Institutional Federal Compliance Report 2021

______________________________________________________________________________________________ STATE OF NEW YORK • 65

between the State and the retired employee. The amounts earned include employee sick leave credits expected to be used to pay for a share of post-retire- ment health insurance. The State, including the Lottery, recognizes the cost of providing health insur- ance by recording its share of insurance premiums as an expenditure in the respective fund in the year paid. Additionally, the survivor’s benefit program provides for a death benefit to be paid by the State to a retiree’s designated beneficiary. r. Deficit Fund Balances As of March 31, 2019, fund deficits were reported in the following Capital Projects Funds: the Correctional Facilities Capital Improvement Fund ($232 million); the Housing Program Fund ($177 million); the Mental Hygiene Facilities Capital Improvement Fund ($173 million); the Hazardous Waste Remedial Fund ($96 million); and Miscellaneous Capital Projects Funds, in aggregate ($46 million). The deficits related to the Capital Projects Funds are the result of differences in cash flow timing relating to the reimbursement of capital project costs and contractual commitments from bond proceeds, and are routinely resolved during subsequent fiscal years. s. Estimates The preparation of the basic financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, lia- bilities and deferred inflows of resources, and disclo- sure of contingent assets and liabilities at the date of the basic financial statements. Estimates also affect the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates. t. Adoption of New Accounting Pronouncements During the fiscal year ended March 31, 2019, the State adopted the following new accounting standards as issued by GASB: GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (GASBS 75), replaces Statements No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions , as amended, and No. 57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans , for OPEB. GASBS 75 addresses accounting and finan- cial reporting for OPEB that are provided to the employees of state and local governmental employ- ers. GASBS 75 establishes standards for recogniz- ing and measuring liabilities, deferred outflows

of resources, deferred inflows of resources, and expenses/expenditures. The State participates in the New York State Health Insurance Program, a single employer defined benefit plan. For defined benefit plans, GASBS 75 identifies the methods and assumptions that are required to be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service. The statement also establishes new note disclosures and required supplementary information related to defined benefit OPEB. The adoption of GASBS 75 resulted in restatements of beginning net position in the State’s govern- mental activities, business-type activities and dis- cretely presented component units, as of March 31, 2018 as detailed in Note 1.u, along with revi- sions to the OPEB disclosures made in Note 13. GASB Statement No. 85, Omnibus 2017 (GASBS 85), addresses practice issues identified during implementation and application of certain GASB Statements. GASBS 85 establishes accounting and financial reporting requirements for blend- ing component units when the primary govern- ment is a business-type activity, reporting amounts previously reported as goodwill and “negative” goodwill, fair value measurement and application, and timing and recognition of certain aspects of pension and OPEB transactions. The adoption of GASBS 85 did not have a significant impact on the State’s financial statements. GASB Statement No. 86, Certain Debt Extinguish- ment Issues (GASBS 86), amends Statements No. 7, Advance Refunding Resulting in Defeasance of Debt , No. 23, Accounting and Financial Reporting for Refundings of Debt Reported by Proprietary Activities , No. 53, Accounting and Financial Reporting for Deriv- ative Instruments , and No. 62, Codification of Account- ing and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronounce- ments , and No. 65, Items Previously Reported as Assets and Liabilities . GASBS 86 addresses in-substance defeasance of debt by providing guidance for transactions in which cash and other monetary assets acquired with only existing resources— resources other than the proceeds of refunding debt—are placed in an irrevocable trust for the sole purpose of extinguishing debt. GASBS 86 also addresses accounting and financial reporting for prepaid insurance on debt that is extinguished and enhances notes to financial statements for debt that is defeased in substance. The adoption of GASBS 86 did not have a significant impact on the State’s financial statements.