State of Arizona June 30, 2003 Report Highlights Financial Audit

State of ArizonaREPORTState Incurs Increased Debt forHIGHLIGHTSFinancial Report School Capital FacilitiesSubjectThe State of Arizona issues aComprehensive AnnualFinancial Report. The State is of revenue bonds, qualified zone academyThe State continues to incur debt forresponsible for preparingbonds, and certificates of participation.school capital projects. As of June 30,financial statements,maintaining strong internal The table below details the debt issued for2003, the State issued $820 million ofcontrols, and demonstrating school capital projects as of June 30,revenue and qualified zone academyaccountability for its use of 2003.bonds to provide funding to correctpublic monies. As the auditors,our job is to determine whether existing school facilities deficiencies. Inthe State has met its This debt negatively impacts the State’saddition, approximately $373 million ofresponsibilities. unrestricted net assets, because thecertificates of participation have beenState incurs debt to fund the projects butissued to build new school facilities.Our Conclusionreceives no asset in return. The schoolAdditional debt issuances are alsoThe information in the State’s buildings (assets) are owned by theplanned in fiscal year 2004.financial statements is fairlyschool districts rather than the State. Asstated in accordance withgenerally accepted accounting shown in the Statement of Net AssetsIn 1994, Arizona’s system of schoolprinciples in all material table on page 2 ...