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tMANCOS WATER CONSERVANCY DISTRICT <br /> NOTES TO THE BASIC FINANCIAL STATEMENTS <br /> December 31, 2011 <br /> 1. Definition of Reporting Entity <br /> The Mancos Water Conservancy District (the District) and the Mancos Water Conservanc y <br /> District — Water Activity Enterprise were organized January 6, 1941 and December 10, 1993, <br /> respectively, pursuant to Colorado Revised Statutes. The District operates under a Board of <br /> Directors as appointed by the 22nd Judicial District Court of Colorado. <br /> The District's purpose is to provide for the conservation of water resources in order to ensure <br /> the greatest beneficial use of water within the District; to encourage and assist in the <br /> construction and maintenance of water projects which: (1) are for the public benefit and <br /> advantage to residents of the District, (2) provide irrigation water to agricultural lands and to <br /> deliver water from Jackson Gulch Reservoir, and from such other water sources as the District <br /> may acquire, for any beneficial use. <br /> The District follows the Governmental Accounting Standards Board (GASB) accounting <br /> pronouncements, which provide guidance for determining which governmental activities, <br /> organizations, and functions should be included within the financial reporting entity. GASB <br /> pronouncements set forth the financial accountability of a governmental organization's elected <br /> governing body as the basic criterion for including a possible component governmental <br /> organization in a primary government's legal entity. Financial accountability includes, but is not <br /> ' limited to, appointment of a voting majority of the organization's governing body, ability to <br /> impose its will on the organization, a potential for the organization to provide specific financial <br /> benefits or burdens, and fiscal dependency. <br /> 1 The District is not financially accountable for any other organization, nor is the District a <br /> component unit of any other primary governmental entity. <br /> 2. Summary of Significant Accounting Policies <br /> ' This summary of the Mancos Water Conservancy District's significant accounting policies is <br /> presented to assist the reader in interpreting the financial statements and other data in this <br /> report. The policies are considered essential and should be read in conjunction with the <br /> ' accompanying financial statements. <br /> Government-Wide and Fund Financial Statements: <br /> Basic Financial Statements: <br /> Government-wide financial statements consist of a statement of net assets and a statement of <br /> activities. These statements report all of the activities of the primary government. Neither <br /> Fiduciary Funds nor component units that are fiduciary in nature are included in the <br /> government wide financial statements. Governmental activities are reported separately from <br /> business-type activities. Governmental activities are normally supported by taxes and <br /> intergovernmental revenues whereas business-type activities are normally supported by fees <br /> and charges for services and are usually intended by management to be financially self- <br /> sustaining. <br /> The statement of activities presents a comparison between direct expenses and program <br /> revenues for the different business-type activities of the District and for each function of the <br /> 1 8 <br />