Notes to Financial Statements
June 30, 2006
- Reporting Entity
The Devens Enterprise Commission's general purpose financial statements include the operations of all organizations for which the Board of Commissioners exercise oversight responsibility. Oversight responsibility is demonstrated by financial interdependency, selection of governing authority, designation of management, ability to significantly influence operations and accountability for fiscal matters.
Based on the aforementioned oversight criteria, the Devens Enterprise Commission was the only entity included in the accompanying general purpose financial statements.
- Summary of Significant Accounting Policies
The accounting policies for financial reporting purposes of the Devens Enterprise Commission conform to generally accepted accounting principles for local governmental units. The following is a summary of the significant accounting policies:
A. Fund Accounting
The Commission reports its financial activities in one proprietary fund type in order to comply with the limitations and restrictions placed on both the resources available and the services provided.
This fund is used to account for operations that are financed and operated in a manner similar to private business enterprises where the costs of providing goods or services to the general public on a continuing basis are financed or recovered primarily through user charges.
B. Basis of Accounting
The accompanying financial statements have been prepared and presented on the accrual basis of accounting. Under this method, revenues are recognized in the accounting period in which they are earned and expenses are recognized when the related liability is incurred. The Commission applies Financial Accounting Standards Board (FASB) pronouncements and Accounting Principles Board (APB) opinions issued on or before November 30, 1989, unless those pronouncements conflict with or contradict Governmental Accounting Standards Board (GASB) pronouncements, in which case GASB prevails.
Revenue Recognition
In accordance with Governmental Accounting Standards Board Statement #33, fees charged for permits are considered revenue when they are earned. For the most part, the revenue is earned when a permit is issued.
- Pension Plan
A. Plan Description
Certain employees of the Commission are members of the Commonwealth of Massachusetts Pension System, a cost sharing multiple-employer defined benefit pension plan administered by the Commonwealth. The system provides retirement benefits, cost of living adjustments, disability benefits and death benefits. The system is governed by Chapter 32 of the Massachusetts General Laws (MGL). The authority to establish and amend benefit provisions requires a statutory change to Chapter 32. The Commonwealth of Massachusetts Pension System issues a publicly available financial report that includes financial statements and the required supplementary information. That report may be obtained by writing to the State Retirement Board, 1 Ashburton Place, Room 219, Boston, MA 02108.
B. Funding Plan
Active members of the Commonwealth of Massachusetts Pension System contribute either 5%, 7%, 8% or 9% of their gross regular compensation depending on the date upon which their membership began. An additional 2% is required from employees for earnings in excess of $30,000. The contribution requirements of plan members is determined by M.G.L. Chapter 32.
The Commission does not contribute to the System.
- Cash and Investments
Deposits
Custodial Credit Risk
Custodial credit risk is the risk that in the event of a bank failure, the Commission's deposits may not be returned to it. The Commission does not have a formal deposit policy for custodial credit risk. As of June 30, 2006, none of the Commissions' bank balance of $378,090 was exposed to credit risk.
Investments
As of June 30, 2006, the Commission did not have any investments.
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The Commission does not have a formal policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.
Credit Risk Rate
Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The Commission does not have a formal policy relating to credit risk.
Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The Commission does not have a formal policy that limits the amount it may invest in a single issuer (state law limits the amount that may be deposited in a financial institution without collateralization.)
B. Capital Assets
Capital assets, (office equipment) are reported in the accompanying financial statements. The Commission, also, reported assets for its web page and EcoStar manual. Such assets are recorded at historical cost.
The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives is not capitalized.
Depreciation and amortization are charged using the straight line method over the following estimated useful lives.
| Assets | Years |
| Office Equipment | 5-7 |
| Web Page | 3 |
| Eco Star Manual | 3 |
|
| | | Beginning Balance | Additions | Deletions | Ending Balance |
| Assets Being Depreciated or Amortized: | | | | |
| Office Equipment | $15,771 | $ - | $ - | $15,771 |
| Web Page | 15,507 | - | - | 15,507 |
| EcoStar Manual | 7,200 | - | - | 7,200 |
| Total Capital Assets Being Depreciated | 38,478 | - | - | 38,478 |
| Less Accumulated Depreciation and Amortization for: | | | | |
| Office Equipment | 12,842 | 1,332 | - | 14,174 |
| Web Page | 15,507 | - | - | 15,507 |
| EcoStar Manual | 1,200 | 2,400 | - | 3,600 |
| Total Accumulated Depreciation | 29,549 | 3,732 | - | 33,281 |
| Total Fixed Assets, Net | $8,929 | $(3,732) | $ - | $5,197 |
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