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Appendix A -2 <br />AUDITORS REPORT <br />ARKANSAS RIVER COMPACT ADMINISTRATION <br />NOTES TO CASH BASIS STATEMENTS <br />JUNE 30, 1989 <br />Note 1 - Summary of significant accounting policies: <br />a. The Administration maintains financial records <br />using the cash basis of accounting. By using <br />the cash basis of accounting, certain key <br />accounts needed to present financial position <br />and results of operations are omitted; examples <br />of these accounts are accounts receivable and <br />accounts payable. <br />5 <br />34 ARCA 1989 <br />