Agenda - 10-28-2008 - 5 - Laserfiche WebLink

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Source of Funds School Capital County Capital ` Pro'ect Fund Pro'ect Fund Additional Funds Needed $8,430,000 $7,100,000 Unallocated Alternative Financing 1,347,000 Unallocated Bonds 907,000 School Capital Reserve Funds 580,000 From Closed Projects 455,000 Parks Open Space Bonds to be issued 5,500,000 Interest Earnin s 850,000 Total Funds Available $3,289,000 $6,350,000 Net Shortfall $5,141,000 $750,000 Total Both Funds $5,891,000 Auditor Responsibility Two reasons external audits would not have revealed these misalignments are: 1) The County's annual audit focuses on the financial statements as a whole which are not presented at the individual project level. These problems only become apparent when analyzed at the individual project level. 2) The capital project funds are budgeted on a project length or multi-year basis. The fact that revenue received for particular revenue is less than budget at the end of a fiscal year is not an abnormal condition. It requires knowledge of when the specific funding sources for a project are expected to be received to determine whether a problem exists. This type of analysis is beyond the scope of the audit. The presentation of the financial statements for the two capital project funds has been expanded for FY 2007-08 to provide a comparison of budget and actual project expenditures for auditor review. Staff Proposal for Covering Remaining Shortfall As stated earlier, $5.89 million in additional capital funding is needed to cover the shortfall. Based on current year cash flow needs, at least $3.5 million of the shortfall is needed in the current fiscal year. The remaining $2.391 million will be needed in FY 2009-10. Staffs analysis shows the majority of the remaining shortfalls resulted from differences between the pay-as-you-go funds budgeted for projects in the two capital project funds and the amount of money transferred to the two capital projects funds from the General Fund. Most of these differences existed when the conversion to MUNIS was made. This means they occurred prior to the end of fiscal year 2003 over one or more fiscal years. If those additional amounts of pay- as-you-go revenue had been transferred from the General Fund, the fund balance would be less than it currently stands. Staff recommends the Board approve atwo-year funding plan to replenish the shortfall by appropriating General Fund available fund balance.