Maricopa County, Arizona report on examination of annual expenditure limitation report

              MARICOPA COUNTY, ARIZONA
Report on Audit of Annual
Expenditure Limitation Report
Year Ended June 30, 2001
MARICOPA COUNTY
Report on Audit of Annual Expenditure Limitation Report
Year Ended June 30, 2001
Table of Contents Page
Independent Auditors' Report 1
Annual Expenditure Limitation Report—Part I 2
Annual Expenditure Limitation Report—Part II 3
Annual Expenditure Limitation Report—Reconciliation 4
Notes to Annual Expenditure Limitation Report 5
2910 NORTH 44 th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553 -0333 • FAX (602) 553 -0051
DEBRA K. DAVENPORT, CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL WILLIAM THOMSON
DEPUTY AUDITOR GENERAL
Independent Auditors' Report
Members of the Arizona State Legislature
The Board of Supervisors of
Maricopa County, Arizona
We have audited the accompanying Annual Expenditure Limitation Report of Maricopa County
for the year ended June 30, 2001. This report is the responsibility of the County's
management. Our responsibility is to express an opinion on this report based on our audit.
We conducted our audit in accordance with U.S. generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the report is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the report. An audit also
includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall report presentation. We believe that our audit
provides a reasonable basis for our opinion.
The accompanying Annual Expenditure Limitation Report was prepared for the purpose of
complying with the uniform expenditure reporting system as discussed in Note 1, and is not
intended to be a presentation in conformity with U.S. generally accepted accounting principles.
In our opinion, the Annual Expenditure Limitation Report of Maricopa County for the year
ended June 30, 2001, referred to above presents fairly, in all material respects, the information
required by the uniform expenditure reporting system on the basis of accounting described in
Note 1.
This report is intended solely for the information and use of the members of the Arizona State
Legislature and the Board of Supervisors, and for filing with the Auditor General of the State of
Arizona and is not intended to be and should not be used by anyone other than these specified
parties. However, this report is a matter of public record and its distribution is not limited.
Dennis L. Mattheisen, CPA
Financial Audit Director
May 22, 2002
MARICOPA COUNTY
Annual Expenditure Limitation Report—Part I
Year Ended June 30, 2001
2
1. Economic Estimates Commission expenditure limitation $634,954,300
2. Amount subject to the expenditure limitation (total amount from
Part II, Line C) 634,954,299
3. Amount under the expenditure limitation $ 1
I hereby certify, to the best of my knowledge and belief, that the information contained in this
report is accurate and in accordance with the requirements of the uniform expenditure
reporting system.
Signature of Chief Fiscal Officer:
Name and Title: Tom Manos, Chief Financial Officer
Telephone Number: (602) 506-3561 Date: May 22, 2002
See accompanying notes to report.
MARICOPA COUNTY
Annual Expenditure Limitation Report—Part II
Year Ended June 30, 2001
Special Debt Capital Expendable
General Revenue Service Projects Trust Enterprise
Description Fund Funds Funds Funds Fund Funds Total
A. Amounts reported on the Reconciliation, Line D $442,638,191 $ 453,532,604 $ 25,941,675 $ 90,786,093 $10,397 $641,922,983 $1,654,831,943
B. Less exclusions claimed:
Debt service requirements on bonded
indebtedness (Note 2) 25,941,675 25,941,675
Proceeds from other long-term obligations (Note 3) 381,442 29,251,057 5,630,711 35,263,210
Debt service requirements on other long-term
obligations (Note 4) 9,258,908 57,631 2,256,170 11,572,709
Dividends, interest, and gains on the sale or
redemption of investment securities (Note 5) 14,981,417 10,397 11,147,316 26,139,130
Trustee or custodian (Note 6) 38,659,236 38,659,236
Grants and aid from the federal government (Note 7) 22,768,221 75,607,621 14,915,281 113,291,123
Grants, aid, contributions, or gifts from a private
agency, organization, or individual, except
amounts received in lieu of taxes (Note 8) 201,775 201,775
Amounts received from the State of Arizona (Note 9) 249,773 69,015,362 6,681,256 75,946,391
Quasi-external interfund transactions (Note 10) 18,120 302,500 55,983,074 56,303,694
Amounts accumulated for the purchase of land,
and the purchase or construction of buildings or
improvements (Note 11) 51,169,485 51,169,485
Highway user revenues in excess of those received
in fiscal year 1979-80 (Note 12) 69,993,860 69,993,860
Contracts with other political subdivisions (Note 13) 22,584,188 24,646,632 372,339,023 419,569,843
Refunds, reimbursements, and other recoveries
(Note 14) 517,867 855,606 73,115,993 74,489,466
Amounts received for distribution to school districts
(Note 15) 14,343,648 14,343,648
Prior years carryforward (Note 16) 6,992,399 6,992,399
Total exclusions claimed 94,437,755 276,998,451 25,941,675 80,420,542 10,397 542,068,824 1,019,877,644
C. Amounts subject to the expenditure limitation $348,200,436 $ 176,534,153 $ - $ 10,365,551 $ - $ 99,854,159 $ 634,954,299
See accompanying notes to report.
3
MARICOPA COUNTY
Annual Expenditure Limitation Report—Reconciliation
Year Ended June 30, 2001
Special Debt Capital Expendable
General Revenue Service Projects Trust Enterprise
Description Fund Funds Funds Funds Fund Funds Total
A. Total expenditures or expenses and applicable
other financing uses reported within the general
purpose financial statements $537,571,778 $548,949,885 $31,768,372 $92,215,918 $10,397 $618,735,686 $1,829,252,036
B. Deductions:
Items not requiring use of working capital:
Depreciation 7,313,562 7,313,562
Expenditures of separate legal entities established
under Arizona Revised Statutes (Note 17) 94,667,280 5,826,697 1,429,825 101,923,802
Long-term care contributions withheld by the
State Treasurer (Note 18) 91,784,692 91,784,692
Present value of net minimum capital lease
payments recorded as capital outlay expenditures
and proceeds of capital leases at inception of the
agreements 165,830 165,830
Charges to other funds in excess of Internal Service
Funds expenses (Note 19) 2,983,065 750,001 1,725,926 5,458,992
Total deductions 94,933,587 95,417,281 5,826,697 1,429,825 9,039,488 206,646,878
C. Additions:
Principal payments on long-term debt (Note 20) 1,451,306 1,451,306
Acquisition of capital assets 30,775,479 30,775,479
Total additions 32,226,785 32,226,785
D. Amounts reported on Part II, Line A $442,638,191 $453,532,604 $25,941,675 $90,786,093 $10,397 $641,922,983 $1,654,831,943
See accompanying notes to report.
4
MARICOPA COUNTY
Notes to Annual Expenditure Limitation Report
Year Ended June 30, 2001
5
Note 1 - Summary of Significant Accounting Policies
The Annual Expenditure Limitation Report (AELR) is presented on the basis of
accounting prescribed by the uniform expenditure reporting system (UERS), as
required by Arizona Revised Statutes §41-1279.07, which excludes expenditures or
expenses of certain revenues specified in the Arizona Constitution, Article IX, §20
from the total expenditures or expenses reported in the annual general purpose
financial statements.
In accordance with the UERS requirements, a note to the AELR is presented below
for any exclusion claimed on Part II and each deduction or addition in the
Reconciliation that cannot be traced directly to an amount reported in the annual
general purpose financial statements. All references to financial statement amounts
in the following notes refer to the Combined Statement of Revenues, Expenditures,
and Changes in Fund Balances—All Governmental Fund Types and Expendable
Trust Fund for the General, Special Revenue, Debt Service, Capital Projects, or
Expendable Trust Fund; the Combined Statement of Revenues, Expenses, and
Changes in Fund Equity—All Proprietary Fund Types for the Enterprise and Internal
Service Funds; and to the Combined Statement of Cash Flows—All Proprietary Fund
Types for the Enterprise and Internal Service Funds.
Note 2 - The exclusion claimed for debt service requirements on bonded indebtedness in the
Debt Service Funds consists of principal retirement and interest expense.
Note 3 - The exclusion claimed for proceeds from other long -term obligations in the General
Fund consists of expenditures made from the proceeds of capital leases issued in
prior years reported as capital outlay expenditures. The exclusion claimed for
proceeds from other long -term obligations in the Capital Projects Funds consists of
expenditures made from the proceeds of lease revenue bonds reported as capital
outlay expenditures. The exclusion claimed for proceeds from other long-term
obligations in the Enterprise Funds consists of certificates of participation proceeds
spent for the acquisition of fixed assets, reported as cash-flows from capital and
related financing activities.
Note 4 - The exclusion claimed for debt service requirements on other long-term obligations
consists of capital leases and certificates of participation principal and interest
payments of $9,258,908 reported as general government and public safety
expenditures in the General Fund; $57,631 reported as health, welfare, and
sanitation expenditures in the Special Revenue Funds; $816,318, $379,635, and
$255,353 reported as reductions of the certificates of participation, capital leases,
and installment purchase payables, respectively, in the Enterprise Funds; and
$804,864 reported as interest expense in the Enterprise Funds.
MARICOPA COUNTY
Notes to Annual Expenditure Limitation Report
Year Ended June 30, 2001
6
Note 5 - The exclusion claimed for dividends, interest, and gains on the sale or redemption of
investment securities in the Special Revenue Funds and the Expendable Trust Fund
of $14,981,417 and $10,397, respectively were reported as miscellaneous revenues.
In addition, of the total interest income of $11,900,942 reported in the Enterprise
Funds, $753,626 has been carried forward to future years.
Note 6 - The exclusion claimed in the General Fund for trustee or custodian consists of
$38,659,236 in contributions by the County to the Arizona Health Care Cost
Containment System (AHCCCS) for acute care.
Note 7 - The exclusions claimed for grants and aid from the federal government of
$113,291,123 consist of the following:
General Fund—$22,768,221. This amount consists of federal grants of $1,092,243
reported as intergovernmental revenues and disproportionate share settlements of
$32,755,200 of which $11,079,222 has been carried forward to future years.
Special Revenue Funds—$75,607,621. This amount was reported as intergovernmental
revenues.
Enterprise Funds—$14,915,281. This amount consists of disproportionate share
settlements of $13,140,300 reported as other revenues and $1,778,593 of federal
grants reported as grant revenues of which $3,612 has been carried forward to
future years.
Note 8 - The exclusion claimed for grants, aid, contributions, or gifts from a private agency,
organization, or individual, except amounts received in lieu of taxes in the Special
Revenue Funds of $201,775 was reported as intergovernmental revenues.
Note 9 - The exclusions claimed for amounts received from the State of Arizona of
$75,946,391 consist of the following:
General Fund—$249,773. This amount was reported as intergovernmental
revenues.
Special Revenue Funds—$69,015,362. This amount consists of $68,479,607
reported as intergovernmental revenues and $535,755 reported as miscellaneous
revenues.
Enterprise Funds—$6,681,256. This amount was reported as grant revenues.
MARICOPA COUNTY
Notes to Annual Expenditure Limitation Report
Year Ended June 30, 2001
7
Note 10 - The exclusion claimed for quasi-external interfund transactions of $18,120 in the
General Fund was reported as charges for services revenues. The exclusion
claimed for quasi-external interfund transactions of $302,500 in the Special Revenue
Funds was reported as miscellaneous revenues. In the Enterprise Funds, the
$55,983,074 consists of $39,598,274 reported as net patient service revenues and
$16,384,800 reported as charges for services revenues.
Note 11 - The exclusion claimed in the Capital Projects Funds for amounts accumulated for
the purchase of land, and the purchase or construction of buildings or improvements
of $51,169,485 consists of capital outlay expenditures for the construction of new jail
facilities made from the accumulation of sales tax revenues approved and exempted
from the expenditure limitation by County voters.
Note 12 - The exclusion claimed in the Special Revenue Funds for highway user revenues in
excess of those received in fiscal year 1979-80 is derived by subtracting the 1979-80
base year highway user fees of $14,879,726 from the total of highway user revenues
received of $84,873,586, which was reported as intergovernmental revenues.
Note 13 - The exclusions claimed for contracts with other political subdivisions of
$419,569,843 consist of the following:
General Fund—$22,584,188. This amount consists of $4,326,304 reported as
intergovernmental revenues, $3,226,178 reported as charges for services revenues,
and $15,031,706 reported as a residual equity transfer in.
Special Revenue Funds—$24,646,632. This amount consists of $23,404,321
reported as intergovernmental revenues and $1,242,311 reported as miscellaneous
revenues.
Enterprise Funds—$372,339,023. This amount consists of $359,140,433 reported
as charges for services revenues and $13,198,590 reported as net patient service
revenues.
Note 14 - The exclusion claimed for refunds, reimbursements, and other recoveries of
$517,867 in the General Fund consists of various expenditure reimbursements
reported as intergovernmental revenues. The exclusion claimed for refunds,
reimbursements, and other recoveries of $855,606 in the Special Revenue Funds
consists of expenditure reimbursements for Racketeer Influenced and Corrupt
Organizations (RICO) activities reported as fines and forfeits revenues. The
exclusion claimed of $73,115,993 in the Enterprise Funds consists of Medicare
reimbursements of $34,942,618; AHCCCS reimbursements of $33,146,815; health
MARICOPA COUNTY
Notes to Annual Expenditure Limitation Report
Year Ended June 30, 2001
8
maintenance organization reimbursements for the treatment of Medicare patients of
$4,338,415; Champus reimbursements of $241,408 reported as net patient service
revenues; and intern reimbursements of $446,737 reported as other revenues.
Note 15 - The exclusion claimed in the Special Revenue Funds for amounts received for
distribution to school districts consists of expenditures of federal, state, and county
revenues of $14,343,648 reported as education expenditures for operation of
accommodation schools.
Note 16 - Prior years carryforward in the Special Revenue Funds consists of constitutionally
excludable revenues unexpended in the year of receipt that have been accumulated
and were expended in the current year. Highway user revenues in excess of those
received in fiscal year 1979-80 and interest revenues carryforwards have been
accumulated and were expended in the current year in the amounts of $6,952,502
and $39,897, respectively.
Note 17 - The deduction of $101,923,802 for separate legal entities established under Arizona
Revised Statutes consists of expenditures of special assessment districts included
within the County’s reporting entity but not included in the Economic Estimates
Commission base limit calculations, and are reported in the following categories in
the general purpose financial statements:
Special Assessment Districts
Special
Revenue
Funds
Debt
Service
Funds
Capital
Projects
Funds
Public safety $34,384,714
Culture and recreation 11,152,035
Capital outlay 49,130,531 $1,429,825
Principal retirement $2,701,044
Interest charges 3,125,653
Total $94,667,280 $5,826,697 $1,429,825
Note 18 - The deduction of $91,784,692 in the General Fund consists of transaction privilege
taxes withheld by the State Treasurer to meet the County’s share of long-term care
costs of $96,130,039, less refunds of prior year contributions of $4,345,347. These
were reported as intergovernmental revenues and offsetting health, welfare, and
sanitation expenditures in the County’s general purpose financial statements.
Consequently, these expenditures have been deducted on the Reconciliation.
Note 19 - The deductions for charges to other funds in excess of Internal Service Funds
expenses are allocated to each fund type on the same basis as the original charges.
The amount allocated does not include charges of $119,816 pertaining to separate
legal entities.
MARICOPA COUNTY
Notes to Annual Expenditure Limitation Report
Year Ended June 30, 2001
9
Note 20 - The addition of $1,451,306 for principal payments on long-term debt in the Enterprise
Funds consists of certificates of participation payments of $816,318, capital leases
payments of $379,635, and installment purchase payments of $255,353.