RD114 - Report of Off-Balance Sheet Financial Obligations as of June 30, 2007


Executive Summary:
Purpose: During the 2007 General Assembly Session, legislation was passed (Code of Virginia, §2.2-813.2) requiring the State Comptroller to report off-balance sheet financial obligations of the Commonwealth. For purposes of this report, the balance sheet is defined as the Comprehensive Annual Financial Report (CAFR). The CAFR is prepared in accordance with Generally Accepted Accounting Principles (GAAP) and includes both financial statements and notes to the financial statements, both of which contain information concerning the Commonwealth’s financial obligations. The CAFR is available on the Department of Account’s webpage at http://www.doa.virginia.gov/Financial_Reporting/CAFR/CAFR_Main.cfm. The CAFR amounts reflected below include state agencies, institutions and component units. The component unit amounts exclude Higher Education foundations.

On-Balance Sheet Financial Obligations Defined: In order for the report of off-balance sheet financial obligations to provide meaningful information, it is important for readers to understand the extensive amount of information concerning the Commonwealth’s financial obligations already reported on-balance sheet. Some of the more clearly understood of these on-balance sheet financial obligations include the following:

Bonded debt ($17.6 billion)
Accounts payable ($1.8 billion)
Tax refunds payable ($294.4 million)

Other on-balance sheet financial obligations that may be less well-understood include the following:

Unfunded pension costs ($1.1 billion)
Capital lease obligations ($249.8 million)
Compensated absences ($569.6 million)
Medicaid payable ($382.9 million)
Higher education construction commitments ($691.5 million)
Highway project commitments ($1.4 billion)
Mass Transit project commitments ($141.7 million)
Information Technology Infrastructure Partnership ($1.9 billion)
Car tax refund payable ($263.0 million)
Tuition benefits payable ($1.7 billion)
Lottery prizes ($313.1 million)
Operating leases ($574.3 million)
Installment purchases ($188.9 million)

Comprehensive information concerning these on-balance sheet financial obligations are reported in the CAFR.