CAFR School Part 2: Minnesota’s State CAFR Explained


Welcome back to CAFR School!

Part 2 will be a more advanced look into the CAFR. In this case, the state CAFR.

This is an explanation of the State of Minnesota Comprehensive Annual Financial Report (CAFR), for fiscal year ending June 30, 2010. This is the basic set up of most state CAFR’s. Most terms are the same throughout government financial reporting.

The report can be viewed here: http://www.mmb.state.mn.us/doc/acct/2010.pdf

Or, you can download the Minnesota CAFR from the states own website, here: http://www.mmb.state.mn.us/cafr-10

(Most of my comments are in red.) – Please follow along in the Minnesota CAFR. This article will not make much sense and you wont figure out how to read these things for yourself if you don’t follow along!

And now, on with the show…

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(Page 9) – Government-Wide Net Assets as listed (not including many funds and “off-balance sheet” investments and monies, as we will discuss further).

Financial Highlights

The assets of the state exceeded liabilities at June 30, 2010, by $10.9 billion (presented as net assets). Of this amount, a deficit of $2.9 billion was reported as unrestricted net assets.

(Note that this is showing only what the Minnesota government outrageously considers liabilities. But these are inevitably future liabilities. This means they are deducting monies as liabilities for things that have not been spent/paid yet. It is a trick that makes it appear that the government is not wealthy. For perspective… If you have $2,000 in your bank account today, do you write in your checking register (your own personal CAFR) that you have already spent money that you haven’t even written a check for yet, for liabilities and future bills that you might not have to pay for until 6 months to 10 years later? No!!!) 

From the CAFR…

Unrestricted net assets represents the amount available to the state to meet ongoing obligations to citizens and creditors. However, many of the resources have internally imposed designations, such as state statutory language, which limit resource use. These assets are not reported as restricted net assets because the limitations are imposed internally by the state, not externally imposed by sources such as creditors or the constitution. For discussion on the variances from prior year, see the Government-wide Financial Analysis section.

§ The state’s total net assets decreased by $1.2 billion (9.9 percent) during fiscal year 2010. Net assets of governmental activities decreased by $761 million (7.5 percent), while net assets of the business-type activities showed a decrease of $439 million (22.6 percent). For discussion on the variances from prior year, see the Government-wide Financial Analysis section.

(So the State claims that it is in the red here by over 2 billion dollars on its “government-wide {on-balance sheet}” statements. Let’s see how many hidden “off-balance sheet” investment funds we can find…)

Fund Level

§ At the end of the current fiscal year, governmental funds reported a combined ending fund balance of $2.8 billion, a decrease of $774 million compared to the prior year. Included in the ending fund balance is a General Fund unassigned deficit of $1.5 billion. For discussion on the variances from prior year, see the State Funds Financial Analysis section.

(But what about the other funds besides these governmental funds? Let’s see…)

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(Page 7) – Fund and Component Unit Definitions:

The state’s three discretely presented major component units are:

§ Housing Finance Agency

§ Metropolitan Council

§ University of Minnesota

The state’s six nonmajor component units are combined into a single column for reporting in the fund financial statements. These nonmajor component units are:

§ Agricultural and Economic Development Board

§ National Sports Center Foundation

§ Office of Higher Education

§ Public Facilities Authority

§ Rural Finance Authority

§ Workers’ Compensation Assigned Risk Plan

(We will come back to these later…)

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State Fund and Component Unit Financial Statements (definition of a “fund”)

A fund is a grouping of related self-balancing accounts used to maintain control over resources that have been segregated for specific activities or objectives. The state of Minnesota, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Fund financial statements present financial information in a format familiar to experienced users of governmental financial statements and reports. The fund financial statements focus on individual parts of the state, reporting the state’s operations in more detail than in the government-wide statements. Fund financial statements focus on the most significant funds within the state.

(Only experienced financial experts can read these reports… or angry citizens with nothing to lose like me!)

The state’s funds are divided into three categories:

Governmental Funds

Governmental funds record most of the basic services provided by the state and account for essentially the same functions as reported in the governmental activities in the government-wide financial statements. Unlike the government-wide financial statements, the fund financial statements focus on how money flows in and out of the funds during a fiscal year and spendable resources available at the end of the fiscal year.

Governmental funds are accounted for using the modified accrual basis of accounting, which recognizes revenues when they are available and measurable. Expenditures are generally recognized in the accounting period when the fund liability is incurred, if measurable. This approach is known as the flow of current financial resources measurement focus. These statements provide a detailed short-term view of the state’s finances that assists in determining whether there are more or less resources available and whether these financial resources will be adequate to meet the current needs of the state. Governmental funds include the General, special revenue, capital project, Debt Service, and Permanent funds.

The focus of governmental funds is narrower than that of the government-wide financial statements. It is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By comparing this financial financing decisions.

The basic financial statements include a reconciliation of governmental funds to governmental activities.

These reconciliations follow the governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances.

The state maintained 29 individual governmental funds. However, six of these funds were either moved to the General Fund or combined into another fund and one fund was split and a portion of the activity was moved to the General Fund as a result of implementing Governmental Accounting Standards Board (GASB) Statement No. 54, “Fund Balance Reporting and Governmental Fund Type Definitions.”

(So these funds can used and merged in any way that these government crooks see fit.)

Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General and Federal funds, which are reported as major funds. Information from the remaining funds is combined into a single, aggregated column. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements included in this report.

(So they don’t report a major portion of the funds, investments, and wealth in the financial statements published to the taxpayers.)

The state adopts a biennial budget with annual appropriations for the majority of the activity reported in the General Fund. A budgetary comparison statement has been provided for the General Fund activity with appropriations included in the biennial budget to demonstrate compliance with this budget.

Proprietary Funds

When the state charges customers for the services it provides, whether to outside customers or to other agencies within the state, these services are generally reported in proprietary funds. Proprietary funds (enterprise and internal service) utilize accrual accounting which is the same method used by private sector businesses. Proprietary fund financial statements provide the same type of information as the government-wide financial statements, only in more detail.

Enterprise funds, a type of proprietary fund, are used to report activities that provide goods and services to outside (non-government) customers, including the general public. Internal service funds are an accounting device used to accumulate and allocate costs internally for goods and services provided by one program of the state to another. Because the activities reported by internal service funds predominantly benefit governmental functions rather than business-type functions, the internal service funds have been included within governmental activities in the government-wide financial statements.

(Enterprise funds are businesses run by the government, and citizens (the general public) are considered nothing more than outside customers!)

(Also, note that it tells us here that only certain funds, in this case the “internal service funds” are reported to the taxpayers; the general public. Make no mistake, government is a for-profit business and the people are just the customers… or chattel!) 

The state maintains 17 individual proprietary funds. The State Colleges and Universities and Unemployment Insurance funds, both of which are considered major funds, are presented separately in the proprietary funds statement of net assets and in the proprietary funds statement of revenues, expenses, and changes in net assets. Information from the 8 nonmajor enterprise funds and the 7 internal service funds are combined into two separate aggregated columns. Individual fund data for each of these nonmajor proprietary funds is provided in the form of combining statements presented in this report.

Fiduciary Funds

Fiduciary funds are used to report activities when the state acts as a trustee or fiduciary to hold resources for the benefit of parties outside the state. The accrual basis of accounting is used for fiduciary funds and is similar to the accounting used for proprietary funds. The government-wide statements exclude fiduciary fund activities and balances because these assets are restricted in purpose and cannot be used by the state to finance its operations. The state must assure that the assets reported in fiduciary funds are used for their intended purposes.

The state maintains 21 individual fiduciary funds. The state’s fiduciary funds are the pension trust funds, the investment trust funds (which account for the transactions, assets, liabilities, and fund equity of the external investment pools), and the Agency Fund (which accounts for the assets held for distribution by the state as an agent for other governmental units, other organizations, or individuals). Individual fund detail is included in the combining financial statements included in this report.

Component Units

Component units are legally separate organizations for which the state is financially accountable. The government-wide financial statements present information for the component units in a single column on the statement of net assets. Also, some information on the statement of changes in net assets is aggregated for component units. The component units’ statements of net assets and statement of changes in net assets provide detail for each major component unit and aggregate the detail for nonmajor component units. Individual nonmajor component unit detail can be found in the combining financial statements included in this report.

(Remember… there is no real law that states these funds cannot be used for anything at all, and they can be transferred or even closed at any time, and the money transferred to other funds or to who knows where!)

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(Page 66) – Investments

The State Board of Investment (SBI) manages the majority of the state‟s investments. All investments undertaken by SBI are governed by the standards codified in Minnesota Statutes, Chapters 11A and 356A. Minnesota Statutes, Section 11A.24, broadly restricts investments of the primary government to obligations and stocks of United States and Canadian governments, their agencies and registered corporations, other international securities, short-term obligations of specified high quality, restricted participation as a limited partner in venture capital, real estate, or resource equity investments, and restricted participation in registered mutual funds.

Funds not invested by SBI are primarily Minnesota State Colleges and Universities‟ funds…

SBI is authorized to establish, and has established, combined investment funds used by participating public retirement and non-retirement funds. Retirement and non-retirement funds may not be commingled. Each investment fund has its own characteristics, including investment objective and risk characteristics. Within statutory requirements and based on detailed analysis of each fund, SBI has established investment guidelines and benchmarks for all funds under its management. These investment guidelines and benchmarks are tailored to the particular needs of each fund and specify investment objectives, risk tolerance, asset allocation, investment management structure, and specific performance standards.

(Isn’t it reassuring to know that the SBI is acting within the laws that it sets for itself? Somehow that just makes this theft seem like a gift from God, doesn’t it? I mean, really, as long as the federal and state laws say that the government can steel trillions and trillions of dollars from the taxpayers without any real public disclosure and then hide that money in these funds, all seems right with the world…)

(Note: This is sarcasm. God wouldn’t like this very much, me thinks.)

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(Page 66) – Synthetic Guaranteed Investment Contract (SGIC): 

State Board of Investment (SBI) maintains a fully benefit-responsive SGIC for the Supplemental Investment Pool – Fixed Interest Account of the Pension Trust and Investment Trust Funds portfolio. The investment objective of the Fixed Interest Account is to protect investors in defined contribution and deferred compensation plans from loss of their original investment and to provide a competitive interest rate. On June 30, 2010, the SGIC had a portfolio of well diversified high quality investment grade fixed income securities with a fair value of $747,887,000 that is $37,692,000 in excess of the value protected by the wrap contract. The Fixed Income Account also includes a liquid investment pool and a guaranteed investment contract with fair values of $214,955,000 and $326,545,000, respectively.  (Total = $1,289,387,000)

(Note: The author (me) is not sure if this is above and beyond what the state has reported in its Pension Fund Totals, so we won’t include this in our final total of this CAFR wealth. We’ll give it an honorable mention though, for sure! Wouldn’t want to double-count…)

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(Page 80 – 82) – Note 5 – Interfund Transactions 

Primary Government

During normal operations, the state processes routine transactions between funds, including loans, expenditures, and transfers of resources for administrative and program services, debt service, and compliance with legal mandates. In the fund financial statements, these transactions are generally recorded as transfers in/transfers out and interfund receivables/payables. Transfers generally represent legally authorized transfers between funds authorized to receive revenue and funds authorized to make expenditures, and do not represent reimbursement of expenditures.

(So monies/investments are allowed to be moved around between funds. They say again here that the –law- says it’s OK to do this. So the question we should be asking our supposedly representative government is… Why don’t you “authorize” or change the legalities (not laws) so that this investment wealth can be used for the benefit of “We, the People” instead of you greedy bankers, attorneys, and politicians? I think that’s a fair question…)

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(Now we will list these funds out, and show where the real money is invested…)

(Note: All figures listed in this CAFR are “in thousands”, meaning I have added 3 zeros {,000} to all totals.)

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(Page 31)“Major Governmental Funds” descriptions:

–General Fund – the fund accounts for all financial resources except those required to be accounted for in another fund.

–Federal Fund – The fund receives and disburses federal government grants and reimbursements. The fund is administered in accordance with grant agreements between the state and federal agencies.

(page 32) – Total for the General fund as listed on the “GOVERNMENTAL FUNDS BALANCE SHEET” is $3,916,496,000 as of June 30,2010.

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(Note: Remember the Statement of Net Assets from above? It stated that, “Included in the ending fund balance is a General Fund unassigned deficit of $1.5 billion”. And yet here we see the actual balance in the fund is over $3.9 billion!!!)

(The Statement of Net Assets also claimed that, “At the end of the current fiscal year, governmental funds reported a combining ending fund balance of $2.8 billion, a decrease of $744 million compared to the prior year”. Obviously, this is a lie, as the balance of just the General Fund is again 3.9 billion!!!)

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(page 32) – Total for the Federal fund as listed on the “GOVERNMENTAL FUNDS BALANCE SHEET” is $1,579,194,000 as of June 30,2010.

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Note that while “Nonmajor Funds” are listed here too, we will be covering those funds individually in a moment…

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(Page 37) – “Major Proprietary Funds” descriptions:

State Colleges and Universities Fund – The fund accounts for the activities of Minnesota State Colleges and Universities (MnSCU). MnSCU is a system of public state universities and two-year colleges and is the largest system of higher education in the state. While the primary activity of MnSCU is to provide educational services, the fund also includes scholarships, student loans, bookstores, student living activities, research, and long-term debt.

Unemployment Insurance Fund – The fund receives unemployment taxes collected from employers and pays unemployment benefits to eligible individuals.

(Page 39) – Total for the State Colleges and Universities Fund as listed on the “STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS” is $1,723,766,000 as of June 30,2010.

(Page 39) – Total for the Unemployment Insurance Fund as listed on the “STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS” is at a negative – $266,135,000 as of June 30,2010.

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Note that while “Nonmajor Enterprise Funds” and “Internal Service Funds” are listed here too, we will be covering those funds individually in a moment…

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(Page 47)“Major Component Unit Funds” descriptions:

Housing Finance Agency – The agency provides money for loans and technical assistance for construction and rehabilitation of housing for families of low and moderate incomes.

Metropolitan Council – The council is responsible for coordinating the planning and development of the Twin Cities metropolitan area. The council also operates the metropolitan regional sewage treatment and disposal systems and the public transit system. The Metropolitan Sports Facilities Commission, a component unit of the council, operates the Hubert H. Humphrey Metrodome sports facility. 

University of Minnesota – The multi-campus university provides undergraduate and graduate degrees, advanced research opportunities, and an extension service. The university includes several nonprofit foundations that provide resources which benefit the university.

(Note that these are the funds held by these government for-profit businesses (component units) and are NOT referring to the actual buildings, equipment, or other real assets associated with them. These are stating totals for cash and liquid investments.)

(Page 48) – Total for the Housing Finance Agency Fund as listed on the “STATEMENT OF NET ASSETS” is $1,723,766,000 as of June 30,2010.

(Page 48) – Total for the Metropolitan Council Fund as listed on the “STATEMENT OF NET ASSETS” is $1,872,301,000 as of June 30,2010.

(Page 48) – Total for the University of Minnesota Fund as listed on the “STATEMENT OF NET ASSETS” is $4,785,350,000 as of June 30,2010.

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Note that while “Nonmajor Component Unit Funds”  are listed here too, we will be covering those funds individually in a moment…

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(Page 125 – 127) – Risk Management Fund – Read this for an explanation of Self-Insurance. This is a fund built to pay for any lawsuits or torts brought against the state or its component units. This is the hoarding and investing of taxpayer dollars. So if you sue the state, you will be receiving taxpayer money or the return on this money from investments in this fund. (Total for this fund presented later as a Nonmajor Enterprise Fund.)

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 (Page 131)Budgetary Basis vs. GAAP explanation:

Actual revenues, transfers-in, expenditures, encumbrances, and transfers-out on the budgetary basis do not equal those on the GAAP basis in the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances for the General Fund. This inequality results primarily from the differences in the recognition of accruals, reimbursements, deferred revenue, intrafund transactions, and loan classifications, and from the budgetary basis of accounting for encumbrances. On the budgetary basis, encumbrances are recognized as expenditures in the year encumbered. The modified accrual basis of accounting recognizes expenditures when the goods or services are received, regardless of the year funds are encumbered. A reconciliation of the fund balances under the two basis of accounting for the General Fund is provided in the following table.

(Translation: Some government money and investments are not reported on the taxpayer budget, nor in the Statement of Net Assets we listed above on page 9. There are two different ways of financial reporting, one for the dumbed down masses who can barely balance their checkbook, and one for the elite power brokers in government and the corporate world.)

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(Page 142) – Actuarial Measures of Pension Funding Progress

The state of Minnesota is the employer for five defined benefit single employer plans that are administered by Minnesota State Retirement System (MSRS). MSRS prepares and publishes its own stand-alone comprehensive annual financial report (see Note 1 – Summary of Significant Accounting and Reporting Policies for the address).

(Note: When we look at the separate Pension Fund CAFR we see that the “employer” defined here as the State of Minnesota contributes/matches employee contributions to the pension fund system. So the state puts billions of taxpayer money (the state is supported by taxpayer money) into the pension fund for investment with no benefit for the taxpayers.)

The Elective State Officers Fund (ESOF) is excluded from the single employer plan disclosures since this plan is closed to new entrants and any former active employees have retired, terminated, or elected coverage under another plan.

Required supplementary information of funding progress is provided for the following plans:

§ Correctional Employees Retirement Fund (CERF)

§ Judicial Retirement Fund (JRF)

§ Legislative Retirement Fund LRF)

§ State Patrol Retirement Fund (SPRF)

 

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(Page 147 – 151) – Combining and Individual Fund Statements – Nonmajor Funds

Nonmajor Special Revenue, Debt Service, Permanent and Capital Projects Funds

(Page 151 – Chart) – COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

(Note that these are reported “in thousands”, meaning we must add three zero’s {,ooo} to the end of each figure. These are the supposed totals for all the funds included in these categories.)

SPECIAL REVENUE       

-> $1,975,916,000

DEBT SERVICE

-> $764,447,000

PERMANENT SCHOOL

-> $694,452,000

CAPITAL PROJECTS

-> $205,002,000

TOTAL

-> $3,639,817,000

.

(Note that {in thousands} the “Net Change in Fund Balances” column (fourth row from bottom of graph) shows profits/increases of  – $122,913,000 – $22,378,000 – $64,229,000 – and $108,739,000 – with the total profit for these funds listed at $318,259,000. This is how much money was added to these funds in fiscal year 2010 over fiscal year 2009)

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(Page 152 – 153)gives a description of each “Special Revenue Fund”

Note the difference between the totals of the chart on (page 154 – 157)NONMAJOR SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET”…

and the chart on (page 158 – 161)COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES”

On the “COMBINING BALANCE SHEET” we can see that total fund balances are actually in the amount of $2,719,861,000… a difference of over $700,000,000 as compared to what is reported on the “COMBINING STATEMENT” chart.

(Always go with the higher figure, as again they are attaching future liabilities to the money they have today.)

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(Page 169)gives a description of each “Capital Project Fund”

“COMBINING BALANCE SHEET” totals – $253,749,000

“COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES” totals – $205,002,000

So we can add almost $50 million to the total listed, taking the highest figure without “future obligations”. 

(This is the actual holdings at the time of this report.)

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(Page 169)gives a description of each “Nonmajor Enterprise Fund”

(Note that this is a new set of funds, not listed above, and including…)

Behavioral Services Fund

Enterprise Activities Fund

Giants Ridge Fund

Minnesota Correctional Industries Fund

911 Services Fund

Public Employees Insurance Fund

State Lottery Fund

State Operated Community Services Fund

 .

(Page 174 – 175) The “COMBINING STATEMENT OF NET ASSETS” {in thousands} chart shows $45,315,000 in these funds under the Totals column. So we can add that to our hidden wealth totals…

(Page 181)gives a description of each Nonmajor Internal Service Fund, which includes the “Risk Management Fund” that we covered above as a self-insurance fund.

(Page 182 – 183) The “COMBINING STATEMENT OF NET ASSETS” {in thousands} chart shows $320,436,000 in total fund balances, which in this case is the same as the COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS chart.

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PENSION TRUST FUNDS!!! – (Remember, Pension Funds are where the government diverts billions (trillions nationally) of taxpayer money, not just employee money.)

(Page 188 – 189) Minnesota State Retirement System includes… 

–Correctional Employees Retirement Fund

–Elective State Officers Fund

–Hennepin County Supplemental Retirement Fund

–Judicial Retirement Fund

–Legislative Retirement Fund

–Postretirement Health Care Benefits Fund

–State Deferred Compensation Fund

–State Employees Retirement Fund

–State Patrol Retirement Fund 

–Unclassified Employees Retirement Fund 

 .

The Public Employees Retirement Association includes…

–Defined Contribution Fund 

–Minneapolis Employees Retirement Fund 

–Police and Fire Fund 

–Public Employees Correctional Fund

–Public Employees Retirement Fund

–Volunteer Firefighter Retirement Fund

 .

The Teachers Retirement Association includes…

–Teachers Retirement Fund

.

The State Colleges and Universities includes…

–Colleges and Universities Retirement Fund

 .

(Again, these funds where not included above.)

(Page 190 – 193) COMBINING STATEMENT OF NET ASSETS shows totals for these pension funds listed at $45,746,335,000.

(Page 197) This represents an increase (profit) in the fund balances over 2009 of at least $4,336,688,000.

(Yes, yes… these are the retirement funds and they are designated for the employees. We can’t touch those, right? Again, this fund represents billions and billions of dollars of taxpayer money, and the investment return on these fund’s collective investments. This total shown represents the money and investments in the fund AFTER all liabilities to the employees are paid, and after future liabilities are considered. So you tell me whose money this really is… and before you answer that, consider the fact that at any time the President of the United States can create an Executive Order that states that all collective fund balances in the government pension funds are now the property of the Federal Government. If we don’t reclaim this through strict regulation and anti-federal shields in the name of the people and soon, it will be gone with the stroke of a pen. And all of these state employees who are so defensive of their pension funds now will have nothing left to defend. It will all be gone!)

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(Page 199)INVESTMENT TRUST FUNDS”

Supplemental Retirement Fund – The fund provides an investment vehicle for the assets of various public retirement plans and funds.

Investment Trust Fund – The fund provides an investment vehicle for external funds authorized to be invested by the state.

(Page 201) “STATEMENT OF CHANGES IN PLAN NET ASSETS” shows totals for these funds at $482,714,000. 

This is an increase of $30,835,000 over fiscal year 2009, as listed under “Net Increase”.

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(Page 203)Agency Funds” description

Agency Fund – This fund accounts for resources held in a custodial capacity for other governmental units, private organizations, or individuals.

Totals listed at $124,220,000

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(Page 205)“Nonmajor Component Unit Funds” descriptions…

(Note that this is not the value of the buildings, equipment, and other hard assets involved with these component units {state-run businesses}, these are the funds that each unit has in investment holdings in (liquid) assets and cash.)

Agricultural and Economic Development Board 

National Sports Center Foundation 

Office of Higher Education

Public Facilities Authority

Rural Finance Authority

Workers’ Compensation Assigned Risk Plan

.

(Page 206 – 207) The “COMBINING STATEMENT OF NET ASSETS” states that the totals for these funds are at $1,488,337,000

(Page 209) “Change in Net Assets” show and increase to these funds of $97,359,000 over fiscal year 2009.

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Last but not least, we have…

(Page 83) – Note 6 – Capital Assets:

Primary Government

The following table shows capital asset activity for the primary government:

(Page 83) – See Chart here entitled“Primary Government Capital Asset Activity Government-wide Governmental Activities”

This is the value stated after depriciation for the following “capital assets”, which represents the physical equity in the following:

Land – Buildings, Structures, Improvements – Construction in Progress – Development in Progress – Infrastructure – Easements – Art and Historical Treasures

Total value listed here for these Capital Assets are $11,982,234,000

(Note: that these are not necessarily salable or liquidate-able assets, and so we will not include them in our total below, which will only represent fund, investment, and cash on hand as of June 30, 2010.)

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END OF REPORT

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So let’s total up what we have found in the Minnesota CAFR, and compare that total to what the state is reporting to its taxpaying citizens on the taxpayer budget report…

General fund                                                    $3,916,496,000 

Federal fund                                                     $1,579,194,000 

State Colleges and Universities Fund     $1,723,766,000

Unemployment Insurance Fund             (- $266,135,000)

Housing Finance Agency Fund                 $1,723,766,000 

Metropolitan Council Fund                       $1,872,301,000 

University of Minnesota Fund                 $4,785,350,000

Special Revenue Funds                               $2,719,861,000

Capital Projects Funds                                   $253,749,000

Enterprise Funds                                             $320,436,000

Pension Trust Funds                                 $45,746,335,000

Investment Trust Funds                                 $482,714,000

Agency Funds                                                     $124,220,000

Nonmajor Component Unit Funds        $1,488,337,000

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TOTAL FUND BALANCES…                   $66,470,390,000

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Again, this is a look at the fund balances for the state, and should not be construed as a total look at what this CAFR has to offer in the form of hidden wealth and investments for Minnesota. It would take a guru of an accountant to figure all of this out…

But I think that we have proven without a doubt that the Minnesota state government is guilty of misrepresentation of its wealth to the taxpaying public when it releases its tax-payer budget every year, and when it states in its “government-wide statement of Net Assets” that it only has $10,865,096,000 in “Total Net Assets” including Capital Assets (chart on page 10).

This financial statement (CAFR) structure will look very similar on most state CAFR’s. The order may different, but the terms and fund group types will be virtually identical. You may have to look for this information, but a bit of logic and reason should get you through. The most difficult thing to succeed at is to push aside all of the redundant and pointless information and graphs in lieu of the real hidden gold.

For more information on the corporate government CAFR system, please visit these sites:

http://thecorporationnation.com/

http://cafr1.com/

http://cafrman.com/

http://taxretirement.com/

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Happy treasure hunting to you and yours…

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–Clint Richardson (realitybloger.wordpress.com)

Wednesday, March 9th, 2011

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26 Comments

  1. One Note: The word play government uses is the difference between total (or gross) and the use of the word “Net”

    EXAMPLE: A squirrel collects 4,000 egg-corns. The squirrel figures he will eat 3,800 egg-corns over the winter so the squirrel records that it has 200 egg-corns Net.

    Let’s take this a step further. The squirrel really is a pig in a squirrel coat. It now says it will eat 4,800 egg-corns over the winter so now it states: “I am 800 egg-corns short;underfunded; negative;, I will not survive the winter. I must pass laws to take egg-corns from other squirrels to survive the winter. (Better hope those other squirrels are not armed and know how to use it)

    We all know the story of the Wolf in Sheep’s clothing, this has been the story of the Pig in Squirrel’s clothing.

    Reply
  2. PS: Clint, tackle a big state like Florida, Texas, or California.

    Now if you want a real challenge go after one of the organized crime states like New Jersey of Massachusetts now run by the 95% thieving attorneys that have dotted the “I”s and crossed the “T”s to make it all so much easier to take it all giving the impression they are just getting by while bringing in more money than Midas ever dreamed about.

    One tactic they use is having re-designated (masked)themselves as a “Common Wealth” which changes by self design their accounting requirements into separate layers.

    Reply
    • If someone wishes to come forward and support my efforts, I’d be happy to expose these things all day!!!

      Unfortunately, the wealthier people are, the less they want to give away, and the less they want to know about who they hurt to achieve that wealthy status.

      I challenge everyone out there to put me and Walter Burien on a payroll and set us loose! The powers that be wouldn’t know what hit ’em!

      -Clint-

      Reply
  3. Randy Johnson

     /  March 10, 2011

    You have got to do a report on Illinois! Please. Land of corruption.

    Reply
  4. Marika

     /  March 10, 2011

    Hey Clint,

    would you please take a look at our local school CAFR?
    I see lot of surplus (or at least that’s what I think it is), but there is also many red ink so I wonder if that will break them even.

    I tried to follow your example during the “treasure hunt”.

    2010 CAFR
    http://www.vtsd.com/docs/audit/FY2010_audit.pdf

    2009 CAFR
    http://www.vtsd.com/docs/audit/FY2009_audit.pdf

    and…please, look into shovio.com technology and lets kick this CAFR movement nation wide. LawlessAmerica had their first debut two weeks ago with more than 900 viewers on a first day. It also hit #1 on the same day on Shovio.
    (Lawless America runs every Sunday 5-7EST on shovio.com

    Reply
  5. Marika

     /  March 10, 2011

    Oh yeah…and I am from the Corrupted State of New Jersey.

    Reply
    • Marika:

      You should let the readers know how much you and your neighbors pay in property tax each year so their jaws can hit the floor. I have a friend in Cranford, NJ with a 150K house who pays $8,000 per year. The street I grew up on in East Brunswick, NJ, Yorktown Rd. the houses there get hit with $14,000 to $21,000 a year. But those of you that live west of the Mississippi and east of California who have much lower property tax rates, don’t worry the syndicate will take over your homes soon to even out the take.

      You see in history it is all a matter of time before things equal out. Equality for one and all!

      Stupidity is bringing a knife to a gun fight. (the streets)

      Real stupidity is bringing paper to a gun fight. (the courts)

      Insanity is doing the same thing over and over again and expecting different results. (paying taxes)

      Reply
  6. Ed Lewis

     /  March 10, 2011

    Sir:

    I am wondering if you might go through the Missouri CAFR? I want to learn how to figure out the material but, and I hate to say it, my degree of concentration has diminished greatly in the last few years (I am 65).

    I believe I could use it to go through COUNTY and CITY annual reports so it would be greatly appreciated.

    My respects,

    ed lewis

    Reply
  7. Ed Lewis:

    I just thought I would mention the fact that millions of dollars are spent each year on the production of a State CAFR.

    You mention your degree of concentration can’t get the job done so what is the point if you can not turn the screws in to get the chair to stand.

    You may want to find a good friend or business associate in your home town to get interested and then start a CAFR review club with 5 to 15 people (you may just find that 40 to 60 want to join).

    Should be a few sharp cookies you can find locally with great attention spans. Then your groups findings can be dispersed throughout the community.

    In doing this you can rely on your charming personality, wit, and decades of intelligence built. A weakening attention span won’t be a detriment in getting that venture underway :<) so no excuses.

    Don't forget to look at your school district and government pension fund CAFRs also.

    On a last note: Here is for your neighbor state of Illinois, a 2003 CAFR review Gerald Klatt did the year before he died. It is informative. The actual line item review is about 2/3rds down the page. The figures are in thousands so add 3 zeros to each line item figure. He did not do Missouri but the same outline would apply. http://cafrman.com/Articles/Art-IL-S1.htm

    LAST NOTE: Billions are spent each year to prepare the 184,000 or so local government CAFRs or AFRs each year. Has ONE (1) person from the inside over the last 75 years brought forward ONE (1) surplus review of a CAFR let alone simple mention of it in a conspicuous manner? When all of us can grasp the cognitive thought behind the answer to that question and the reasons why, we all will jump out of diapers into grade school.. (HINT TO THE ANSWER: Due to the money involved)

    Reply
  8. Clint, THANKS for your stellar contributions! I’ve been emailing Congress, the national & local media, many websites, etc (and my own Arizona State, County and City elected officials) since 2000, giving them Burien’s (and then Klatt’s) data. Just a few responses. Same with your Wisconsin CAFR analysis. NOW will send them all your latest on Minnesota! Eventually SOME of these (still decent) people will wake up! (I hope.)
    – Dick Fojut in Tucson, Arizona

    Reply
  9. Robert M

     /  March 10, 2011

    I wish he would tackle Maryland, so I can send it to O’Malley and shut HIM up. I’m getting tired of his crying poor-mouth.

    He’s lying about a MD shortfall all the while he’s sitting on billions of CAFR funds.

    Help here, Clint!!

    Reply
    • I’m trying! Why not try this yourself? That’s the point of these CAFR school posts!!!

      -Clint-

      Reply
      • Robert M

         /  March 10, 2011

        Thanks Clint, but I an MECHANICALLY incline and NOT mathematically inclined and I have a 60s HS education, won the county spelling bee, etc., but I hate math and cannot keep a thought on it from one minute to the next, without my train of thought de-railing.

        Bob

        Reply
  10. Jordan

     /  March 10, 2011

    Liabilities?

    Let’s see if I have this right,

    I am able to write off my yearly business expenses (liabilities) against my income, so in terms of the way government does it’s business, I will be able to write off next years projected expenses (liabilities) as well. Great idea, IRS ought the love this one. Maybe I’ll start writing off that new car I will be buying next November too?😦

    Reply
    • Now you are getting it!

      Walter Burien’s squirrel story above in the comments is a simplistic way of looking at this. I recommend it.

      -Clint-

      Reply
  11. Robert M

     /  March 10, 2011

    When you and Walt get to MD, Clint, I will be glad to donate whatever I can to your “payroll.”

    As you know, SS doesn’t pay much, especially since the thieves in the Dismal Swamp decided not to give us our COLA for the last 2 years, and are geared up to do the same in 2012.

    I’ve been on disability for over 15 years and now those bastards want to chop me off at the knees, with a whole lot of other deserving people. If they took the druggies, drunks, illegals and other scammers off the rolls, the SS COLAs could be afforded, with surpluses. But we all know the crooks aren’t about to let that happen. They’re losing millions ov votes now, so I know they’ll steer clear of their duty in that vein.

    Reply
  12. Hello, appreciate your exposing Walter and his efforts to educate any on the CAFR subject. It was interesting to discover the system was well intrenched
    in Canada. To find most intellectuals north of the 49th in denial once treated to the accounting of
    there local CAFR, was disheartening. The Zionist control of our political system is now total with common sense in the history bin.
    Cheers for a excellent expose. L

    Reply
  13. S.Childs.

     /  March 10, 2011

    The problem, as pointed out by the renowned Gerald Klatt, is that we are not dealing with a report that is a picture taken of what happened in actual time, but combines the actual with what might be to tell us what to expect “now”. There are a growing number of financial helps in the “private” sector who have ATTEMPTED to sort out the total ambiguity of “annual reports.” But the vast world of corporate governance analysis is virtually untouched. The last truly comprehensive and objective being the late Mr. Klatt. (www.cafrman.com) And the way he did this was to stick with the cash basis of analysis. He shows you how to keep what IS separate from what MIGHT BE.

    Why is this important?

    Because the confusion and intended “comprehension” is the gap (or GAAP) created between what IS a logical Cash basis of what IS gross/net, WITH the applied Accrual basis of what MIGHT BE gross/net. That GAAP (Generally Accepted Accounting Principals) for corporate governance IS (what MIGHT BE) the Modified Accrual basis where what MIGHT BE IS determined by what IS to be what MIGHT BE.

    Cash basis IS: (the Thesis)
    Gross–what IS the total BEFORE expenses.
    Net–what IS the total AFTER expenses.

    Accrual basis MIGHT BE: (the Antithesis)
    GROSS–what MIGHT BE the total BEFORE expenses.
    NET–what MIGHT BE the total AFTER expenses.

    Modified Accrual IS what MIGHT BE: (Synthesis)
    GROSS–IS what MIGHT BE the total BEFORE expenses.
    NET–MIGHT BE what IS the total AFTER expenses.

    Put into simpler terms (like plucking a chicken on a bouncing bungee chord):

    The Actual Basis of what I weigh with all my clothes on is my gross weight. If you want to know what I really weigh (without clothes I actually have on) you get my net weight. Chicken is…

    The Accrued Basis of what I weigh might be what I hope to wear as my possible gross weight. If you want to know what I might weigh (without clothes that I might wear) you get a totally different net weight. This is where it gets into the intangible.
    Chicken is bouncing…

    But…the Modified Accrual Basis uses my combined (gross) weight to determine what I actually might wear, while what I might actually wear determines the (net) weight I would like to be.
    Pluck a bouncing Chicken…

    If you are confused, that is exactly the “gap” they are hoping for: a margin and power of DISCRETION that separates us from our wealth. Although the motivation for change might be found in the above numbers (however great or small), the REAL change comes when we understand the mechanism of gears behind this terrible grind and demand that it be stopped. DEMAND TO SEE THE STATUTES IN CODE THAT SUPPOSEDLY DETERMINE THE WHAT IS OF UNRESTRICTED AND MIGHT BE RESTRICTED USE OF DISCRETIONARY FUNDS.

    Reply
    • Well said, my friend… Thank you.

      I’m off to get a bungee chord and see if I can figure this out! Here chicky chicky…

      Reply
  14. Ed Lewis

     /  March 11, 2011

    Thanks.

    Reply
  15. April

     /  March 17, 2011

    Hi Clint,
    I hope all is well with you.
    Your CAFR School is GREAT!

    I also wanted to mention that Walter Burien has a bit of software called “CAFRMan’s Review Program” on his site which I have utilized and found it to be a very helpful tool.
    Folks can get it here: http://cafr1.com/Files/ZipCAFR.ZIP

    Keep up the great work Clint! I look foward to speaking with you again.

    Sincerely,
    April

    Reply
  16. Sidney Smith

     /  March 29, 2011

    Joint Resolution National Economic Security and Reformation Act signed Congress March 09, 2000, and into Law by President Clinton Oct. 10, 2000, WTC held the computer that would make the announcement and implementation NESARA law 9-11-2001 at 10:00am est and the world knows what happen at 9:00am this prevented the announcementand implementation of the National Economic Security and reformation Act obstruction of Justice.

    Reply
  17. Sidney Smith

     /  March 29, 2011

    Joint Resolution National Economic Security and Reformation Act signed Congress March 09, 2000, and into Law by President Clinton Oct. 10, 2000, major reformation of the united States and the United States of America remove lawyers, Federal reserve bank, corporations from the Govermnets Inc. restored the orginal 13th Amendment of march 09, 1819 back to the people. internet see nesara for more information

    Reply
  1. CAFR Confession « REALITY BLOG

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