Item 9 Preliminary Official Statment Dated February 25, 1994

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NOTES TO THE FINANCIAL STATEMENTS (Continued) geographic boundaries of the City of Santa Ana. Each of the above related agencies has an independently- elected board of directors, and maintains its own records and accounts. Since these agencies are substantially self-governing and are not financially dependent on the City, financial statements of these agencies are not included within the scope of this financial report. Accounting and Reporting Policies. For reporting purposes, the City has adopted all effective Statements of the Governmental Accounting Standards Board (GASB), one of which established the authoritative status of the pronouncements of its predecessor - the National Council on Governmental Accounting (NCGA) and of the accounting and financial reporting guidance contained in the Industry Audit Guide, Audits of State and Local Governmental Units, issued by the American Institute of Certified Public Accountants. Through widespread acceptance, pronouncements of the GASB, the NCGA, and the Industry Audit Guide have long been acknowledged as the primary authoritative statements of Generally Accepted Accounting Principles (GAAP) applicable to state and local governments. Interagency Current Receivables. Pavables and Long-Term Debt. For reporting purposes, the City considers interagency long-term loans to be operating transfers. Accordingly, "loans receivable" are classified as "transfers out"while "loans payable" are classified as "transfers in". Interest on such loans are recorded only when due. Loan amounts, including interest, are noted in the footnotes to this report. When these loans are repaid, such transactions are also recorded as "transfers out" (typically from the Debt Service Fund) and "transfers in,"and the loan balance is reduced in the footnotes. Interagency current receivables and payables are classified as accounts "due from" and "due to" other funds. (See Note 3B.) Total Columns. Total columns on the combined statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present consolidated financial information. 1B. Basis of Presentation - Fund Accounting The accounts of the City of Santa Ana are organized on the basis of funds and account groups each of which is considered a separate accounting entity with a self-balancing set of accounts. The types of funds and account groups used are: Governmental Fund Types General Fund. The General Fund is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds. The Special Revenue Funds are used to account for the pp-west's of special revenue sources that are restricted by law or administrative action to expenditures for specific purposes. The General Fund of the Housing Authority is included among these funds.