Pima County, Arizona report on audit of annual expenditure limitation report

              PIMA COUNTY, ARIZONA
Report on Audit of Annual
Expenditure Limitation Report
Year Ended June 30, 2001
PIMA 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
Pima County, Arizona
We have audited the accompanying Annual Expenditure Limitation Report of Pima 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 Pima 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 24, 2002
2
PIMA COUNTY
Annual Expenditure Limitation Report—Part I
Year Ended June 30, 2001
(Amounts in Thousands)
1. Economic Estimates Commission expenditure limitation $324,794
2. Amount subject to the expenditure limitation (total
amount from Part II, Line C) 324,793
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: Carol Bonchalk, Director of Financial and Information Services
Telephone Number: (520) 740-8401 Date:
See accompanying notes to report.
PIMA COUNTY
Annual Expenditure Limitation Report—Part II
Year Ended June 30, 2001
(Amounts in Thousands)
Special Debt Capital
General Revenue Service Projects Enterprise
Description Fund Funds Fund Fund Funds Total
A. Amounts reported on the Reconciliation, Line D $240,013 $140,479 $50,219 $87,327 $268,411 $786,449
B. Less exclusions claimed:
Bond proceeds (Note 2) 37,034 37,034
Debt service requirements on bonded indebtedness (Note 3) 50,219   10,590 60,809
Proceeds from other long-term obligations (Note 4) 18,292   18,292
Debt service requirements on other long-term obligations (Note 5) 4,664   122   1,259 6,045
Dividends, interest, and gains on the sale or redemption of
investment securities (Note 6) 8,322 3,849 5,114 6,557  23,842
Trustee or custodian (Note 7) 14,952   1,927 16,879
Grants and aid from the federal government (Notes 8 and 9) 4,141 45,460 6,098 6,342 62,041
Grants, aid, contributions, or gifts from a private agency,
organization, or individual, except amounts received in lieu
of taxes (Note 10) 532 317 849
Amounts received from the State of Arizona (Notes 8 and 11) 705   28,178 8,769   7,526 45,178
Quasi-external interfund transactions (Note 12) 4,002 9,058   13,060
Highway user revenues in excess of those received in fiscal
year 1979-80 (Note 8) 21,653 21,653
Contracts with other political subdivisions (Notes 8 and 13) 5,444 3,261 1,814 122,621 133,140
Prior years carryforward (Note 14) 17,825 5,009 22,834
Total exclusions claimed 42,230 104,982 50,219 76,654 187,571 461,656
C. Amounts subject to the expenditure limitation $197,783 $ 35,497 $ - $10,673 $ 80,840 $324,793
3
See accompanying notes to report.
PIMA COUNTY
Annual Expenditure Limitation Report—Reconciliation
Year Ended June 30, 2001
(Amounts in Thousands)
Special Debt Capital
General Revenue Service Projects Enterprise
Description Fund Funds Fund Fund Funds Total
A. Total expenditures or expenses and applicable other financing uses
reported within the general purpose financial statements $270,028 $147,367 $50,219 $87,673 $237,902 $793,189
B. Deductions:
Items not requiring use of working capital:
Depreciation 14,675 14,675
Amortization of deferred charges 78 78
Loss on disposal of capital assets 43 43
Bad debt expense (Note 15) 7,853 7,853
Landfill closure and postclosure care costs 170 170
Expenditures of separate legal entities established under Arizona
Revised Statutes (A.R.S.) (Note 16) 6,954 346 7,300
Long-term care contributions withheld by the State Treasurer (Note 17) 29,791 29,791
Present value of net minimum capital lease and installment purchase
contract payments recorded as expenditures at inception of the
agreements (Note 18) 345 345
Total deductions 30,136 6,954 346 22,819 60,255
C. Additions:
Principal payments on long-term debt (Note 19) 5,006 5,006
Acquisition of capital assets (Note 20) 48,218 48,218
Internal Service Fund expenses not charged to other funds (Note 21) 121 66 104 291
Total additions 121 66 53,328 53,515
D. Amounts reported on Part II, Line A $240,013 $140,479 $50,219 $87,327 $268,411 $786,449
See accompanying notes to report.
4
PIMA COUNTY
Notes to Annual Expenditure Limitation Report
Year Ended June 30, 2001
(Amounts in Thousands)
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 (A.R.S.) §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 for the General,
Special Revenue, Debt Service, and Capital Projects Funds; and to the Combined
Statement of Revenues, Expenses, and Changes in Fund Equity—All Proprietary
Fund Types and Discretely Presented Component Units for the Enterprise and
Internal Service Funds.
Note 2 - The exclusion claimed for bond proceeds of $37,034 in the Capital Projects Fund
consists of expenditures made from $50,013 in proceeds of long-term debt.
Remaining bond proceeds of $12,979 have been carried forward to future years.
Note 3 - The exclusion claimed for debt service requirements on bonded indebtedness of
$50,219 in the Debt Service Fund consists of principal, interest, and fiscal charges of
$36,873, $13,173, and $173, respectively.
The exclusion claimed for debt service requirements on bonded indebtedness of
$10,590 in the Enterprise Funds consists of $4,515 and $6,075 in Wastewater
Management sewer revenue bonds principal and interest payments, respectively.
Note 4 - The exclusion claimed for proceeds from other long -term obligations of $18,292 in
the Enterprise Funds consists of expenditures made from proceeds of a long-term
loan for Wastewater Management.
Note 5 - The exclusion claimed for debt service requirements on other long-term obligations
of $4,664 in the General Fund consists of principal, interest, and fiscal charges on
capital leases and certificates of participation of $2,834, $1,826, and $4,
respectively.
PIMA COUNTY
Notes to Annual Expenditure Limitation Report
Year Ended June 30, 2001
(Amounts in Thousands)
6
The exclusion claimed for debt service requirements on other long-term obligations
of $122 in the Special Revenue Funds consists of principal, interest, and fiscal
charges on capital leases of $116, $4, and $2, respectively.
The exclusion claimed for debt service requirements on other long-term obligations
of $1,259 in the Enterprise Funds consists of principal and interest payments on a
long-term loan payable for Wastewater Management of $491 and $768, respectively.
Note 6 - The exclusion claimed for dividends, interest, and gains on the sale or redemption of
investment securities of $8,322 in the General Fund consists of interest on
investments expended of $4,361 and interest on delinquent taxes expended of
$3,961, which was recorded as tax revenue.
The exclusion claimed for dividends, interest, and gains on the sale or redemption of
investment securities of $3,849 in the Special Revenue Funds consists of interest on
investments expended. Remaining revenues of $198 were not excluded since they
were deducted on the Reconciliation as expenditures of separate legal entities.
The exclusion claimed for dividends, interest, and gains on the sale or redemption of
investment securities of $5,114 in the Capital Projects Fund consists of interest on
investments expended. Remaining revenues of $346 were not excluded since they
were deducted on the Reconciliation as expenditures of separate legal entities.
Note 7 - The exclusion claimed for trustee or custodian of $14,952 in the General Fund
consists of the County’s contributions to the Arizona Health Care Cost Containment
System for acute care.
The exclusion claimed for trustee or custodian of $1,927 in the Special Revenue
Funds consists of antiracketeering expenditures, benefiting other jurisdictions, that
were reported as general government expenditures.
Note 8 - The following schedule presents revenues from which exclusions have been claimed
for federal grants and aid, amounts received from the State of Arizona, highway user
revenues, and contracts with other political subdivisions in the General, Special
Revenue, and Capital Projects Funds. The amounts excluded do not exceed
expenditures of such revenues.
PIMA COUNTY
Notes to Annual Expenditure Limitation Report
Year Ended June 30, 2001
(Amounts in Thousands)
7
Description
General
Fund
Special
Revenue
Funds
Capital
Projects
Fund
Grants and aid from the federal
government $ 4,141 $ 45,460 $ 6,098
Amounts received from the State
of Arizona 705 28,178 8,769
Highway user revenues in excess of
those received in fiscal year 1979-80 43,583
Contracts with other political
subdivisions 5,444 3,261 1,814
Other revenues—(nonexcludable) 100,118 6,275 6
Total intergovernmental revenues
as reported in the general
purpose financial statements $110,408 $126,757 $16,687
Of the $43,583 of highway user revenues, $21,653 was excluded in the Special
Revenue Funds and $5,450 was transferred to the Debt Service Fund where it was
spent and excluded as debt service requirements on bonded indebtedness during
the current year. The remaining $16,480 has been carried forward to future years.
Note 9 - The exclusion claimed for grants and aid from the federal government of $6,342 in
the Enterprise Funds consists of $5,893 of Medicare receipts reported as net patient
services revenue and $449 in grants reported as nonoperating revenues.
Note 10 - The exclusion claimed for grants, aid, contributions, or gifts from a private agency,
organization, or individual of $532 in the Special Revenue Funds consists of $156
reported as charges for services revenue and $376 reported as miscellaneous
revenue.
The exclusion claimed for grants, aid, contributions, or gifts from a private agency,
organization, or individual of $317 in the Enterprise Funds was reported as
nonoperating revenues.
Note 11 - The exclusion claimed for amounts received from the State of Arizona of $7,526 in
the Enterprise Funds consists of $6,102 in disproportionate share settlement
reported as other operating revenues, $926 in grants reported as nonoperating
revenues, and $498 reported as net patient services revenue.
Note 12 - The exclusion claimed for quasi-external interfund transactions of $4,002 in the
General Fund was reported as charges for services revenue.
PIMA COUNTY
Notes to Annual Expenditure Limitation Report
Year Ended June 30, 2001
(Amounts in Thousands)
8
The exclusion claimed for quasi-external interfund transactions of $9,058 in the
Enterprise Funds consists of Pima Health Care System’s net patient services
revenue received from the General Fund and other County departments.
Note 13 - The exclusion claimed for contracts with other political subdivisions of $122,621 in
the Enterprise Funds was reported as net patient services revenues.
Note 14 - Prior years carryforward consists of constitutionally excludable revenues
unexpended in the year of receipt that have been accumulated and were expended
in the current year as follows:
Description
Capital
Projects
Fund
Enterprise
Funds
Bond proceeds $17,825
Contracts with other political subdivisions $5,009
Total prior years carryforward expended $17,825 $5,009
Note 15 - The deduction for bad debt expense of $7,853 in the Enterprise Funds was reported
as general and administrative expenses.
Note 16 - The deductions for separate legal entities established under A.R.S. consist of
expenditures of special assessment districts, the flood control district, the stadium
district, and the municipal property corporation that were included within the
County’s reporting entity but not included in the Economic Estimates Commission
base limit calculations. These expenditures are reported in the following categories
in the general purpose financial statements:
Special
Revenue
Funds
Capital
Projects
Fund
Public safety $5,299
Culture and recreation 1,648
Capital projects $346
Debt service—miscellaneous 7
Total $6,954 $346
Note 17 - The amount of transaction privilege taxes withheld by the State Treasurer to meet
the County's share of long-term care costs was reported as a revenue and an
offsetting expenditure in the County's general purpose financial statements.
Consequently, this expenditure has been deducted on the Reconciliation.
PIMA COUNTY
Notes to Annual Expenditure Limitation Report
Year Ended June 30, 2001
(Amounts in Thousands)
9
Note 18 - The deductions of $345 in the General Fund consists of the present value of net
minimum capital lease payments at the inception of the agreements, reported as
proceeds of long -term debt and general government expenditures.
Note 19 - The addition of $5,006 for principal payments on long-term debt in the Enterprise
Funds consists of payments made by Wastewater Management.
Note 20 - The addition of $48,218 for acquisition of capital assets in the Enterprise Funds
consists of Pima Health Care System, Development Services, Parking Garages, and
Wastewater Management acquisitions in the amounts of $1,619, $238, $18, and
$46,343, respectively.
Note 21 - The addition of $291 for Internal Service Fund expenses not charged to other funds
consists of the Internal Service Funds’ total charges for services and interest income
of $26,105, less its total operating expenses of $26,396. The addition was allocated
to the General Fund, Special Revenue Funds, and Enterprise Funds based on their
total expenditures and operating expenses for the year ended June 30, 2001.