Institutional Federal Compliance Report 2021

______________________________________________________________________________________________ STATE OF NEW YORK • 57

recorded by the State as taxpayers earn income (per- sonal income, general business and other taxes), as sales are made (consumption and use taxes), and as the taxable event occurs (miscellaneous taxes), net of estimated overpayments (refunds). Receivables not expected to be collected within the next 12 months are recorded as deferred inflows of resources. Expen- ditures and related liabilities are generally recorded in the accounting period the liability is incurred, to the extent it is expected to be paid within the next 12 months, with the exception of items covered by GASB Interpretation 6 (GASBI 6), Recognition and Measure- ment of Certain Liabilities and Expenditures in Governmental Fund Financial Statements . GASBI 6 modified the recog- nition criteria of certain expenditures and liabilities. GASBI 6 requires that expenditures and liabilities such as debt service, compensated absences, and claims and judgments be recorded in the governmental fund statements only when they mature or become due for payment within the period. Expenditure-driven grants are recognized as revenues when the qualifying expen- ditures have been incurred and all other grant require- ments have been met and amounts are considered available. Other nonexchange grants and subsidies, such as local assistance grants and public benefit cor- poration subsidies, are recognized as expenditures when all requirements of the grant and/or subsidy have been satisfied. The State reports the following major and other governmental funds: General Fund —is the primary operating fund of the State and is used to account for all financial transactions not required to be accounted for in another fund. Federal Special Revenue Fund —accounts for federal grants received by the State that are ear- marked for specific programs. In order to comply with federal accounting and reporting require- ments, certain federal grants are accounted for in a number of accounts that are combined and reported as the Federal Special Revenue Fund. Accounts that are combined include the Fed- eral USDA-Food and Nutrition Services Account (Federal USDA-FNS), the Federal Health and Human Services Account (Federal DHHS), the Federal Education Account, the Federal Operating Grants Account, the Unemployment Insurance Administration Account, the Unemployment Insurance Occupational Training Account and the Federal Employment and Training Grants Account. General Debt Service Fund —accounts for the payment of principal and interest on the State’s general debt, and payments on certain lease/pur- chase and other contractual obligations.

However, balances due and resource flows between governmental and business-type activities have not been eliminated. Governmental activities, which nor- mally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary gov- ernment is reported separately from certain legally separate component units for which the primary gov- ernment is financially accountable. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or program are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Certain indirect costs have been allocated and are reported as direct program expenses of individual functions or programs. Program revenues include: charges to customers or applicants who purchase, use, or directly benefit from goods, ser- vices, or privileges provided by a given function or segment; grants and contributions that are restricted to meeting the operational requirements of a particular function or segment; and capital grants and contri- butions, including special assessments. Internally ded- icated resources are reported as general revenues rather than as program revenues. Taxes and other items not included as program revenues are reported as general revenues, as required. Separate financial statements are provided for Governmental Funds, Enterprise Funds and Fiduciary Funds, even though the latter are excluded from the government-wide financial statements. Major individ- ual Governmental Funds and major individual Enter- prise Funds are reported as separate columns in the fund financial statements. c. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide financial statements are pre- pared using the economic resources measurement focus and the accrual basis of accounting, as are the Enterprise Funds, the Component Units and the Fiduciary Funds financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Taxes are recognized as revenues in the year in which they are earned. Grants, entitle- ments and donations are recognized as revenues as soon as all eligibility requirements have been met. Governmental fund financial statements are prepared using the current financial resources mea- surement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered available when they are collected within the current period or collectible within 12 months of the end of the current fiscal period. Tax revenues are