Analysis of expenditures and expenses.

(1) Do any components of expenditures and, at the government-wide level, expenses exhibit sharp growth?

(2) How flexible are expenditures? That is, are there large percentages of relatively nondiscretionary expenditures, such as for interest and public safety?

(3) How does the growth pattern of operating expenditures and expenses over the past 10 years compare with that of revenues?

Government of the United States Virgin Islands Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities - Governmental Funds (in thousands) Year Ended September 30, 2016 Net change in fund balances- total governmental funds Government funds report capital outlays as expenditures. However, in the statement of activities the cost 5 99,447 of those assets is allocated over their estimated useful lives and reported as depreciation expense This is the amount by which capital outlays exceeded depreciation in the current year 50,676 Tax revenue in the statement of activities, which do not provide current financial resources, are not reportec as revenue in the funds. (623) The issuance of long-term debt provides current financial resources to govemmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of the governmental funds. This is the amount by which debt repayments of $177.8 million exceed the loan and bond proceeds of $111.2 million. 66,689 Some expenses reported in the statement of activities not requir e the use of current financial resources and therefore are not reported as expenditures in govemmental funds. This is the amount by which the increase in certain liabilities reported in the statement of net position of the previous year increased expenses reported in the statement of activities that do not require the use of current financial resources. 1,285 Some expenses reported as prepaid assets in the statement of net position in the current year are recognized as expenses in the following year in the statement of activities. (444) Bond premiums and discounts are reported as other financing sources and uses in the governmental funds when the bonds are issued, and are capitalized and amortized in the government-wide financial statements. This amount represents additional net interest expense reported in the statement of activities related to the amortization of premiums, discounts, deferred refunding, and accreted interest on capital appreciation bonds during the current year (7,388) Certain interest reported in the statement of activities does not require the use of current financial resources and therefore is not reported as expenditures in the governmental funds This amount represents the increase in interest payable reported in the statement of net assets. 1,603 Certain pension expense reported in the statement of activities does not require the use of current financial resources and therefore is not reported as expenditures in the governmental funds. This amount represents the increase in pension liabilities for the allocable share of pension expense reported in the statement of net (204,290)