San Mateo County in California is an early adopter of the GASB standard requiring classification of fund balances. In its notes to the financial statements San Mateo provided the following information about the amounts and classifications for the San Mateo fund balances. Additionally, it provided information concerning policies that affected its classification decisions. Use the information provided by San Mateo to complete this case.

Required
a. San Mateo lists both inventory and advances (a type of receivable) as non- spendable fund balances. Explain what characteristic(s) the advances would need to possess to be classified as non-spendable.
b. Identify where San Mateo has reported unassigned fund balances and discuss whether you agree with San Mateo€™s decision and why.
c. After reading the information on reserves, how should the fund balances related to reserves be classified? Explain your classificationchoice.

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COUNTY OF SAN MATEO Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2009 (in thousands) Fund balances for all the major and nonmajor governmental funds as of June 30, 2009, were distributed as follows: General Fund Nonmajor Funds Nonspendable: Inventory S 125 7,029 S 351 237 588 $ 476 7,266 Subtotal 7,154 7,742 Restricted for: General govemment 11,792 13,096 16,340 9,525 Public ways and faalities Health and sanitation Public assistance Capital projects Debt service 12,158 14,176 6,340 14,490 25,257 6,315 46,504 135,240 4,965 25,257 1 46,504 46,504 Subtotal 31,668 57,068 Committed to: Public protection Health and sanitation Public assistance Capital projects Debt service 596 2,605 22,705 26,099 2,605 22,705 25,310 Subtotal Assigned to: 789 1,034 495 1,755 10,475 General government Public protection 32,560 520 33,594 Public ways and failities Health and sanitation Public assistance Recreation Capital projects 1,755 13,918 2,270 3,443 2,059 1,956 1,956 Subtotal gned 179,281 $257,475 179,281 $46,504 $98,892