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Exhibit E <br />ORANGE COUNTY, NORTH CAROLINA <br />RECONCILIATION OF THE STATEMENT OF <br />REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - <br />GOVERNMENTAL FUNDS - TO THE STATEMENT OF ACTIVITIES <br />FOR THE YEAR ENDED JUNE 30, 2012 <br />Amounts reported for governmental activities in the Statement of Activities (Exhibit B) <br />are different because: <br />Net change in fund balances - total governmental funds (Exhibit D)$ 22,480,842 <br />Governmental funds report capital outlays as expenditures. However, in the Statement <br />of Activities, the cost of those assets is allocated over their estimated useful lives and <br />reported as depreciation expense. The components of the change are as follows: <br />Capital outlay5,241,065 <br />Depreciation expense(4,369,158) <br />Other capital adjustments(53,884) <br />Revenues in the Statement of Activities that do not provide current financial resources <br />are not reported as revenues in the funds. <br />Change in deferred revenue455,243 <br />Governmental funds report the effect of issuance costs, premiums, discounts, and similar <br />items when debt is first issued, whereas, these amounts are deferred and amortized in the <br />Statement of Activities. This amount is the net effect of these differences in the treatment <br />of long-term debt and related accounts.(164,369) <br />Expenses in the Statement of Activities that do not pay for current financial obligations are <br />not reported as expenditures in the governmental funds. This adjustment is the amount of <br />accrued interest on long-term debt.501,029 <br />The issuance of long-term debt provides for current financial resources of governmental <br />funds. This amount is the proceeds on debt issuances recoded in the governmental funds.(28,426,389) <br />The repayment of the principal of long-term debt consumes the current financial resources <br />of governmental funds. This amount is the principal payments recorded in the governmental <br />funds.18,718,055 <br />Expenses related to OPEB liability, compensated absences, and net pension obligation in <br />the Statement of Activities that do not pay for current financial obligations are not reported <br />as expenditures in the governmental funds. This adjustment is the amount of change in these <br />balances in the current year.(5,218,630) <br />The internal service funds are used by management to charge <br />406,183 <br /> the costs of dental insurance and OPC retiree health insurance. <br />$ 9,569,987 <br />Change in net assets of governmental activities <br />The accompanying notes are an integral part of the financial statements. <br />22 <br /> <br />