NOTE 15. Reconciliation of Net Cost of Operations to Budget

Most entity transactions are recorded in both budgetary and proprietary accounts. However, because different accounting bases are used for budgetary and proprietary accounting, some transactions may appear in only one set of accounts. The following reconciliation provides a means to identify the relationships and differences that exist between the aforementioned budgetary and proprietary accounts.

The reconciliation of net cost of operations to budget for the years ended September 30, 2007 and 2006, is as follows:

Reconciliation of Net Cost of Operations to Budget For the years ended September 30, 2007 and 2006 (Dollars in Thousands)   2007 2006 RESOURCES USED TO FINANCE ACTIVITIES     Budgetary Resources Obligated:     Obligations Incurred $1,766,424  $1,674,441  Spending Authority from Offsetting Collections and Recoveries (1,800,959) (1,674,529) Net Obligations    (34,535)        (88) Total Resources Used to Finance Activities    (34,535)        (88) RESOURCES USED TO FINANCE ITEMS NOT PART OF THE NET COST OF OPERATIONS     Change in Budgetary Resources Obligated for Goods, Services and Benefits Ordered but not yet Provided     40,204    (141,315) Resources that Fund Costs Recognized in Prior Periods     (1,378)         — Budgetary Offsetting Collections that do not Affect Net Cost of Operations     55,277      69,531  Resources that Finance the Acquisition of Assets Capitalized on the Balance Sheet   (101,773)    (70,001) Total Resources Used to Finance Items not Part of the Net Cost of Operations     (7,670)   (141,785) COMPONENTS OF NET COST OF OPERATIONS THAT WILL NOT REQUIRE OR GENERATE RESOURCES IN THE CURRENT PERIOD     Components Requiring or Generating Resources in Future Periods:     Costs that will be Funded by Resources in Future Periods     14,468       7,580  Net (Increase)/Decrease in Revenue Receivables not Generating Resources until Collected        (75)         80  Total Components of Net Cost of Operations that will Require or Generate Resources in Future Periods     14,393       7,660  Components not Requiring or Generating Resources:     Depreciation, Amortization, or Loss on Asset Dispositions     61,734      53,864  Other Costs that will not Require Resources         30          81  Total Components of Net Cost of Operations that will not Require or Generate Resources     61,764      53,945  Total Components of Net Cost of Operations that will not Require or Generate Resources in the Current Period     76,157      61,605  Net Cost /(Income) from Operations $   33,952  $  (80,268)

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