Institutional Federal Compliance Report 2021

______________________________________________________________________________________________ STATE OF NEW YORK • 61

j. Long-Term Obligations In the Government-wide Statement of Net Position and in the Enterprise Funds Statement of Net Posi- tion, long-term debt and other long-term obligations are reported as liabilities. For governmental activities, bond premiums and discounts are reported as a com- ponent of the related bonds payable, and gains and losses on refunding are reported as deferred inflows of resources or deferred outflows of resources. Both are amortized over the life of the bonds using the straight-line method. For business-type activities, SUNY losses on refunding are reported as deferred outflows of resources and amortized over the life of the related debt. CUNY bond premiums and dis- counts are reported as a component of the related bonds payable, and gains and losses on refunding are reported as deferred inflows of resources or deferred outflows of resources. Both are amortized over the life of the bonds using the straight-line method. Issuance costs are reported as an expense in the period incurred. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources, while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as non-personal service expenditures in the period incurred. k. Compensated Absences The estimated vacation leave liability for State employ- ees at March 31, 2019 is $925 million, which represents an increase of $26 million over the prior year. State employees accrue vacation leave based primarily on the number of years employed up to a maximum rate of 25 days per year, but may accumulate no more than a maximum of 40 days. SUNY employees accrue vacation leave based pri- marily on the number of years employed up to a maximum rate of 21 days per year and may accumu- late no more than a maximum of 40 days. CUNY employees accrue vacation leave based upon the number of years employed, with the maximum accu- mulation generally ranging from 45 to 50 days. The liability for vacation leave approximated $292 million and $147 million for SUNY and CUNY, respectively, at June 30, 2018. CUNY employees may receive payments of up to 50 percent of the value of their accumulated sick leave as of the date of retirement from CUNY. CUNY reported a liability of $50 million for sick leave credits in other postemployment benefits liabilities at June 30, 2018.

Lottery’s employees, upon termination, may receive vacation pay benefits up to a maximum of 30 days. Lottery recognizes employees’ compensated absence benefits when earned. The liability for Lottery employees’ compensated absences was approximately $1 million as of March 31, 2019. l. Accounting for Lease/Purchase and Other Financing Arrangements The construction of certain State office buildings, campus facilities and other public facilities has been financed through bonds and notes issued by public benefit corporations pursuant to lease/purchase and other financing arrangements with the State. The State has also entered into financing arrangements with public benefit corporations that have issued bonds to finance past State budgetary deficits and grants to local governments for both capital and operating pur- poses (Note 7). These lease/purchase and other financing arrange- ments, which the State will repay over the duration of the agreements, constitute long-term liabilities. The amount included in obligations under lease/purchase and other financing arrangements consists of total future principal payments and equals the outstanding balance of the related bonds and notes. m. State Lottery The State Lottery is accounted for as an Enterprise Fund. The revenues, administrative costs, aid to edu- cation and expenses for amounts allocated to prizes are reported, and uncollected ticket sales at March 31, 2019 are accrued. Prize monies to meet long-term prize payments are invested in United States govern- ment-backed obligations, New York City Transitional Finance Authority municipal bonds and U.S. Agency for International Development (AID) bonds, and are recorded at fair value. Lottery prize liabilities are recorded at a discounted value equivalent to the related investments. At March 31, 2019, the prize liabilities of approximately $1.8 billion were reported at a dis- counted value of approximately $1.2 billion (at interest rates ranging from 0.29 percent to 7.77 percent). n. Net Position On the government-wide, enterprise fund, component unit and fiduciary fund financial statements, “Net Position” is the difference between (a) assets and deferred outflows of resources and (b) liabilities and deferred inflows of resources. Net position is reported as restricted when con- straints placed on net position use are either: a. Externally imposed by creditors (such as debt covenants), grantors, contributors, laws or reg- ulations of other governments; or b. Imposed by law through constitutional provi- sions or enabling legislation.