted intergovernmental revenues 6,029,460 23,637,885 3,643,954 4,173,846 37,485,145
Fees, licenses, and permits 3,807,646 - - - 3,807,646
Sales and services 18,863,784 - - - 18,863,784
E911 surcharge - - - 1,165,274 1,165,274

Investment earnings 2,106,685 401,045 4,708,445 284,327 7,500,502
Miscellaneous revenues 1,598,854
338,800 113,402 811 2,051,867
Total revenues 192,837,232
24,377,730 8,465,801 9,033,600 234,714,363
Expenditures:
Current:
General government 20,322,189 - - 105,093 20,427,282
Public safety 42,856,310 - - 3,946,414 46,802,724
Environmental protection 57,169 - - - 57,169
Economic and physical development 3,452,697 - - - 3,452,697
Human services 19,115,258 46,382,118 - - 65,497,376
Cultural and recreational 4,320,781 - - 471,754 4,792,535
Education 42,272,843 - - - 42,272,843
Capital outlay - - 34,718,107 - 34,718,107
Debt Service:
Principal retirement 3,192,517 16,429 - 12,111,763 15,320,709
Interest and fees 123,034
946 - 7,833,892 7,957,872
Total expenditures 135,712,798
46,399,493 34,718,107 24,468,916 241,299,314
Revenues over (under) expenditures 57,124,434
(22,021,763) (26,252,306) (15,435,316) (6,584,951)
Other Financing Sources (Uses):
Debt issued - - 24,900,000 - 24,900,000
Premium received on debt issue - - 323,357 - 323,357
Transfers in - 24,981,264 12,797,642 15,136,358 52,915,264
Transfers out (52,115,264)
(800,000) - - (52,915,264)
Total other financing sources (uses) (52,115,264)

24,181,264 38,020,999 15,136,358 25,223,357
Net change in fund balances 5,009,170 2,159,501 11,768,693 (298,958) 18,638,406
Fund Balances:
Beginning of year - July 1 63,312,779
14,898,200 74,864,681 5,719,904 158,795,564
End of year - June 30 68,321,949$
17,057,701$ 86,633,374$ 5,420,946$ 177,433,970$
The accompanying notes are an integral part of the financial statements.
19
This is trial version
www.adultpdf.com
Exhibit F
GASTON COUNTY, NORTH CAROLINA
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENT FUNDS TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2008
Amounts reported for governmental activities in the
Statement of Activities are different because:
Net change in fund balances - total governmental funds (Exhibit D) 18,638,406$
Capital outlays are reported as expenditures in the governmental funds statement. However, in the
Statement of Activities, capital outlay is not an expense, rather it is an increase in capital assets. 4,595,540
Depreciation expense allocates the costs of capital assets over their useful lives. It is not reported
as an expenditure in the governmental funds statement.
(5,786,807)
Exhibit D reports revenues using a current financial resources basis, which generally means revenue
is recognized when collected or is expected to be collected within 90 days of year-end. Exhibit B reports
revenues when the earning process is complete, regardless of when it is collected. This measurement
difference causes timing of revenue recognition differences for the following revenue types:
Property taxes (744,961)

Sales and services 509,300
Expenses related to compensated absences and law enforcement officers' separation
allowance that do not require current financial resources are not reported as expenditures
in the governmental funds statement. 502,516
Other post-employment benefit net obligation
(4,610,390)
Proceeds from issuance of debt are reported as revenues in the governmental funds statement.
However, in the Statement of Activities, it is not a revenue, rather it is an increase in liabilities. (24,900,000)
Principal repayments are reported as expenditures in the governmental fund statement. However,
in the Statement of Activities, these transactions are not an expense, rather they are a decrease
in liabilities. (This line includes debt refunding transactions.) 14,917,798
The change in accrued interest related to long-term debt that do not require current financial resources
are not reported as expenditures in the governmental funds statement.
(500,000)

Change in net assets of governmental activities - Exhibit B
2,616,620$

The accompanying notes are an integral part of the financial statements.
20
This is trial version
www.adultpdf.com



This is trial version
www.adultpdf.com
GASTON COUNTY, NORTH CAROLINA
GENERAL FUND AND ANNUALLY BUDGETED
MAJOR SPECIAL REVENUE FUNDS

STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2008
Original Final Variance
Budget
Budget Actual Over/Under
Revenues:
Ad valorem taxes 116,722,905$ 116,722,905$ 119,541,817$ 2,818,912$
Other taxes and licenses 38,520,748 38,567,281 40,888,986 2,321,705
Restricted intergovernmental revenues 4,949,028 5,580,437 6,029,460 449,023
Permits and fees 3,775,165 3,775,165 3,807,646 32,481
Sales and services 18,823,737 20,481,606 18,863,784 (1,617,822)
Investment earnings 1,000,000 1,003,932 2,106,685 1,102,753
Miscellaneous
202,026
275,918 1,598,854 1,322,936
Total revenues
183,993,609
186,407,244 192,837,232 6,429,988
Expenditures:
General government 27,427,856 25,841,165 20,322,189 5,518,976
Public safety 42,710,864 46,715,773 42,856,310 3,859,463
Environmental protection 56,160 56,160 57,169 (1,009)
Economic and physical development 3,952,757 4,329,083 3,452,697 876,386
Human services 20,432,140 27,723,829 19,115,258 8,608,571
Cultural and recreational 4,715,687 5,056,381 4,320,781 735,600
Education 42,102,971 42,555,243 42,272,843 282,400
Principal retirement 3,638,400 3,371,405 3,192,517 178,888
Interest and fees
231,566

219,754 123,034 96,720
Total expenditures
145,268,401
155,868,793 135,712,798 20,155,995
Revenues over (under) expenditures
38,725,208
30,538,451 57,124,434 26,585,983
Other Financing Sources (Uses):
Appropriated fund balance 8,208,680 21,576,813 - (21,576,813)
Transfers in - - - -
Transfers out
(46,933,888)
(52,115,264) (52,115,264) -
Total other financing sources (uses)
(38,725,208)
(30,538,451) (52,115,264) (21,576,813)
Revenues and other financing sources
(uses) over (under) expenditures and
other financing sources (uses)
-$
-$ 5,009,170 5,009,170$
Fund Balances:
Beginning of year - July 1
63,312,779

End of year - June 30
68,321,949$

General Fund
The accompanying notes are an integral part of the financial statements.

21
This is trial version
www.adultpdf.com
Exhibit G
Original Final Variance
Budget
Budget Actual Over/Under
-$ -$ -$ -$
- - - -
24,215,235 25,321,395 23,637,885 (1,683,510)
- - - -
- - - -
- 664 401,045 400,381
218,150
271,571 338,800 67,229
24,433,385
25,593,630 24,377,730 (1,215,900)
- - - -
- - - -
- - - -
- - - -
50,998,815 53,543,008 46,382,118 7,160,890
- - - -
- - - -
53,296 53,296 16,429 36,867
7,880
7,880 946 6,934
51,059,991
53,604,184 46,399,493 7,204,691
(26,626,606)

(28,010,554) (22,021,763) 5,988,791
3,168,423 3,829,290 - (3,829,290)
23,458,183 24,981,264 24,981,264 -
-
(800,000) (800,000) -
26,626,606
28,010,554 24,181,264 (3,829,290)
-$
-$ 2,159,501 2,159,501$
14,898,200

17,057,701$

Public Assistance Fund
The accompanying notes are an integral part of the financial statements.
22
This is trial version
www.adultpdf.com
Exhibit H
GASTON COUNTY, NORTH CAROLINA
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
JUNE 30, 2008
Solid Waste
Fund
Assets:
Current assets:
Cash and cash equivalents 4,878,275$
Accounts receivable, net 652,800
Inventories

9,858

Total current assets
5,540,933

Noncurrent assets:
Land, improvements and construction in progress 2,458,715
Capital assets, net 12,837,218
Accumulated depreciation (6,501,114)

Total noncurrent assets 8,794,819

Total assets 14,335,752$

Liabilities:
Current liabilities:
Accounts payable and accrued liabilities 1,183,326$
Compensated absences 31,000
Current portion of closure/postclosure care 350,000
Current portion of capital leases 162,802

Total current liabilities 1,727,128

Noncurrent liabilities:
Compensated absences 24,942
Capital leases and notes payable 90,059
Other post-employment benefits 71,635
Landfill closure/postclosure care 4,213,767

Total noncurrent liabilities 4,400,403

Total liabilities 6,127,531

Net Assets:
Invested in capital assets, net of related debt 8,541,958
Unrestricted net assets (333,737)

Total net assets 8,208,221$

The accompanying notes are an integral part of the financial statements.
23
This is trial version
www.adultpdf.com
Exhibit I
GASTON COUNTY, NORTH CAROLINA
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN
FUND NET ASSETS - PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2008
Solid Waste
Fund
Operating Revenues:
Charges for services 5,782,609$
Other operating revenues
302,292

Total operating revenues
6,084,901

Operating Expenses:
Landfill operations 4,282,537

Depreciation
605,121

Total operating expenses
4,887,658

Operating income (loss) 1,197,243

Nonoperating Revenues (Expenses):
Interest expense (13,828)
Investment earnings
129,070

Total nonoperating revenues (expenses)
115,242

Change in net assets 1,312,485
Net Assets:
Beginning of year - July 1
6,895,736

End of year - June 30
8,208,221$

The accompanying notes are an integral part of the financial statements.
24
This is trial version
www.adultpdf.com
Exhibit J
GASTON COUNTY, NORTH CAROLINA

STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2008
Solid Waste
Fund
Cash Flows from Operating Activities:
Cash received from customers 5,529,336$
Other operating receipts 302,292
Cash paid to employees for services (1,131,425)
Cash paid for goods and services
(1,545,205)

Net cash provided (used) by operating activities
3,154,998

Cash Flows from Capital and Related Financing Activities:
Principal payments (185,701)
Proceeds from issuance of long-term debt 96,258
Acquisition of capital assets (1,862,670)
Interest expense
(13,828)
Net cash provided (used) by capital and related financing activities
(1,965,941)

Cash Flows from Investing Activities:
Interest income
129,070

Net increase in cash and cash equivalents
1,318,127

Cash and Cash Equivalents:
Beginning of year - July 1
3,560,148

End of year - June 30
4,878,275$

Reconciliation of operating income to net cash
provided (used) by operating activities:
Operating income 1,197,243$
Adjustments to reconcile operating income to net
cash provided (used) by operating activities:
Depreciation and amortization 605,121
Landfill closure and postclosure care cost 623,689
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (253,273)
(Increase) decrease in inventories and prepaid expenses 7,699
Increase (decrease) in accounts payable 968,306
Increase (decrease) in accrued payroll and other liabilities
6,213

Net cash provided (used) by operating activities
3,154,998$

The accompanying notes are an integral part of the financial statements.
25
This is trial version
www.adultpdf.com
Exhibit K

GASTON COUNTY, NORTH CAROLINA
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2008
Agency
Funds
Assets:
Cash and cash equivalents
327,149$

Total assets
327,149$

Liabilities:
Fiduciary depository accounts
327,149$

Total liabilities
327,149$
The accompanying notes are an integral part of the financial statements.
26
This is trial version
www.adultpdf.com
GASTON COUNTY, NORTH CAROLINA

NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008


1. Summary of Significant Accounting Policies

The accompanying financial statements and the following accounting policies of Gaston County,
North Carolina ("County") conform to accounting principles generally accepted in the United States
of America as applicable to local governments. The Governmental Accounting Standards Board
(GASB) is the accepted standard setting body for establishing governmental accounting and financial
reporting principles. The following is a summary of the more significant accounting policies:

A. Reporting Entity

The County, which is governed by a seven-member Board of Commissioners, is one of the 100
counties established in North Carolina under North Carolina General Statute 153A-10. As
required by accounting principles generally accepted in the United States of America, these
financial statements present the County and its component unit, a legally separate entity for which
the County is financially accountable. The blended component unit, although a separate legal
entity, are in substance, part of the County’s operations.

Blended Component Unit

The Gaston County Soil and Water Conservation District ("District") which exist to provide
leadership and conservation assistance to the people of Gaston County, to improve and sustain
their soil, water, air, plant and wildlife resources. The County’s Board of Commissioners also
serve as the governing body for the District. Therefore, the District is reported as part of the
general government activities in the County’s financial statements.

B. Basis of Presentation

Government-Wide Statements: The Statement of Net Assets and the Statement of Activities
display information about the primary government. 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 County. Governmental activities generally are
financed through taxes, intergovernmental revenues, and other nonexchange transactions.
Business-type activities are financed in whole or in part by fees charged to external parties.

The Statement of Activities presents a comparison between direct expenses and program revenues
for the different business-type activities of the County and for each function of the County’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 fees and charges paid by the recipients of goods or services offered by
the programs and 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,
including all taxes, are presented as general revenues.

27
This is trial version
www.adultpdf.com
GASTON COUNTY, NORTH CAROLINA

NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008


Fund Financial Statements: The fund financial statements provide information about the
County’s funds. Separate statements for each fund category — governmental, proprietary, and
fiduciary — are presented. The emphasis of fund financial statements is on major governmental
and enterprise funds, each displayed in a separate column. All remaining governmental and
proprietary funds are aggregated and reported as nonmajor funds. The County only has one
proprietary fund.

Proprietary fund operating revenues, such as charges for services, result from exchange
transactions associated with the principal activity of the fund. Exchange transactions are those in
which each party receives and gives up essentially equal values. Nonoperating revenues, such as
subsidies and investment earnings, result from nonexchange transactions or ancillary activities.

The County reports the following major governmental funds:

General Fund - The General Fund is the general operating fund of the County. It is used to
account for all financial resources except those required to be accounted for in another fund.

Public Assistance Special Revenue Fund - The Public Assistance Special Revenue Fund is used
to account for the activities of the Department of Social Services. The transactions include
proceeds of specific revenue sources (other than special assessments, expendable trusts, or major
capital projects) that are legally restricted to expenditures for specified purposes.

Capital Improvements Capital Project Fund - The Capital Improvements Capital Project Fund
is used to account for financial resources for capital improvements for all County departments as
well as the Gaston County Schools and Gaston College.

The County reports the following major proprietary fund:

Solid Waste Fund - The Solid Waste Fund is used to account for those operations that are
financed and operated in a manner similar to private business enterprises or where the governing
body has decided that the periodic determination of revenues earned, costs incurred, and/or net
income is necessary for management accountability.

Additionally, the County reports the following fund types:

Fiduciary Funds - Fiduciary Funds account for assets being held by the government in a trustee
capaCounty or as an agent on behalf of others. Trust funds account for assets held by the

government under the terms of a formal trust agreement.

28
This is trial version
www.adultpdf.com
GASTON COUNTY, NORTH CAROLINA

NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008


Fiduciary funds include the following fund type:

Agency Funds - Agency Funds are used to account for assets held by the government as an agent
for individuals, private organizations, other governments, and/or other funds. They are custodial
in nature and do not involve measurement of results of operations. The County’s agency funds
are used to account for monies deposited with the County’s Department of Social Services for the
benefit of certain individuals for whom the County acts as an agent, to account for funds collected
by the tax collector’s office on behalf of other municipal entities within the County, to account
for monies held on behalf of inmates of the County jail, to account for the additional interest on
delinquent motor vehicle property tax payments to be transferred to N.C. State Treasurer, and to
report various legal fines and forfeitures that the County is required to remit to the Gaston County
Schools.

C. Measurement Focus, Basis of Accounting

In accordance with North Carolina General Statutes, all funds are maintained during the year
using the modified accrual basis of accounting.

Government-Wide, Proprietary, and Fiduciary Fund Financial Statements: The government-

wide, proprietary, and fiduciary fund financial statements are reported using the economic
resources measurement focus, except for the agency funds which have no measurement focus,
and the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded at the time liabilities are incurred, regardless of when the related cash flows take place.
Nonexchange transactions, in which the County gives (or receives) value without directly
receiving (or giving) equal value in exchange, include property taxes, grants, entitlements, and
donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for
which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in the
fiscal year in which all eligibility requirements have been satisfied.

Amounts reported as program revenues include 1) charges to customers or applicants for goods,
services, or privileges provided; 2) operating grants and contributions; and 3) capital grants and
contributions, including special assessments. Internally dedicated resources are reported as
general revenues rather than as program revenues. Likewise, general revenues include all taxes.

Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund’s principal ongoing operations. The
principal operating revenues of the County enterprise funds are charges to customers for sales and
services. Operating expenses for enterprise funds include the cost of sales and services,
administrative expenses, and depreciation on capital assets. All revenues and expenses not
meeting this definition are reported as nonoperating revenues and expenses.

29
This is trial version
www.adultpdf.com
GASTON COUNTY, NORTH CAROLINA

NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008

Governmental Fund Financial Statements: Governmental funds are reported using the current
financial resources measurement focus and the modified accrual basis of accounting. Under this
method, revenues are recognized in the accounting period when they become susceptible to
accrual (i.e., when they are “measurable” and “available”). Expenditures are recorded when the
related fund liability is incurred, except for principal and interest on general long-term debt,
claims and judgments, and compensated absences, which are recognized as expenditures to the
extent they have matured. General capital asset acquisitions are reported as expenditures in
governmental funds. Proceeds of long-term debt and acquisitions under capital leases are
reported as other financing sources.

The County considers all revenues available if they are collected within 90 days after year-end,
except for property taxes. Ad valorem property taxes are not accrued as a revenue because the
amount is not susceptible to accrual. At June 30, taxes receivable are materially past due and are
not considered to be an available resource to finance the operations of the current year. Also, as
of January 1, 1993, State law altered the procedures for the assessment and collection of property
taxes on registered motor vehicles in North Carolina. Effective with this change in the law, the
County is responsible for billing and collecting the property taxes on all registered motor vehicles
on behalf of all municipalities and special tax districts in the County. For those motor vehicles
registered under the staggered system, property taxes are due on the first day of the fourth month
after the vehicles are registered. The billed taxes are applicable to the fiscal year in which they
become due. Therefore, taxes for vehicles registered from March 2007 through February 2008
apply to the fiscal year ended June 30, 2008. Uncollected taxes, which were billed during this
period, are shown as a receivable on these financial statements and are offset by deferred
revenues.

Sales taxes collected and held by the State at year-end on behalf of the County are recognized as
revenue. Intergovernmental revenues and sales and services are not susceptible to accrual because
generally they are not measurable until received in cash. Expenditure-driven grants are

recognized as revenue when the qualifying expenditures have been incurred and all other grant
requirements have been satisfied.

Under terms of grant agreements, the County funds certain programs by a combination of specific
cost-reimbursement grants, categorical block grants, and general revenues. Thus, when program
expenses are incurred, there are both restricted and unrestricted net assets available to finance the
program. It is the County’s policy to first apply cost-reimbursement grant resources to such
programs, followed by categorical block grants, and then by general revenues.

All governmental and enterprise funds of the County follow the Financial Accounting Standards
Board (FASB) Statements and Interpretations issued on or before November 30, 1989,
Accounting Principles Board Opinions, and Accounting Research Bulletins, unless those
pronouncements conflict with GASB pronouncements. The County has elected not to follow
FASB pronouncements issued after November 30, 1989.

30
This is trial version
www.adultpdf.com
GASTON COUNTY, NORTH CAROLINA

NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008


D. Budgetary Data

Budgetary control is exercised in all funds except the agency funds. Appropriations are made at
the function level and amended as necessary by the Board of Commissioners. The budget
amounts presented in the financial statements are the final amounts budgeted as of June 30, 2008.
The budget was prepared on the modified accrual basis of accounting as required by North

Carolina General Statutes. During the year, several immaterial amendments to the original
budget were necessary. The budget ordinance must be adopted by July 1 of the fiscal year or the
governing board must adopt an interim budget that covers that time until the annual ordinance can
be adopted.

E. Assets, Liabilities, and Fund Equity

Deposits and Investments

All deposits of the County are made in board-designated official depositories and are secured as
required by G.S.159-31. The County may designate, as an official depository, any bank or
savings and loan association whose principal office is located in North Carolina. Also, the
County may establish time deposit accounts such as NOW and SuperNOW accounts, money
market accounts, and certificates of deposit.

State law [G.S. 159-30(c)] authorizes the County to invest in obligations of the United States or
obligations fully guaranteed both as to principal and interest by the United States; obligations of
the State of North Carolina; bonds and notes of any North Carolina local government or public
authority; obligations of certain non-guaranteed federal agencies; certain high-quality issues of
commercial paper and bankers acceptances and the North Carolina Capital Management Trust
(NCCMT).

The County’s investments with a maturity of more than one year at acquisition and non-money
market investments are carried at fair value as determined by quoted market prices. The
securities of the NCCMT Cash Portfolio, an SEC-registered (2a-7) money market mutual fund,
are valued at fair value, which is the NCCMT’s share price. Money market investments that have
a remaining maturity at the time of purchase of one year or less are reported at amortized cost.

Cash and Cash Equivalents

The County pools money from several funds to facilitate disbursement and investment and to
maximize investment income. Therefore, all cash and investments are essentially demand
deposits and are considered cash and cash equivalents. Restricted cash represents unexpended
debt proceeds.
31
This is trial version
www.adultpdf.com
GASTON COUNTY, NORTH CAROLINA

NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008


Ad Valorem Taxes Receivable

In accordance with State law [G.S. 105-347 and G.S. 159-13(a)], the County levies ad valorem
taxes on property other than motor vehicles on July 1, the beginning of the fiscal year. The taxes
are due on September 1 (lien date), but penalties do not begin to accrue until the following
January 6. The taxes are based on the assessed values as of January 1, 2007.

Allowances for Doubtful Accounts

All receivables that historically experience uncollectible accounts are shown net of an allowance
for doubtful accounts. This amount is estimated by analyzing the percentage of receivables that
were written off in prior years.
Nonmajor
S
p
ecial
General

Revenue
Landfill
Taxes receivable 4,500,000$ 60,000$ -$
Emergency management (GEMS) 10,380,000 - -
Health department 348,687 - -
Accounts receivable -
- 15,000
15,228,687$
60,000$ 15,000$

Inventories and Prepaid Items

The inventories of the County are valued at cost (first-in, first-out), which approximates market.
The County’s General Fund inventory consists of expendable supplies that are recorded as
expenditures when purchased. The inventory of the County’s Enterprise Fund consists of
materials and supplies held for consumption. The cost of the inventory carried in the Enterprise
Fund is recorded as an expense as it is consumed.

Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items in both government-wide and fund financial statements.

Capital Assets

Purchased or constructed capital assets are reported at cost or estimated historical cost. Donated
capital assets are recorded at their estimated fair value at the date of donation. The cost of normal
maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives
are not capitalized. Capital assets are depreciated on the straight-line method over their estimated
useful lives:

Buildings and Improvements 20 - 30 years

Vehicles 5 years
Equipment 7 - 15 years

32
This is trial version
www.adultpdf.com
GASTON COUNTY, NORTH CAROLINA

NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2008


The County holds title to certain Gaston County Board of Education properties that have not been
included in capital assets. The properties have been deeded to the County to permit certificates of
participation financing of acquisition and construction costs. Agreements between the County
and the Board of Education give the Board of Education full use of the facilities, full
responsibility for maintenance of the facilities, and provide that the County will convey title to
the property back to the Board of Education once all restrictions of the financing agreements have
been met. The properties are reflected as capital assets in the financial statements of the Gaston
County Board of Education.

Interest incurred during the construction phase of proprietary fund type capital assets is reflected
in the capitalized value of the asset constructed.

Long-Term Obligations

In the government-wide financial statements and in the proprietary fund types in the fund
financial statements, long-term debt and other long-term obligations are reported as liabilities in
the applicable governmental activities, business-type activities, or proprietary fund type statement
of net assets.

In the fund financial statements for governmental fund types, the face amount of debt issued is
reported as an other financing source.

Compensated Absences

The vacation policy of the County provides for the accumulation of up to thirty (30) days of
earned vacation leave with such leave being fully vested when earned. For the County’s
government-wide and proprietary funds, an expense and a liability for compensated absences and
the salary-related payments are recorded as the leave is earned.

The sick leave policy of the County provides for an unlimited accumulation of earned sick leave.
Sick leave does not vest, but any unused sick leave accumulated at the time of retirement may be
used in the determination of length of service for retirement benefit purposes. Since the County
has no obligation for the accumulated sick leave until it is actually taken, no accrual for sick leave
has been made.

Net Assets/Fund Balances

Net assets in the government-wide and proprietary fund financial statements are classified as
invested in capital assets, net of related debt; restricted; and unrestricted. Restricted net assets
represent constraints on resources that are externally imposed by creditors, grantors, contributors,
or laws or regulations of other governments or imposed by law through State statute.

33
This is trial version
www.adultpdf.com