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MORGAN COUNTY Q UALITY WATER DISTRICT <br /> Notes to Financial Statements <br /> 1 <br /> Note A- Summary of significant accounting policies (continued) ' <br /> The District follows these procedures in establishing budgetary data reflected in the <br /> financial statements; <br /> • On or before October 15th, the budget officer submits to the board of directors a <br /> budget which shall be a complete financial plan for the ensuing fiscal year. ' <br /> • The budget is prepared using the accrual basis of accounting. <br /> • Public hearings are conducted to obtain comments. ' <br /> • Prior to December 31St, the budget is legally adopted through passage of an <br /> adoption resolution. ' <br /> Note B- Cash and investments <br /> Cash and deposits <br /> Colorado State statutes govern the District's deposit of.cash. The Public Deposit Protection <br /> Acts (PDPA) for banks and savings and loans require state regulators to certify eligible <br /> depositories for public deposits. The PDPA require eligible depositories with public deposits <br /> in excess of federal insurance levels to create a single institution collateral pool of defined <br /> eligible assets. Eligible collateral includes obligations of the United States, obligations of 111 the State of Colorado or Colorado local governments and obligations secured by first lien <br /> mortgages on real property located in the state. The pool is to be maintained by another <br /> institution or held in trust for all uninsured public deposits as a group and not held in any <br /> individual government's name. The fair value of the assets in the pool must be at least I <br /> equal to 102% of the aggregate uninsured deposits. <br /> Custodial credit risk-deposits Custodial credit risk is the risk that in the event of a bank <br /> failure, the District's deposits may not be returned to it The District does not have a I <br /> deposit policy for custodial credit risk. At year-end, the District had total deposits of <br /> $1,769,123, of which $575,201 was insured and $1,193,922 was collateralized with <br /> securities held by the pledging institution's trust department or agent in the District's I <br /> name. <br /> -18- <br />