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ST. PETERS HUMAN SERVICES , INCORPORATED <br /> (A Component Unit of the Indian River County District School Board) <br /> Notes to Basic Financial Statements <br /> (e) Budgets and Budgetary Accounting <br /> The Academy annually adopts a budget for all governmental funds . Budgets are presented <br /> on the modified accrual basis of accounting . All budget amounts presented in the <br /> accompanying supplementary information reflect the original budget and the amended <br /> budget, which has been adjusted for authorized revisions during the year. <br /> (� Encumbrances <br /> Encumbrances, if any , outstanding at year-end represent the estimated amount of <br /> expenditures to result if unperformed purchase orders and other commitments at year-end <br /> are completed. The Academy generally intends to honor purchase orders and other <br /> commitments in process . As a result, encumbrances outstanding at year-end are reported <br /> as reservations of fund balances since they do not constitute expenditures or liabilities . <br /> (g) Cash <br /> The Academy ' s cash consists of demand deposits with financial institutions , which are <br /> insured by Federal depository insurance . As of June 30 , 2002 , uncollateralized and <br /> uninsured deposits in the Academy ' s cash accounts that exceeded Federal deposit <br /> insurance amounted to $ 333 , 707 . <br /> (h) Capital Assets <br /> Property and equipment purchased are recorded at historical cost. Contributed property <br /> and equipment are recorded at the fair market value at the time received . The Academy ' s <br /> capitalization level is $ 750 . Other costs incurred for repair and maintenance are expensed <br /> as incurred . Depreciation on all assets is recorded in the Academy-Wide financial <br /> statements only and is provided on a straight-line basis over the following estimated useful <br /> lives : <br /> Years <br /> Improvements other than buildings 10 - 20 <br /> Buildings and improvements 10 - 40 <br /> Furniture , fixtures, and equipment 5 - 10 <br /> Computer software 3 <br /> (i) Compensated Absences <br /> Compensated absences for vacation, sick, and other personal leave are provided for all <br /> regular, full-time employees . An employee may accrue leave based on the number of <br /> years served. However, employees are not entitled to cash payment in lieu of taking leave <br /> or upon termination. Compensated absences are recorded as expenditures when leave is <br /> used and no liability for compensated absences is reflected in the financial statements . <br /> (Continued) <br /> 20 <br />