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HUDSON CITY SCHOOL DISTRICT
SUMMIT COUNTY, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2015

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

In addition to liabilities, both the government-wide statement of net position and the governmental
fund financial statements report a separate section for deferred inflows of resources. Deferred inflows
of resources represent an acquisition of net position that applies to a future period and will not be
recognized as an inflow of resources (revenue) until that time. For the District, deferred inflows of
resources include property taxes, payments in lieu of taxes and unavailable revenue. Property taxes and
payments in lieu of taxes represent amounts for which there is an enforceable legal claim as of June 30,
2015, but which were levied to finance fiscal year 2016 operations. These amounts have been recorded
as a deferred inflow of resources on both the government-wide statement of net position and the
governmental fund financial statements. Unavailable revenue is reported only on the governmental
funds balance sheet, and represents receivables which will not be collected within the available period.
For the District unavailable revenue includes, but is not limited to, delinquent property taxes and
intergovernmental grants. These amounts are deferred and recognized as an inflow of resources in the
period the amounts become available.

The District also reports a deferred inflow of resources for the net difference between projected and
actual earnings on pension plan investments related to the District’s net pension liability. This deferred
inflow of resources is only reported on the government-wide statement of net position.

Expenses/Expenditures - On the accrual basis of accounting, expenses are recognized at the time they
are incurred. The entitlement value of donated commodities received during the year is reported in the
financial statements as an expense/expenditure with a like amount reported as intergovernmental
revenue.

The measurement focus of governmental fund accounting is on decreases in net financial resources
(expenditures) rather than expenses. Expenditures are generally recognized in the accounting period in
which the related fund liability is incurred, if measurable. Allocations of cost, such as depreciation and
amortization, are not recognized in governmental funds.

E. Budgets

The budgetary process is prescribed by provisions of the Ohio Revised Code and entails the
preparation of budgetary documents within an established timetable. The major documents prepared
are the tax alternate budget, the certificate of estimated resources, and the appropriation resolution, all
of which are prepared on the budgetary basis of accounting. The certificate of estimated resources and
the appropriations resolution are subject to amendment throughout the year with the legal restriction
that appropriations cannot exceed estimated resources, as certified. All funds, other than agency funds,
are legally required to be budgeted and appropriated. The legal level of budgetary control has been
established by the Board of Education at the fund level. Any budgetary modifications at this level may
only be made by resolution of the Board of Education. Although the legal level of budgetary control
was established at the fund level of expenditures for the general fund, the District has elected to present
the budgetary statement comparison at the fund and function level of expenditures.

Advances in and advances out are not required to be budgeted since they represent a temporary cash
flow resource and are intended to be repaid.

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