SWCASR FINANCIAL REPORT 12-31-2001

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I SHERBURNE/WRIGHT COUNTIES CABLE COMMUNICATION COMMISSION NOTES TO FINANCIAL STATEMENTS DECEMBER 31,2001 ' Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The Sherburne/Wright Counties Cable Communication Commission(the Commission)was established under the State of Minnesota statutes, section 238.085,subdivision 5 and 471.59 as amended to monitor the operation and activities of cable communications to the members. The Commission provides coordination of administration and enforcement of one or more franchises by the members for their respective communication systems. The Commission consists of member cities located in the cities of Big Lake,Buffalo,Cokato,Dassel,Delano,Elk River,Maple Lake,Monticello,Rockford and Watertown,with each member city entitled to two Directors to represent it on the Board. Board officers include chair,vice chair,secretary and treasurer. The Commission has considered all potential units for which it is financially accountable,and other organizations for which the nature and significance of their relationship with the Commission are such that exclusion would cause the Commission's financial statements to be misleading or incomplete. The Governmental Accounting Standards Board(GASB)has set forth criteria to be considered in determining financial accountability. These criteria include appointing a voting majority of an organization's governing body,and(1)the ability of the primary government to impose its will on that organization or(2)the potential for the organization to provide specific benefits to,or impose specific financial burdens on the primary government. Blended component units, although legally separate entities are,in substance,part of the Commission's operations and so data from these units are combined with data of the primary government. The Commission does not have any component units. B. Measurement Focus,Basis of Accounting and Basis of Presentation The Commission has the following fund type: ' A Governmental fund is used to account for the Commission's activities. Governmental fund types use the flow of current fmancial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting,revenues are recognized when susceptible to accrual(i.e.,when they are "measurable and available"). "Measurable"means the amount of the transaction can be determined and ' "available"means collectible within the current period or soon enough thereafter to pay liabilities of the current period. The Commission considers all revenues available if they are collected within 60 days after year end. Expenditures are recorded when the related fund liability is incurred. i Fines,dues,licenses and interest become measurable and available when cash is received by the Commission and are recognized as revenue at that time. The preparation of financial statements in conformity with accounting principles generally accepted in the United ' States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly,actual results could differ from those estimates. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. Governmental funds include the following fund type: 1 The general fund is the Commission's primary operating fund. It accounts for all financial resources of the Commission. C. Assets,Liabilities and Equity Deposits and Investments The Commission's cash and cash equivalents are considered to be cash on hand,demand deposits and short term investments with original maturities of three months or less from the date of acquisition. Minnesota statutes authorize the Commission to invest in obligations of the U.S.Treasury,commercial paper, corporate bonds,repurchase agreements and shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are obligations guaranteed by the United States of America and its agencies. 1 -5