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Orange County, North Carolina As noted earlier, net assets may serve, over time, as one useful indicator of a government's financial condition. The liabilities of the County exceeded assets by $50.3 million as of June 30, 2012. Net assets are reported in three categories: invested in capital assets, net of related debt, of $39.8 million; restricted nets assets of $38.7 million; and unrestricted net deficit of $128.7 million. The invested in capital assets, net of related debt, category is defined as the County's investment in County-owned capital assets (e.g. land, buildings, automotive equipment, office and other equipment, and sewer lines), less any related debt still outstanding that was issued to acquire those items. The County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the County's investment in its capital assets is reported net of the outstanding related debt, the resources needed to repay that debt must be provided by other sources, since the capital assets cannot be used to liquidate these liabilities. At June 30, 2012, the investment in capital assets, net of related debt,decreased by $217,005. The final category of net assets is unrestricted net assets. This balance may be used to meet the government's ongoing obligations to citizens and creditors. At June 30, 2012, the total net deficit reported of $50.3 million is attributable to the unrestricted net deficit balance of ($128.7) million, which results from the debt financing related to school assets. As with many counties in the State of North Carolina, the County's deficit in unrestricted net assets is due primarily to the portion of the County's outstanding debt incurred for the two school systems located within the County. Under North Carolina law, the County is responsible for providing capital funding for the school systems. The County has chosen to meet its legal obligation to provide the school systems' capital funding by using a mixture of County funds and general obligation debt. The assets funded by the County, however, are owned and utilized by the school systems. Since the County, as the issuing government, acquires no capital assets, the County has incurred a liability without a corresponding increase in assets. At the end of the fiscal year, approximately $149.2 million of the outstanding debt on statements. The majority of this school system related debt is general obligation debt, which is 7