Uniform expenditure reporting system

              UNIFORM EXPENDITURE
REPORTING SYSTEM
UNIFORM EXPENDITURE
REPORTING SYSTEM
TABLE OF CONTENTS
I. Introduction
Background
Development of the Base Limit
11. Calendar of Events
111. Sanctions and Penalties
Excess Expenditures
Failure to File Reports
IV. Permanent Adjustments of the Base Limit
V. Voter-Approved Expenditure Limitations
Alternative Expenditure Limitations
Modified Expenditure Limitations
VI. Reporting Instructions-Counties
VII. Reporting Instructions--Cities and Towns
VIII. Reporting Instructions-Community College Districts
IX. Appendix
Article IX, $20, Arizona Constitution
Article IX, $21, Arizona Constitution
Arizona Revised Statutes 99- 10 1.02(F)
Arizona Revised Statutes $9-48 1
Arizona Revised Statutes $ 15-1471
Arizona Revised Statutes $41 -563.0 1
Arizona Revised Statutes $4 1-563.02
Arizona Revised Statutes $4 1-563.03
Arizona Revised Statutes $41- 1279.07
Arizona Revised Statutes $42-30 1(J)
INTRODUCTION
BACKGROUND
On June 3, 1980, Arizona voters approved Arizona Constitution, Article IX, $920 and 21, prescribing an
expenditure limitation for each county, city, town, and community college district. The purpose of the
expenditure limitation is to control expenditures and limit future increases in spending to adjustments for
inflation; deflation; population growth of counties, cities, and towns; and student population growth of
community college districts.
Provisions are included that allow counties, cities, and towns to authorize expenditures in excess of the
expenditure limitation for expenditures directly necessitated by a natural or manmade disaster or if
approved by two-thirds of the governing board and a majority of the qualified voters. The Constitution
also allows counties, cities, and towns to permanently adjust the base limit subject to voter approval;
allows cities and towns to establish a voter-approved alternative expenditure limitation; and allows
community college districts to establish a voter-approved modified expenditure limitation.
Counties, cities, and towns are subject to the expenditure limitation effective in the fiscal year following
the first regularly scheduled election of governing board members after July 1, 1980. Community college
districts became subject to the expenditure limitation on July 1, 1981.
The Constitution also limits the amount of revenues that may be generated from property taxes. A
2 percent annual increase is the maximum allowed by law unless special voter approval is obtained.
Arizona Revised Statutes (A.R.S.) $41-1279.07 requires the Auditor General to prescribe a Unifortn
Expenditure Reporting System (UERS) for all political subdivisions subject to the constitutional
expenditure limitations prescribed by Article IX, $920 and 2 1. As required by A.R.S., this manual was
developed to provide detailed instructions for completing and submitting the required reports. Detailed
instructions and examples of the reports are presented in $§VI, VII, and VIII.
DEVELOPMENT OF THE BASE LIMIT
The Economic Estimates Commission (EEC) was required by the Constitution to establish for each
political subdivision a base limit from actual expenditures of local revenues of fiscal year 1979-80.
Each year, the EEC develops an expenditure limitation for each county, city, and town by adjusting the
base limit for population and inflation factors. In the case of community college districts, the base limit
is adjusted for changes in student population and inflation factors. By February 1, the EEC must provide
each political subdivision with an estimated expenditure limitation for the following fiscal year, and by
April 1, must determine and report the actual expenditure limitation for the following fiscal year to each
political subdivision.
CALENDAR OF EVENTS
The following is a list of significant events concerning expenditure limitation reports, permanent
adjustments ofthe base limit, alternative expenditure limitations, and modified expenditure limitations as
prescribed by the Arizona Constitution (A.C.) and Arizona Revised Statutes (A.R.S.). In order to meet
the required dates, the governing board may specify additional interim dates for internal planning and
control.
-...- -. -... '-.....v.
Prior to February 1
Prior to April 1
Prior to July 3 1
Prior to October 3 1
February 28, or 1st
business day
thereafter
EXPENDITURE LIMITATION REPORTS
The Economic Estimates Commission (EEC) notifies
political subdivisions of the estimated expenditure
limitations for the following fiscal year.
The EEC notifies political subdivisions of their actual
expenditure limitations for the following fiscal year.
Political subdivisions provide to the Auditor General
the names of the chief fiscal officers designated to
submit the expenditure limitation reports for the
current fiscal year.
Political subdivisions submit to the Auditor General
the reports for the previous fiscal year required by the
Uniform Expenditure Reporting System (UERS),
unless an extension of up to 120 days is requested and
approved.
The 120-day extension period is over. Reports
required by the UERS must be submitted to the
Auditor General.
A.R.S. $41-563
A.C. IX 920(1)
A.C. IX $21(1)
A.R.S. $41-563
A.R.S.
$41-1279.07(E)
A.R.S.
$4 1 -1279.07(C)
A.R.S.
$41-1279.07(C)
PERMANENT BASE LIMIT ADJUSTMENTS AND
ALTERNATIVE EXPENDITURE LIMITATIONS
60 days prior to the
election
15 working days
after the required
documents are
submitted
Prior to the election
Not less than 10 days
prior to the election
After the election
Political subdivisions must submit the analyses
required by Arizona Revised Statutes to the Auditor
General.
The Auditor General must complete a review of the
submitted analyses and return them to the political
subdivisions.
A copy of the printed publicity pamphlet must be
submitted to the Auditor General in sufficient time to
allow for review and comment before distribution.
A copy of the publicity pamphlet must be mailed to
each registered voter.
The Auditor General and the EEC must receive a copy
of the certified election results.
A.R.S. $41-563.03(D)
& (E)
A.R.S. $41-563.03(D)
& (E)
A.R.S. $41-563.03(D)
& (E)
A.R.S. $1 9-141
A.R.S. $41-563.03(F)
MODIFIED EXPENDITURE LIMITATIONS
Not less than 10 days
prior to the election
After the election
A copy of the publicity pamphlet must be mailed to
each registered voter.
A copy of the certified election results should be
provided to the Auditor General and the EEC.
A.R.S. 519-141
SANCTIONS AND PENALTIES
EXCESS EXPENDITURES
As provided in Arizona Revised Statutes (A.R.S.) 54 1-1279.07(G), a statutorily prescribed amount of state
income tax will be withheld from cities and towns, and the amount of state aid specified by statute will
be withheld from community college districts that exceed their expenditure limitations without
authorization. A.R.S. $41-1279.07(H) requires a county that exceeds the expenditure limitation without
authorization to reduce its maximum allowable levy of primary property taxes.
Before state funds are withheld from cities, towns, or community college districts or the maximum
allowable levy of primary property taxes is reduced for counties, the Auditor General must hold a hearing
to determine if the political subdivision has exceeded the expenditure limitation without authorization.
To ensure due process, representatives of the political subdivision are invited to attend and participate in
this hearing.
If it has been determined that a city, town, or community college district has exceeded the expenditure
limitation without authorization, the Auditor General must notify the State Treasurer to withhold a portion
ofthe political subdivision's allocations ofthe above revenues for the fiscal year subsequent to the Auditor
General's hearing, in the following amounts:
1. If the excess expenditures are less than 5 percent of the limitation, an amount equal to the excess
expenditures.
2. If the excess expenditures are equal to or greater than 5 percent but less than 10 percent of the
limitation or are less than 5 percent of the limitation but the entity has exceeded the limitation for the
second consecutive time, an amount equal to triple the excess expenditures.
3. If the excess expenditures are equal to or greater than 10 percent of the limitation, an amount equal
to five times the excess expenditures or one-third of the allocation of the revenues, whichever is less.
When it has been determined that a county has exceeded the expenditure limitation without authorization,
the maximum allowable primary property tax levy must be reduced in the fiscal year subsequent to the
Auditor General's hearing by the amount of expenditures in excess of the county's expenditure limitation.
The calculation of the allowable levy for the fiscal year after the fiscal year of reduction, and future years,
should be calculated without regard to the reduction.
FAILURE TO FILE REPORTS
As prescribed in A.R.S. $41-1279.07(G), a chief fiscal officer, designated by the governing board of the
political subdivision, who refuses to make a timely filing of the required reports or intentionally files
erroneous reports is guilty of a Class 1 misdemeanor. An erroneous report is one that contains a material
misstatement.
Chief fiscal officers who fail to make a timely filing of the required reports will receive letters from the
Auditor General requesting that the reports be filed. If the reports remain outstanding, a letter requesting
that appropriate action be taken will be sent by the Auditor General to the county attorney.
PERMANENT ADJUSTMENTS OF THE BASE LIMIT
Arizona Constitution, Article IX, §20(6) allows each county, city, or town to permanently adjust its base
limit with the approval of a majority of the qualified electors. The adjustment should be used to determine
the expenditure limitation beginning with the fiscal year immediately following the fiscal year the
permanent adjustment is approved. If the permanent adjustment of the base limit is not adopted by a
majority of the qualified voters, the state-imposed base limit would apply.
Auditor General Review
As required by Arizona Revised Statutes (A.R.S.) $41-563.03, at least 60 days before the election and
before printing the publicity pamphlet, the following documents must be submitted to the Auditor General
by the person, group, organization, or governing board proposing the adjustment:
1. A detailed analysis that contains the following information:
a. The amount of the proposed adjustment to the base limit
b. The specific area or areas of the base limit to be adjusted
c. Specific amounts of estimated revenue from each and any source to be used for financing the
upward adjustment to the base limit, or the source or sources of estimated revenues to be reduced
as a result of a downward adjustment of the base limit and any assumptions used in estimating
such revenue
2. A summary analysis that contains the following information:
a. The amount of the proposed adjustment to the base limit
b. The effect of the adjustment on the expenditure limitation
c. The source or sources of estimated revenues to be used for financing the upward adjustment to
the base limit, or the source or sources of estimated revenues to be reduced as a result of a
downward adjustment of the base limit
d. A statement of the purpose or purposes for which the additional spending capacity will be used
Once the detailed and summary analyses are received by the Auditor General, they must be reviewed
within 15 working days. Additional information may be requested by the Auditor General to clarify or
correct the analyses. The reviewed analyses are then returned to the county, city, or town. No revision
may be made to the documents after the Auditor General's review.
The clerk of the board of supervisors or the city or town clerk must retain the reviewed analyses and make
copies available to any registered voter.
Publicity Pamphlets
A.R.S. $41-563.03 requires a county, city, or town to prepare and print publicity pamphlets presenting the
proposed permanent adjustment of the base limit to be voted upon and related information according to
the requirements of A.R.S. $5 19-123 and 19-141. The governing board must transmit a copy of the
publicity pamphlet to the Auditor General for review and comment before distribution to registered voters.
One copy of the publicity pamphlet must be mailed to each registered voter not less than ten days before
the election.
PERMANENT ADJUSTMENTS OF THE BASE LIMIT
The publicity pamphlets must contain the following information:
1. The date of the election
2. The names and locations of polling places and the times they are open
3. A true and complete copy of the title and text of the proposed permanent adjustment of the base limit
4. The form in which the proposed permanent adjustment will appear on the ballot, the official title, a
descriptive title prepared by the clerk of the board of supervisors or the city or town clerk, and the
number by which the proposed adjustment will be designated
5. A statement of the purpose or purposes for which the additional spending capacity will be used, as
reviewed by the Auditor General
6. A summary of the amount of the proposed adjustment to the base limit, as reviewed by the Auditor
General
7. A summary of the effect of the adjustment on the expenditure limitation, as reviewed by the Auditor
General
8. A summary of the source or sources of estimated revenues to be used for financing the upward
adjustment ofthe base limit or the source or sources ofthe estimated revenues to be reduced as a result
of a downward adjustment of the base limit, as reviewed by the Auditor General
9. Arguments for and against the proposed adjustment, or an indication that no arguments forlagainst
were received
Official Ballot
The ballot must be in the form prescribed by A.R.S. $19-125, unless more than one adjustment to the base
limit is to be voted upon. In that case, the ballot must be in a format that enables voters to vote separately
on each adjustment. The official ballot must include the following information:
1. The official title and number of the proposed permanent adjustment of the base limit
2. A statement disclosing whether the adjustment to be voted upon was referred by a person, group, or
organization, or the governing board
3. A descriptive title not to exceed 50 words that includes a summary of the principal provisions of the
measure to be voted upon, which shall be prepared by the clerk of the board of supervisors or the city
or town clerk
After the election, the clerk of the board of supervisors or the city or town clerk must notify the Auditor
General and the Economic Estimates Commission of the election results as soon as the official canvass
is completed.
Detailed instructions for a permanent adjustment ofthe base limit and sample forms may be obtained from
the League of Arizona Cities and Towns.
VOTER-APPROVED EXPENDITURE LIMITATIONS
ALTERNATIVE EXPENDITURE LIMITATIONS
Arizona Constitution, Article IX, $20(9) allows a city or town to adopt an alternative expenditure
limitation with the approval of a majority of the qualified voters. Approval of an alternative expenditure
limitation must occur prior to the first fiscal year in which it applies. Alternative expenditure limitations
apply for 4 succeeding fiscal years, after which the state-imposed expenditure limitation becomes effective,
unless a new alternative expenditure limitation is adopted. If an alternative expenditure limitation is not
adopted by a majority ofthe qualified voters, the state-imposed expenditure limitation applies, and no new
alternative expenditure limitations may be submitted to the voters for at least 2 years.
Exclusions from local revenues, including those enumerated in the Constitution, may be taken against
alternative expenditure limitations only if such exclusions are specifically identified in the resolution and
the publicity pamphlet.
Auditor General Review
As required by Arizona Revised Statutes (A.R.S.) $41-563.03, at least 60 days before the election and
before printing the publicity pamphlet, the following documents must be submitted to the Auditor General
by the person, group, organization, or governing board proposing the alternative expenditure limitation:
1. A detailed analysis that contains the following information:
a. The specific amounts estimated to be expended in specific areas for a period of 4 consecutive
fiscal years
b. Specific amounts of estimated revenue from all sources, and any assumptions used in estimating
such revenue, for a period of 4 consecutive fiscal years
2. A summary analysis that contains the following information:
a. The total amount of estimated expenditures under the proposed alternative expenditure limitation
for a period of 4 consecutive fiscal years
b. The total amount of estimated expenditures under the state-imposed expenditure limitation,
considering constitutionally allowed exclusions, for a period of 4 consecutive fiscal years
c. Estimated revenues from all sources from which any expenditure limitation shall be funded for
a period of 4 consecutive fiscal years
d. A statement that if the proposed alternative expenditure limitation is not approved by a majority
of the qualified voters, the state-imposed expenditure limitation will apply to the city or town
Once the detailed and summary analyses are received by the Auditor General, they must be reviewed
within 15 working days. Additional information necessary to clarify or correct the analyses may be
requested by the Auditor General. The reviewed analyses are then returned to the city or town. No
revision may be made to the documents after the Auditor General's review.
The city or town clerk must retain the reviewed analyses and make copies available to any registered voter.
VOTER-APPROVED EXPENDITURE LIMITATIONS
Publicity Pamphlets
A.R.S. 541-563.03 requires a city or town to prepare and print publicity pamphlets presenting the proposed
alternative expenditure limitation to be voted upon and related information according to the requirements
of A.R.S. $519-123 and 19-141. The city or town council must transmit a copy of the publicity pamphlet
to the Auditor General for review and comment before distribution to registered voters. One copy of the
publicity pamphlet must be mailed to each registered voter not less than ten days before the election.
The publicity pamphlets must include the following information:
1. The date of the election
2. The names and locations of polling places and the times they are open
3. A true and complete copy of the title and text of the proposed alternative expenditure limitation
4. The form in which the proposed alternative expenditure limitation will appear on the ballot, the
official title, a descriptive title prepared by the city or town clerk, and the number by which the
alternative expenditure limitation will be designated
5. A summary of estimated total expenditures under the proposed alternative expenditure limitation for
a period of 4 consecutive fiscal years, as reviewed by the Auditor General
6. Any exclusions under the proposed alternative expenditure limitation
7. A summary of the estimated total expenditures under the state-imposed expenditure limitation,
considering constitutionally allowed exclusions, for a period of4 consecutive fiscal years, as reviewed
by the Auditor General
8. A summary of estimated revenue from all sources from which any expenditure limitation shall be
funded, for a period of 4 consecutive fiscal years, as reviewed by the Auditor General
9. A statement that ifthe proposed alternative expenditure limitation is not approved by a majority of the
qualified voters, the state-imposed expenditure limitation will apply to the city or town
10. Arguments for and against the proposed alternative expenditure limitation, or an indication that no
arguments forlagainst were received
Official Ballot
The ballot must be in the form prescribed by A.R.S. 9 19-125, unless more than one alternative expenditure
limitation is to be voted upon. In that case, the ballot must be in a format that enables voters to vote
separately on each proposed alternative expenditure limitation. The official ballot must include the
following information:
1. The official title and number of the proposed alternative expenditure limitation
2. A statement disclosing whether the proposed alternative expenditure limitation to be voted upon was
referred by a person, group, or organization, or the city or town council
3. A descriptive title not to exceed 50 words that includes a summary of the principal provisions of the
proposed alternative expenditure limitation which shall be prepared by the city or town clerk
VOTER-APPROVED EXPENDITURE LIMITATIONS
After the election, the city or town clerk must notify the Auditor General and the Economic Estimates
Commission of the election results as soon as the official canvass is completed.
Detailed instructions for adopting or renewing an alternative expenditure limitation and sample forms may
be obtained from the League of Arizona Cities and Towns.
MODIFIED EXPENDITURE LIMITATIONS
A.R.S. 8 15-1471 allows a community college district to adopt a modified expenditure limitation with the
approval of a majority of the qualified voters in the district. The excess expenditures must be a specified
percentage of the constitutional expenditure limitation. The modified expenditure limitation becomes
effective beginning in the fiscal year immediately following approval and applies for a period of not less
than 2 years, but no more than 7 years. After that time, the constitutional expenditure limitation becomes
effective unless a new modified expenditure limitation is approved. The district board may not authorize
expenditures in excess of the modified expenditure limitation without the approval of a majority of the
qualified voters in the district.
Publicity Pamphlets
A.R.S. § 15-1471 requires a community college district to prepare and print publicity pamphlets presenting
the proposed modified expenditure limitation to bevoted upon and related information in the same manner
as prescribed in A.R.S. $41-563.03. The publicity pamphlets must include the following information:
1. The date of the election
2. The names and locations of polling places and the times they are open
3. A true and complete copy of the title and text of the proposed modified expenditure limitation
4. The form in which the proposed modified expenditure limitation will appear on the ballot, the official
title, the descriptive title prepared by the district board and the number by which the modified
expenditure limitation will be designated
5. A summary of estimated total budgeted expenditures under the proposed modified expenditure
limitation for each fiscal year subject to the modified expenditure limitation
6. A summary of estimated total budgeted expenditures under the state-imposed expenditure limitation,
considering constitutionally allowed exclusions, for each fiscal year subject to the modified
expenditure limitation
7. A summary of estimated revenue from all sources from which any expenditure limitation shall be
funded
8. A statement that if the proposed modified expenditure limitation is not approved by a majority of the
qualified voters, the state-imposed expenditure limitation will apply to the community college district
9. Arguments for and against the proposed modified expenditure limitation, or an indication that no
arguments forlagainst were received
VOTER-APPROVED EXPENDITURE LIMITATIONS
One copy of the publicity pamphlet must be mailed to each registered voter not less than ten days before
the election.
Official Ballot
The ballot must be in the form prescribed by A.R.S. 519-125, unless more than one modified expenditure
limitation is to be voted upon. In that case, the ballot must be in a format that enables voters to vote
separately on each proposed modified expenditure limitation. The official ballot must include the
following information:
1. The official title and number of the proposed modified expenditure limitation
2. A statement that the proposed modified expenditure limitation is being referred by the district board
3. A descriptive title not to exceed 50 words that includes a summary of the principal provisions of the
modified expenditure limitation, which shall be prepared by the district board
A copy of the election results should be provided to the Auditor General and Economic Estimates
Commission as soon as the official canvass is completed.
REPORTING INSTRUCTIONS
CONTENTS
Topic
COUNTIES
GENERAL INFORMATION ...................................................... VI- 1
ANNUAL EXPENDITURE LIMITATION REPORT (AELR+RECONCILIATION . . . . . . . . . VI-1
ANNUAL EXPENDITURE LIMITATION REPORT (AELRbPART I1 . . . . . . . . . . . . . . . . . . . VI-4
ANNUAL EXPENDITURE LIMITATION REPORT (AELRFPART I . . . . . . . . . . . . . . . . . . . . VI- 10
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI- 11
FORMS:
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-13
Annual Expenditure Limitation Report-Part I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-14
Annual Expenditure Limitation Report-Part I1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI- 15
Annual Expenditure Limitation Report-Reconciliation ........................... VI-16
Notes to Annual Expenditure Limitation Report ................................. VI- 17
REPORTING INSTRUCTIONS COUNTIES
GENERAL INFORMATION
Arizona Revised Statutes (A.R.S.) $41-1279.07 requires counties to prepare an Annual Expenditure Limitation
Report (AELR). In addition, annual financial statements must be prepared in accordance with generally
accepted accounting principles. On the AELR, total expenditures/expenses and applicable other financing uses
reported in the general purpose financial statements less expenditures/expenses made with constitutionally
excludable revenues is compared for compliance with the expenditure limitation.
Both the AELR and the financial statements must be filed with the Auditor General within four months after
the close of each fiscal year. Upon written request, the Auditor General may grant up to a 120-day extension
if extenuating circumstances exist.
The Auditor General, another certified public accountant, or a public accountant must render an opinion on
whether the AELR presents fairly, in all material respects, the information required by the Unifornt
Expenditure Reporting System (UERS) prescribed by A.R.S. $4 1 - 1279.07. A sample of an independent
auditors' report containing an unqualified opinion is provided on page VI-13. If the auditor concludes that an
unqualified opinion on the AELR cannot be expressed, the auditor should disclose all the substantive reasons
for the conclusion in an explanatory paragraph in the auditors' report. In addition, if the auditors' report on
the general purpose financial statements departs from the standard report, the auditors must disclose the
departure in the introductory paragraph of the auditors' report on the AELR.
A.R.S. $4 1-1279.07 also requires counties to provide to the Auditor General by July 3 1 of each fiscal year the
name of the chief fiscal officer designated by the board of supervisors to submit the AELR and certify its
accuracy for that fiscal year. Any replacement of the designated individual should be reported to the Auditor
General immediately.
Detailed instructions for preparing the AELR are contained on pages VI-1 through VI-12 and sample forms
are provided on pages VI-14 through VI-19. General information concerning annual financial statements is
contained on pages VI- 1 1 and - 12.
Expenditures/expenses are reported in annual financial statements in accordance with generally accepted
accounting principles (GAAP). However, adjustments to these amounts must be made to arrive at the amounts
to be reported on the AELR-Part 11. Therefore, a Reconciliation must be prepared. A copy of the form is
provided on page VI- 16.
Detailed instructions for preparing the Reconciliation are as follows:
Step 1. Enter the name of the county and the fiscal year of the report.
Step 2. On line A, enter expenditures/expenses and applicable other financing uses reported within the
general purpose financial statements for the six fund types listed. These amounts should be
obtained from the appropriate lines on the Combined Statement of Revenues, Expenditures, and
Changes in Fund Balances, and the total operating expenses line plus nonoperating expenses on
the Combined Statement of Revenues, Expenses, and Changes in Retained Earnings. (Note:
transfers should not be included on line A).
REPORTING INSTRUCTIONS COUNTIES
Agency funds are not listed as a fund type on the Reconciliation or Part 11, since they are custodial
in nature and do not involve the measurement of revenues or expenditures/expenses.
Internal service funds are not listed as a fund type on the Reconciliation or Part I1 to facilitate
recording internal service fund expenses only once (i.e., expenditures/expenses should be recorded
in the fund using the goods or services). Any excess or deficiency between amounts charged to
the user funds and amounts recorded as expenses in the internal service funds should be shown as
adjustments in the user funds on line B.7 or line C.3, respectively, of the Reconciliation.
Fund type totals on line A should be added to calculate total expenditures/expenses.
Step 3. Calculate total deductions from expenditures/expenses reported within the general purpose
financial statements. Deductions are items recorded in the general purpose financial statements
prepared in accordance with GAAP that are not subject to the expenditure limitation.
Line B. 1 For enterprise and nonexpendable trust funds only, enter the amount of expenses not
requiring the use of working capital. Deductible expenses would include
depreciation, loss on disposal of capital assets, and bad debt expense.
In addition, for enterprise funds only, the amount of estimated total current cost of
landfill closure and postclosure care recognized in the current period may be
deducted here. See Governmental Accounting Standards Board (GASB) Statement
No. 18 for information on landfill closure and postclosure care costs.
Line B.2 Enter expenditures of separate legal entities established under Arizona Revised
Statutes (e.g., special assessment districts that were not included in the base limit, and
municipal property corporations included within the reporting entity).
Line B.3 Enter contributions to fire districts.
Line B.4 Enter community college reimbursement payments made by the state on behalf of the
county pursuant to A.R.S. $15-1469.01.
Line B.5 Enter long-term care contributions paid from transaction privilege taxes withheld by
the State Treasurer for payment to the Arizona Long-Term Care System. Such
amounts may be deducted if the county reported a revenue and an offsetting
expenditure in the general purpose financial statements.
Line B.6 For governmental and expendable trust funds only, enter the present value of net
minimum capital lease and installment purchase contract payments recorded as
expenditures at the inception of the agreements.
Line B.7 Enter charges to other funds in excess of internal service fund expenses. Such excess
may be allocated among the fund types shown on the Reconciliation using a rational
and systematic method. This deduction should be calculated on the same basis as the
original charges to other funds, and should be calculated consistently between fiscal
years. See GASB CodiJication of Governniental Accounting and Financial
Reporting Standards, 9 1800 for information on internal service fund transactions.
REPORTING INSTRUCTIONS COUNTIES
Line B.8 Enter the amount of involuntary court judgments. If an expenditure is involuntary
because it is a court judgment arising from a tortious act, it is not subject to the
expenditure limitation and may be deducted on the Reconciliation. However, court
judgments arising from a contract are voluntary and, as such, are subject to the
expenditure limitation and should not be deducted. See Attorney General Opinion
186-03 1 for further information.
Blank lines are provided for any items that qualify as allowable deductions that are
not listed on the Reconciliation.
Line B.9 Calculate total deductions for each fund type by adding lines B.l through B.8. Fund
type totals calculated on line B.9 should be added to arrive at total deductions.
Step 4. Calculate total additions to expenditures/expenses reported within the general purpose financial
statements. Additions are items that required the use of financial resources but were not recorded
as expenditures/expenses in the general purpose financial statements prepared in accordance with
GAAP. Additions also include certain internal service fund transactions.
Line C.l For enterprise and nonexpendable trust funds only, enter principal payments on
long-term debt.
Line C.2 For enterprise and nonexpendable trust funds only, enter amounts paid for the
acquisition of capital assets.
Line C.3 Enter internal service fund expenses not charged to other funds. Such expenses may
be allocated among the fund types shown on the Reconciliation using a rational and
systematic method. This addition should be calculated on the same basis as the
original charges to other funds, and should be calculated consistently between fiscal
years. See GASB Codification, $1800 for information on internal service fund
transactions.
Line C.4 For enterprise funds only, enter cash outlays made at or near the end of the life of the
landfill for closure and postclosure care costs, to the extent that such cash outlays
were recorded as expenses in prior periods. See GASB Statement No. 18 for
information on landfill closure and postclosure care costs.
Blank lines are provided for any items that qualify as additions that are not listed on
the Reconciliation.
Line C.5 Calculate total additions for each fund type by adding lines C.l through C.4. Fund
type totals calculated on line C.5 should be added to arrive at total additions.
Step 5. On line D, calculate the amounts to be reported on Part 11, line A by deducting the amount on line
B.9 from the amount on line A and adding the amount on line C.5.
A note to the AELR should be presented for each deduction or addition that cannot be agreed directly to an
amount recorded in the general purpose financial statements. Each note must be in sufficient detail to properly
disclose the nature of the addition or deduction. Reference to the note should be included in the Description
column of the Reconciliation. Examples of frequently used notes are provided on page VI-19.
REPORTING INSTRUCTIONS COUNTIES
AELR-PART I1
Arizona Constitution, Article IX, $20 excludes certain revenues from the definition of local revenues, and only
expenditureslexpenses made with local revenues are subject to the expenditure limitation. Therefore, to arrive
at the amount subject to the expenditure limitation to be reported on the AELR-Part I, it is necessary to
exclude from total expenditureslexpenses, as adjusted on the Reconciliation, the expenditureslexpenses made
with these excludable revenues. The AELR-Part I1 facilitates this calculation. A copy of the form is
provided on page VI-15.
Detailed instructions for preparing Part I1 are as follows:
Step 1. Enter the name of the county and the fiscal year of the report.
Step 2. On line A, enter the amount for each fund type and the total for all funds from line D of the
Reconciliation.
Step 3. Determine exclusions from local revenues as provided in the Arizona Constitution, Article IX, $20.
The exclusion provided in the Arizona Constitution, Article IX, $20, subsections 3(d)(xii) has
expired. Therefore, a line for this exclusion has not been provided on Part 11.
Lines B.l through B.12 list constitutional exclusions that may be taken. Line B.13 lists an
exclusion that may be taken as a result of an Attorney General opinion. Explanations and examples
of the exclusions follow.
Line B. 1 "Any amounts or property received from the issuance or incurrence of bonds or other
lawful long-term obligations issued or incurred for a specific purpose, or collected
or segregated to make payments or deposits required by a contract concerning such
bonds or obligations. For the purpose of this subdivision long-term obligations shall
not include warrants issued in the ordinary course of operation or registered for
payment, by a political subdivision."
Bond ~roceeds-Exclude expenditureslexpenses made from amounts received from
the issuance of bonds (e.g., general obligation or revenue bonds), including payments
to registrars and paying agents. Proceeds from bonds of special assessment districts
may be excluded if expenditures from these proceeds have not already been deducted
on the reconciliation. (See page VI-2 for information on related deduction.)
Debt service reauirements on bonded indebtedness-Exclude expenditureslexpenses
made to pay principal and interest on outstanding bonds. Amounts paid into sinking
funds that are expenditureslexpenses of the reporting fiscal year may also be
excluded.
Proceeds from other lonp-term oblipations-Exclude expenditureslexpenses made
from amounts received from the issuance of lawful long-term obligations including
payments to registrars and paying agents. The long-term obligation must have a
maturity date of more than one year and must be incurred for a specific purpose.
REPORTING INSTRUCTIONS COUNTIES
Exclude expenditureslexpenses from proceeds of certificates of participation (COPS)
issued in the name of the entity. See page VI-2 for treatment of
expenditureslexpenses from COP proceeds issued by a municipal property
corporation included in the county reporting entity.
Debt service requirements on other long-term obligations-Exclude expenditures1
expenses made for principal and interest on other long-term obligations (e.g., capital
lease agreements, installment purchase agreements, and certificates of participation).
Payments made pursuant to contracts, including operating leases, are not excludable
under long-term obligations as the county has not incurred a long-term liability.
It should be noted that revenues from the sale of fixed assets purchased with the
proceeds from bonds or other long-term obligations are not excludable revenues since
the original proceeds used to purchase the assets were excluded in the fiscal years the
assets were purchased.
Line B.2 "Any amounts or property received as payment of dividends or interest, or any gain
on the sale or redemption of investment securities, the purchase of which is
authorized by law."
Exclude expenditureslexpenses made from amounts received as interest from
investments or delinquent taxes, dividends, and gains on sales or redemptions of
investment securities.
Line B.3 "Any amounts or property received by a political subdivision in the capacity of
trustee, custodian or agent."
Agency funds account for assets belonging to other funds, governments, individuals,
or private organizations. They are custodial in nature and do not involve the
measurement of revenues or expenditures/expenses. Disbursements of agency funds
should not be included in the amounts recorded on line A and, therefore, are not
excludable.
Expenditures made from amounts received in a trust fund may be excluded, as the
revenues are held by the county for the benefit of other entities (e.g., expenditures
from the Special Services Fund, as provided in A.R.S. $3 1-13 1 ; and expenditures
from amounts deposited in the County Anti-Racketeering Revolving Fund by other
governmental entities pursuant to A.R.S. $13-23 14.03(C), as provided in Attorney
General Opinion 190-0 13 dated February 13, 199 1).
Expenditures of monies received from federal, state, and private sources in a
custodial capacity for the operation of charter schools that are separate legal entities
included within the reporting entity may be excluded here. (See pages VI-6 and VI-9
for information on exclusions for charter schools that are not separate legal entities.)
Contributions made to the Arizona Health Care Cost Containment System
(AHCCCS) from the levy of taxes may also be excluded. Contributions to the
REPORTING INSTRUCTIONS COUNTIES
Arizona Long-Tern Care System may not be excluded; however, such contributions
may be deducted on the Reconciliation. See page VI-2.
Line B.4 "Any amounts received as grants and aid of any type received from the federal
government or any of its agencies."
Exclude expenditures/expenses made from amounts received as grants, cooperative
agreements, entitlements, contracts, payments in lieu of taxes, or asset-sharing from
the federal government (e.g., expenditures from reimbursements received from
Medicare).
Expenditures from federal revenues for the operation of charter schools that are not
separate legal entities are also excludable here. (See page VI-5 for exclusion for
charter schools that are separate legal entities.)
Line B.5 "Any amounts received as grants, aid, contributions or gifts of any type except
amounts received directly or indirectly in lieu of taxes received directly or indirectly
from any private agency or organization or any individual."
Expenditures/expenses made from amounts received as grants, aid, contributions,
donations, or gifts from private donors may be excluded.
Expenditures from private donations or gifts for the operation of charter schools that
are not separate legal entities are also excludable here. (See page VI-5 for exclusion
for charter schools that are separate legal entities.)
Line B.6 "Any amounts received from the state which are included within the appropriation
limitation prescribed in 8 17 of this article."
Exclude expenditures/expenses made from any amounts received from the state or
collected by or for the state and shared with the county that were included within the
state appropriation limitation (e.g., expenditures/expenses of restricted state grants;
expenditures of lottery monies pursuant to Laws 1986, Chapter 382,§5; expenditures
of lottery monies from the Local Transportation Assistance Fund received pursuant
to A.R.S. 828-2602; expenditures of Judicial Collection Enhancement Fund monies
returned by the state treasurer pursuant to A.R.S. $12-1 13; expenditures of the
portion of motor vehicle license tax revenues deposited in the county assessors
special fund pursuant to A.R.S. 828-1591; expenditures of the portion of motor
vehicle registration fees deposited in the county assessors special fund pursuant to
A.R.S. $28-301 ; expenditures of hotel excise taxes pursuant to A.R.S. $42- 1496; and
expenditures of appropriations received from the Street Gang Enforcement Revolving
Fund pursuant to A.R.S. $41-191.07.)
Exclusions should not include expenditures from monies received from the state or
collected by or for the state and shared with the county that are not included within
the state appropriation limitation (e.g., liquor license fees, state transaction privilege
tax (sales tax), severance tax, the portion of motor vehicle license tax deposited in the
REPORTING INSTRUCTIONS COUNTIES
county general fund, the portion of the time payment fee retained by the local court
pursuant to A.R.S. $ 12-1 16).
Revenues from the Highway User Revenue Fund are not included in the definition
of amounts received from the state, as provided in Arizona Constitution, Article IX,
$ 17. However, Arizona Constitution, Article IX, $20, subsection 3(d)(ix) provides
an exclusion for expenditures of highway user revenues. See line B.9 for instructions
concerning this exclusion.
Line B.7 "Any amounts received pursuant to a transfer during a fiscal year from another
agency, department, office, board, commission, authority, council or institution ofthe
same political subdivision which were included as local revenues for such fiscal year
or which are excluded from local revenue under other provisions of this section."
Exclude expenditures/expenses made from revenues received due to quasi-external
intefind transactions recorded in the general purpose financial statements in funds
other than internal service funds. Quasi-external interfund transactions are
transactions between funds of a county that are recorded as if the transaction was
with an entity external to the county. (See GASB Cod., $1800 for further
information on recording quasi-external intefind transactions.) This exclusion may
only be taken in the fund in which the revenue is recorded. An example of such a
transaction is payments made from the enterprise fund to the general fund in lieu of
taxes. The exclusion should be claimed in the general fund, as the revenue would be
recorded in this fund.
Interfund transfers are not excludable, as they do not represent revenues and
expenditures of the county.
This exclusion should not be used for internal service fund transactions, as these
transactions should be shown as adjustments on either line B.7 or line C.3 of the
Reconciliation.
Line B.8 "Any amounts or property accumulated for the purpose of purchasing land, buildings
or improvements or constructing buildings or improvements, if such accumulation
and purpose have been approved by the voters of the political subdivision."
Exclude expenditures/expenses made from amounts accumulated if voter approval
was obtained to accumulate the amounts and make the expenditures. Expenditures
of transportation excise tax monies may be excludable here pursuant to Laws 1985,
Chapter 308, $34.
It sheu!d be neted that revenues f r ~ mth e sa!e ~f capita! assets purchased with
amounts accumulated for such items are not excludable revenues, since the original
amounts used to purchase the assets were excluded in the fiscal years the assets were
purchased.
Line B.9 "Any amounts received pursuant to $14 of this article which are greater than the
amount received in fiscal year 1979-1980."
REPORTING INSTRUCTIONS COUNTIES
Exclude expenditures from highway user revenues received in the reporting fiscal
year in excess of amounts actually received in fiscal year 1979-80. The following
examples illustrate the calculation of this exclusion.
Example 1
If carryforwards are maximized:
Highway user revenues received in the current fiscal year $500,000
Highway user revenues received in the current fiscal year equal to fiscal
year 1979-80 revenues received (200.000)
Revenues available for exclusion in the current fiscal year $300.000
Actual expenditures of highway user revenues in the current fiscal year $450,000
Amount equal to 1979-80 revenues expended in the current fiscal year (200.000)
Excludable revenues expended in the current fiscal year $250.000
Revenues available for exclusion in the current fiscal year $300,000
Revenues expended and claimed as an exclusion in the current fiscal year (250.000)
Unspent excludable revenue available for carryforward in future years $ 50.000
Examnle 2
If exclusions are maximized:
Highway user revenues received in the current fiscal year $500,000
Highway user revenues received in the current fiscal year equal to fiscal
year equal to 1979-80 revenues received (200.000)
Revenues available for exclusion in the current fiscal year $300.000
Actual expenditures of highway user revenues in the current fiscal year $450,000
Amount equal to 1979-80 revenues expended in the current fiscal year (1 50.000')
Excludable revenues expended in the current fiscal year $300.000
Revenues available for exclusion in the current fiscal year $300,000
Revenues expended and claimed as an exclusion in the current fiscal year (300.000)
Unspent excludable revenue available for carryforward in future years u
Line B. 10 "Any amounts received in return for goods or services pursuant to a contract with
another political subdivision, school district, community college district or the state,
and expended by the other political subdivision, school district, community college
district or the state pursuant to the expenditure limitation in effect when the amounts
are expended by the other political subdivision, school district, community college
district or the state."
Exclude expenditures/expenses made from revenues received in return for goods or
services pursuant to a contract with another governmental entity conforming to
general contract laws (e.g., expenditures from amounts received as a result of a
contract between the county and the state for housing state prisoners; expenditures
REPORTING INSTRUCTIONS COUNTIES
from reimbursements received as a result of a contract between the county and
AHCCCS).
Expenditures from amounts received pursuant to a contract with the State Board of
Education or State Board for Charter Schools for the operation of charter schools that
are not separate legal entities may also be excluded here. (See page VI-5 for
exclusions for charter schools that are separate legal entities.)
Line B.ll "Any amounts received during a fiscal year as refunds, reimbursements or other
recoveries of amounts expended which were applied against the expenditure
limitation for such fiscal year or which were excluded from local revenues under
other provisions of this subsection."
Refunds, reimbursements, or other recoveries of revenues expended that are received
during the same fiscal year the related expenditures/expenses are made are generally
accounted for as reductions of those expenditures/expenses, and not as revenues.
Therefore, such receipts are not excludable.
If refunds, reimbursements, or other recoveries of revenues expended, regardless of
the year received, are accounted for as revenues (i.e., recoveries for prosecution and
investigation costs recorded as revenues in the County Anti-Racketeering Revolving
Fund, damage awards, and insurance reimbursements), the expenditures/expenses
from them are excludable.
Line B.12 "Any amounts received collected by the counties for distribution to school districts
pursuant to state law."
Exclude expenditures/expenses made from amounts received for accommodation
schools. Also, exclude expenditures from amounts received for juvenile detention
center and county jail education programs operated through existing accommodation
schools. (Note: expenditures/expenses from amounts received for juvenile
detention center and county jail education programs operated through county
education funds may not be excluded on the AELR since Arizona Revised
Statutes do not expressly exclude such education programs from the
expenditure limitation).
Pursuant to A.R.S. 515-994, counties collect county equalization assistance for
school districts. However, these amounts are not revenues or expenditures of the
county and are not included in the amounts recorded on line A of the reconciliation.
Therefore, these amounts may not be excluded from the expenditure limitation.
Line B.13 Counties may exclude expenditures/expenses of prior years carryforward of
constitutionally excludable revenues (exclusions explained on lines B. 1 through
B. 12), as provided in Attorney General Opinion 188-0 17. Prior years carryforward
is defined as constitutionally excludable revenues unexpended in the year recorded
that are accumulated and eligible for exclusion when expended in subsequent fiscal
years.
REPORTING INSTRUCTIONS COUNTIES
Carryforwards should be specifically identified in the county's accounting records by
fund as to the nature of the exclusion, the amount of the carryforward, and the fiscal
year in which the carryforward was generated.
Line B.14 Calculate total exclusions claimed by adding lines B.l through B.13. Fund type
totals should be added to calculate total exclusions claimed.
Step 4. On line C, deduct the amount on line B.14 from the amount recorded on line A. If the calculated
amount is negative, exclusions must be reduced so the amount is zero or greater. Fund type totals
should then be added to calculate the amounts subject to the expenditure limitation to be reported
on Part I, line 2.
A note to the AELR should be presented for each exclusion that cannot be agreed directly to an amount
recorded in the general purpose financial statements. Each note must be in sufficient detail to enable
identification of the exclusion in the general purpose financial statements and verification of the amount
excluded. Reference to the notes should be included in the Description column on Part 11. Examples of
several frequently used notes are provided on pages VI- 17 through VI- 1 8.
AELR-PART I
The AELR-Part I compares the expenditure limitation and the amount subject to the expenditure limitation
to determine whether the county has exceeded the expenditure limitation. A copy of the form is provided on
page VI- 14.
Detailed instructions for preparing Part I are as follows:
Step 1. Enter the name of the county and the fiscal year of the report.
Step 2. Enter the amount of the Economic Estimates Commission expenditure limitation on line 1.
Step 3. On line 2, enter the amount subject to the expenditure limitation from Part 11, line C.
Step 4. Determine the total adjusted amount subject to the expenditure limitation on line 8.
Arizona Constitution, Article IX, 920(2), lines 3,4,5, and 7 provide for adjustments.
Line 3 Enter the actual amount of expenditureslexpenses made in the reporting fiscal year
that were directly necessitated by a natural or manmade disaster declared by the
Governor. The expenditures/expenses must be authorized by at least two-thirds of
the members of the board of supervisors, as required by Arizona Constitution,
Article IX, 920(2)(a). (Attach supporting documentation.)
Line 4 Enter the actual amount of expenditures/expenses made in the reporting fiscal year
that were directly necessitated by a natural or manmade disaster not declared by the
Governor. The expenditures/expenses must be authorized by at least 70 percent of
the members of the board of supervisors as required by Arizona Constitution,
Article IX, §20(2)(b). (Attach supporting documentation.)
REPORTING INSTRUCTIONS COUNTIES
Line 5 Enter the actual amount of expenditures/expenses in excess of the expenditure
limitation authorized in the prior fiscal year. The amount must be specific and must
be authorized by at least two-thirds of the members of the board of supervisors and
approved by a majority of qualified electors, as required by the Arizona Constitution,
Article IX, $20(2)(c). (Attach supporting documentation.)
Line 6 Subtract lines 3,4, and 5 from line 2.
Line 7 Enter the actual amount of expenditures/expenses made in the prior fiscal year in
excess of the expenditure limitation. The expenditures/expenses must have been
authorized by at least 70 percent of the members of the board of supervisors for
expenditures directly necessitated by a natural or manmade disaster not declared by
the Governor and not approved by a majority of the qualified voters, as required by
the Arizona Constitution, Article IX, $20(2)(b). Total expenditures/expenses for the
reporting fiscal year subject to the expenditure limitation must be increased by this
amount. (Attach supporting documentation.)
Line 8 Add the amount on line 7 to the amount on line 6 to determine the adjusted amount
subject to the expenditure limitation.
Step 5. Deduct the amount on line 8 from the amount on line 1 and record the difference on line 9. If the
difference is a negative number, the county exceeded the expenditure limitation and should submit
a supporting schedule explaining the reason for the excess. If the difference is a positive number
or zero, the county did not exceed the expenditure limitation and a supporting schedule is not
necessary.
Step 6. Enter the name, title, and telephone number of the chief fiscal officer. The chief fiscal officer
should then sign and date the AELR to provide written certification that the AELR is accurate.
FINANCIAL STATEMENTS
As prescribed by A.R.S. $41-1279.07, annual financial statements must be prepared in accordance with
generally accepted accounting principles. These principles are the conventions, rules, and procedures that
define accepted accounting practices at a particular time and provide a standard by which auditors form their
professional opinions about the financial statements.
The Auditor General, another certified public accountant, or a public accountant performing the audit must
render an opinion as to whether the general purpose financial statements present fairly, in all material respects,
the financial position and results of operations in conformity with generally accepted accounting principles.
In addition, the auditor must render an opinion on whether the AELR presents fairly, in all material respects,
the information required by the UERS prescribed by A.R.S. $41-1279.07. See page $VI-1 for further
information on the audit of the AELR.
The GASB Codification of Governntetttal Accotrnting and Financial Reporting Standards promulgates
authoritative accounting and financial reporting guidance for state and local governmental entities. The
American Institute of Certified Public Accountants' (AICPA) Audit and Accounting Guide, Audits of State
REPORTING INSTRUCTIONS COUNTIES
and Local Governnzental Units should be used as a source for illustrations of the accounting and reporting
requirements set forth in the GASB Codification.
Pro forma general purpose financial statements and notes for counties are issued annually by the Office of the
Auditor General. For further information on preparing financial statements, counties should refer to the
Uniform Accounting Manual for Arizona Counties (UAMAC) published by the Office of the Auditor General.
REPORTING INSTRUCTIONS COUNTIES
Independent Auditors7 Report
The Auditor General of the State of Arizona and
The Board of Supervisors
of County, Arizona
We have audited the general purpose financial statements of County as of and for the
year ended June 30, 19-, and have issued our separate report thereon dated . (Describe any
departure from the standard report.) We have also audited the accompanying Annual Expenditure
Limitation Report of County for the year ended June 30, 19-. 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 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 generally accepted accounting principles.
In our opinion, the Annual Expenditure Limitation Report of County for the year
ended June 30, 19-, 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 filing with the State of Arizona and should not be used for any other purpose.
Last day of fieldwork
(Signature)
REPORTING INSTRUCTIONS COUNTIES
COUNTY
Annual Expenditure Limitation Report-Part I
Year Ended June 30,19-
1. Economic Estimates Commission expenditure limitation
2. Amount subject to the expenditure limitation (total amount
from Part 11, Line C)
3. Board-authorized expenditures necessitated by a disaster
declared by the Governor (Article IX, $20[2][a], Arizona
Constitution) -
4. Board-authorized expenditures necessitated by a disaster not
declared by the Governor (Article IX, $20[2][b], Arizona
Constitution) -
5. Prior-year voter-approved expenditures to exceed the
expenditure limitation for the reporting fiscal year (Article IX,
$20[2][c], Arizona Constitution) -
6. Subtotal $
7. Board-authorized excess expenditures for the previous fiscal
year not declared by the Governor and not approved by the
voters (Article IX, §20[2][b], Arizona Constitution) +
8. Total adjusted amount subject to the expenditure limitation $
9. Amount under (in excess of) the expenditure limitation (If
excess expenditures are reported, provide an explanation.) $
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:
Telephone Number: Date:
See accompanying notes to report.
REPORTING INSTRUCTIONS COUNTIES
Description
A. Amounts reported on the
Reconciliation, Line D
B. Less exclusions claimed:
1. Bond proceeds
Debt service requirements on
bonded indebtedness
Proceeds from other long-term
obligations
Debt service requirements on
other long-term obligations
2. Dividends, interest, and gains
on the sale or redemption of
investment securities
3. Trustee or custodian
4. Grants and aid from the federal
government
5. Grants, aid, contributions, or
gifts from a private agency,
organization, or individual
except amounts received in lieu
of taxes
6. Amounts received from the
state
7. Quasi-external interfund
transactions
8. Amounts accumulated for the
purchase of land, and the
purchase or construction of
buildings or improvements
9. Highway user revenues in
excess of those received in
fiscal year 1979-80
10. Contracts ~vitho ther political
subdivisions
11. Refunds, reimbursements, and
other recoveries
12. Amounts received for
distribution to school districts
13. Prior years caqfonvard
14. Total exclusions claimed
C. Amounts subject to the expenditure
limitation (If an individual fund
type amount is negative, reduce
exclusions claimed to net to zero.)
COUNTY
Annual Expenditure Limitation Report-Part I1
Year Ended June 30,19-
S~ecial Debt Ca~ital
General ~dvenue Service projects Trust Enterprise Total
Fund Funds Funds Funds - Funds Funds -
See accompanying notes to report.
REPORTING INSTRUCTIONS COUNTIES
COUNTY
Annual Expenditure Limitation Report-Reconciliation
Year Ended June 30,19-
Special
General Revenue
Description Fund Funds
A. Total expenditures/expenses and
applicable other financing uses
reported within the general purpose
financial statements $ $
B. Deductions:
1. Items not requiring use of working
capital:
Depreciation
Loss on disposal of capital assets
Bad debt expense
Landfill closure and postclosure
Debt Capital
Service Projects Trust
Funds -Funds -Funds Enterprise Total
Funds -
care costs
2. Expenditures of separate legal
entities established under Arizona
Revised Statutes (A.R.S.)
3. Contributions to fire districts
4. Community college
reimbursement payments pursuant
to A.R.S. $15-1469.01
5. Long-term care contributions
withheld by the State Treasurer
6. Present value of net minimum
capital lease and installment
purchase contract payments
recorded as expenditures at
inception of the agreements
7. Charges to other funds in excess
of Internal Service Fund expenses
8. Involuntary court judgments
9. Total deductions
C. Additions:
1. Principal payments on long-term
debt
2. Acquisition of capital assets
3. Internal Service Fund expenses
not charged to other funds
4. Landfill closure and postclosure
care costs recorded as expended in
previous years
5. Total additions
D. Amounts reported on Part 11, Line A
See accompanying notes to report.
REPORTING INSTRUCTIONS COUNTIES
COUNTY
Notes to Annual Expenditure Limitation Report
Year Ended June 30,19-
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
$4 1 - 1279.07, which excludes expenditures/expenses of certain revenues specified in the Arizona
Constitution, Article IX, $20 from the total expenditures/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 I1 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 Funds for the
General, Special Revenue, Debt Service, Capital Projects, or Expendable Trust Funds; and to the
Combined Statement of Revenues, Expenses, and Changes in Retained Earnings (Fund Equity)-All
Proprietary Fund Types for the Enterprise and Internal Service Funds.
Note - The exclusion claimed for debt service requirements on bonded indebtedness in the Debt Service
Funds consists of principal retirement and interest expense.
Note - The exclusion claimed for dividends, interest, and gains on the sale or redeniption of investment
securities of $ in the General Fund includes interest on investments expended of
$ ; interest on delinquent taxes expended of $ , which was recorded as tax
revenue; and dividends expended of $ , which were recorded as miscellaneous revenues.
Remaining revenues of $ , $ , and $ respectively, have been carried
forward to future years.
Note - The exclusion claimed for trustee or custodian consists of $ in contributions by the County
to the Arizona Health Care Cost Containment System for acute care.
Note - The exclusion claimed for trustee or custodian consists of $ expended from federal, state,
and private sources recorded as education expenditures for operation of a charter school that is a
separate legal entity from the County. Remaining revenues of $ have been carried forward
to future years.
Note - This schedule presents revenues from which exclusions have been claimed for federal grants and aid,
amounts received from the state, and highway user revenues in the General and Special Revenue
Funds.
REPORTING INSTRUCTIONS
COUNTY
Notes to Annual Expenditure Limitation Report
Year Ended June 30,19-
COUNTIES
GENERAL FUND SPECLAL REVENUE FUNDS
Amount Amount
Amount Carried
Description
Amount Carried
Revenues Excluded Forward Revenues Excluded Forward
Grants and aid from federal
government LLLLLL
Amounts received from the state
Highway user revenues in excess of
those received in fiscal year
1979-80
Other revenues-(nonexcludable)
Total intergovernmental revenues as
reported in general purpose $$$$$$
financial statements
Note - The exclusion claimed for contracts with other political subdivisions of $ includes
$ of charges for services expended and $ of miscellaneous revenues expended.
Remaining revenues of $ and $ respectively, have been carried forward to future
years.
Note - The exclusion claimed for contracts with other political subdivisions includes expenditures of
$ from state appropriations received pursuant to a contract with the State Board
for the operation of a charter school that is not a separate legal entity
from the County. Remaining revenues of $ have been carried forward to future years.
Note - The exclusion claimed for amounts received for distribution to school districts consists of federal, state,
and county revenues recorded as education expenditures for operation of an accommodation school.
Remaining revenues of $ , $ , and $ respectively, have been carried
fonvard to future years.
Note - Prior years carryfonvard consists of constitutionally excludable revenues unexpended in the year of
receipt that have been accumulated and were expended in the current year as follows.
Special Capital Debt
Description General Revenue Projects Serv~ce
Fund Funds Funds Funds
Dividends, interest, and gains on the sale
of securities $$$f
Grants and aid from federal government
Amounts received from the state
Highway user revenues in excess of those
received in fiscal year 1979-80
Total prior years carryfonvard
expended $$$$
VI-18
REPORTING INSTRUCTIONS COUNTIES
COUNTY
Notes to Annual Expenditure Limitation Report
Year Ended June 30,19-
Note - The deduction of $ for separate legal entities established under Arizona Revised
Statutes consists of expenditures of special assessment districts/municipal property corporations
included within the County's reporting entity but not included in the Economic Estimates
Commission base limit calculations, and are reported in the following categories in the general
purpose financial statements:
Special Capital Debt Service
General Fund Revenue Funds Projects Funds Funds
S~eciaAl ssessment Districts
General government $$$$
Capital outlay
Principal retirement
Interest and fiscal charges
Total $$$$
Munici~aPl ropertv Cornorations
General government $$$$
Capital outlay
Principal retirement
Interest and fiscal charges
Total $$-$
Note - 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 offsetting expenditure in the County's general
purpose financial statements. Consequently, this expenditure has been deducted on the
Reconciliation.
Note - The addition of $ for principal payments on long-term debt in the Enterprise Funds consists
of (list the total amount of principal payments for each long-term debt item).
REPORTING INSTRUCTIONS
CONTENTS
CITIES AND TOWNS
Topic .mS
GENERAL INFORMATION ...................................................... VII- 1
ANNUAL EXPENDITURE LIMITATION REPORT (AELR>-RECONCILIATION . . . . . . . . . VII-2
ANNUAL EXPENDITURE LIMITATION REPORT (AELRFPART I1 . . . . . . . . . . . . . . . . . . . VII-4
ANNUAL EXPENDITURE LIMITATION REPORT (AELRFPART I . . . . . . . . . . . . . . . . . . . . VII- 10
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII- I1
FORMS:
Independent Auditor's Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII- 12
Annual Expenditure Limitation Report-Part I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-13
Annual Expenditure Limitation Report-Part I1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-14
Annual Expenditure Limitation Report-Reconciliation ........................... VII- 15
Notes to Annual Expenditure Limitation Report ................................. VII- 16
VII
REPORTING INSTRUCTIONS CITIES AND TOWNS
GENERAL INFORMATION
Arizona Revised Statutes (A.R.S.) 541-1279.07 requires incorporated cities and towns to prepare an Annual
Expenditure Limitation Report (AELR). In addition, financial statements must be prepared in accordance with
generally accepted accounting principles. On the AELR, total expenditures/expenses and applicable other
financing uses reported in the general purpose financial statements less expenditures/expenses made with
constitutionally excludable revenues is compared for compliance with the expenditure limitation.
In accordance with A.R.S. 59-481, cities are required to have financial statement audits performed annually.
Towns subject to the Single Audit Act Amendments of 1996 must also have financial statement audits
performed annually. All other towns may have financial statement audits performed either annually or
biennially, as specified in A.R.S. $9-481. These audits must be performed by a certified public accountant
or a public accountant currently licensed by the Arizona State Board of Accountancy.
Cities and towns having annual audits are required to file with the Auditor General an AELR, an auditors'
report on the AELR, and audited financial statements within four months after the close of each fiscal year.
Towns having biennial audits are also required to file an AELR within four months after the close of each
fiscal year, but are not required to file an auditors' report on the AELR or audited financial statements for the
interim fiscal year. When the biennial audit is performed, auditors' reports on the AELRs of both fiscal years
and the audited financial statements must be filed within four months after the close of the last fiscal year of
the biennial audit. Upon written request, the Auditor General may grant up to a 120-day filing extension if
extenuating circumstances exist.
Arizona Constitution, Article IX, §20(9) allows a city or town to adopt an alternative expenditure limitation,
with the approval of a majority of the qualified voters. Approval of an alternative expenditure limitation must
occur prior to the first fiscal year in which it applies. Alternative expenditure limitations apply for four
succeeding fiscal years, after which the state-imposed expenditure limitation becomes effective, unless a new
alternative expenditure limitation is adopted. If an alternative expenditure limitation is not adopted by a
majority of the qualified voters, the state-imposed expenditure limitation applies and no new alternative
expenditure limitations may be submitted to the voters for at least two years. See §V for detailed information
on alternative expenditure limitations.
The independent auditors' report on the AELR must express an opinion on whether the AELR presents fairly,
in all material respects, the information required by the Uniform Expenditure Reporting System (UERS)
prescribed by A.R.S. 541-1279.07. A sample of an independent auditors' report containing an unqualified
opinion for cities or towns is provided on page VII-12. If the auditor concludes that an unqualified opinion
on the AELR cannot be expressed, the auditor should disclose all the substantive reasons for the conclusion
in an explanatory paragraph in the auditors' report. In addition, if the auditors' report on the general purpose
financial statements departs from the standard report, the auditors must disclose the departure in the
introductory paragraph of the auditors' report on the AELR.
A.R.S. 541-1279.07 also requires cities and towns to provide to the Auditor General by July 3 1 of each fiscal
year the name of the chief fiscal officer designated by the governing board to submit the AELR and certify its
accuracy for that fiscal year. Any replacement of the designated individual must be reported to the Auditor
General immediately.
REPORTING INSTRUCTIONS CITIES AND TOWNS
Detailed instructions for preparing the AELR are contained on pages VII-2 through VII-11 and sample forms
are provided on pages VII-13 through VII-18. General information concerning financial statements is
contained on page VII- 1 1.
Expenditures/expenses are reported in financial statements in accordance with generally accepted accounting
principles (GAAP). However, adjustments to these amounts must be made to arrive at the amounts to be
reported on the AELR-Part 11. Therefore, a Reconciliation must be prepared. A copy of the form is provided
on page VII- 1 5.
Detailed instructions for preparing the Reconciliation are as follows:
Step 1. Enter the name of the city or town and the fiscal year of the report.
Step 2. On line A, enter expenditures/expenses and applicable other financing uses reported within the
general purpose financial statements for the six fund types listed. These amounts should be
obtained from the appropriate lines on the Combined Statement of Revenues, Expenditures, and
Changes in Fund Balances, and the total operating expenses line plus nonoperating expenses on
the Combined Statement of Revenues, Expenses, and Changes in Retained Earnings. (Note:
transfers should not be included on line A).
Agency funds are not listed as a fund type on the Reconciliation or Part 11, since they are custodial
in nature and do not involve the measurement of revenues or expenditures/expenses.
Internal service funds are not listed as a fund type on the Reconciliation or Part I1 to facilitate
recording internal service fund expenses only once (i.e., expenditures/expenses should be recorded
in the fund using the goods or services). Any excess or deficiency between amounts charged to
the user funds and amounts recorded as expenses in the internal service funds should be shown as
adjustments in the user funds on line B.4 or line C.3, respectively, of the Reconciliation.
Fund type totals on line A should be added to calculate total expenditures/expenses.
Step 3. Calculate total deductions from expenditures/expenses reported within the general purpose
financial statements. Deductions are items recorded in the general purpose financial statements
prepared in accordance with GAAP that are not subject to the expenditure limitation.
Line B. 1 For enterprise and nonexpendable trust funds only, enter the amount of expenses not
requiring the use of working capital. Deductible expenses would include
depreciation, loss on disposal of capital assets, and bad debt expense.
In addition, for enterprise funds only, the amount of estimated total current cost of
landfill closure and postclosure care recognized in the current period may be
deducted here. See Governmental Accounting Standards Board (GASB) Statement
No. 18 for information on landfill closure and postclosure care costs.
REPORTING INSTRUCTIONS CITIES AND TOWNS
Line B.2 Enter expenditures of separate legal entities established under Arizona Revised
Statutes (e.g. special assessment districts that were not included in the base limit, and
municipal property corporations included within the reporting entity.)
Line B.3 For governmental and expendable trust funds only, enter the present value of net
minimum capital lease and installment purchase contract payments recorded as
expenditures at the inception of the agreements.
Line B.4 Enter charges to other funds in excess of internal service fund expenses. Such excess
may be allocated among the fund types shown on the Reconciliation using a rational
and systematic method. This deduction should be calculated on the same basis as the
original charges to other funds, and should be calculated consistently between fiscal
years. See GASB Codification of Governnrental Accozirztiirg and Financial
Reporting Standards, $1800 for information on internal service fund transactions.
Line B.5 Enter the amount of involuntary court judgments. If an expenditure is involuntary
because it is a court judgment arising from a tortious act, it is not subject to the
expenditure limitation and may be deducted on the Reconciliation. However, court
judgments arising from a contract are voluntary and, as such, are subject to the
expenditure limitation and should not be deducted. See Attorney General Opinion
186-03 1 for further information.
Blank lines are provided for any items that qualify as allowable deductions that are
not listed on the Reconciliation.
Line B.6 Calculate total deductions for each fund type by adding lines B. 1 through B.5. Fund
type totals calculated on line B.6 should be added to arrive at total allowable
deductions.
Step 4. Calculate total additions to expenditures/expenses reported within the general purpose financial
statements. Additions are items that required the use of financial resources but were not recorded
as expenditures/expenses in general purpose financial statements prepared in accordance with
GAAP. Additions also include certain internal service fund transactions.
Line C.l For enterprise and nonexpendable trust funds only, enter principal payments on
long-term debt.
Line C.2 For enterprise and nonexpendable trust funds only, enter amounts paid for the
acquisition of capital assets.
Line C.3 Enter internal service fund expenses not charged to other funds. Such expenses may
be allocated among the fund types shown on the Reconciliation using a rational and
systematic method. This addition should be calculated on the same basis as the
original charges to other funds, and should be calculated consistently between fiscal
years. See GASB Codification, $1800 for information on internal service fund
transactions.
REPORTING INSTRUCTIONS CITIES AND TOWNS
Line C.4 For enterprise funds only, enter cash outlays made at or near the end of the life of the
landfill for closure and postclosure care costs, to the extent that such cash outlays
were recorded as expenses in prior periods. See GASB Statement No. 18 for
information on landfill closure and postclosure care costs.
Blank lines are provided for any items that qualify as additions that are not listed on
the Reconciliation.
Line C.5 Calculate total additions for each fund type by adding lines C. 1 through C.4. Fund
type totals calculated on line C.5 should be added to arrive at total additions.
Step 5. On line D, calculate the amounts to be reported on Part 11, line A by deducting the amount on line
B.6 from the amount on line A and adding the amount on line C.5.
A note to the AELR should be presented for each deduction or addition that cannot be agreed directly to an
amount recorded in the general purpose financial statements. Each note must be in sufficient detail to properly
disclose the nature of the addition or deduction. Reference to the note should be included in the Description
column of the Reconciliation. Examples of frequently used notes are provided on page VII- 17 and - 18.
AELR-PART I1
Arizona Constitution, Article IX, $20 excludes certain revenues from the definition of local revenues, and only
expenditures/expenses made with local revenues are subject to the expenditure limitation. Therefore, to arrive
at the amount subject to the expenditure limitation to be reported on the AELR-Part I, it is necessary to
exclude from total expenditures/expenses, as adjusted on the Reconciliation, the expenditures/expenses made
with these excludable revenues. The AELR-Part I1 facilitates this calculation. A copy of the form is
provided on page VII- 14.
Detailed instructions for preparing Part I1 are as follows:
Step 1. Enter the name of the city or town and the fiscal year of the report.
Step 2. On line A, enter the amount for each fund type and the total for all funds from line D of the
Reconciliation.
Step 3. Determine exclusions from local revenues as provided in the Arizona Constitution, Article IX, $20.
Exclusions including those enumerated in the Constitution may be taken against alternative
expenditure limitations only if the exclusions are specifically identified in the resolution and the
publicity pamphlet.
Exclusions provided in Arizona Constitution, Article IX, $20, subsections 3(d)(xi), (xii), and (xiv)
do not generally apply. Therefore, lines for these exclusions have not been provided on Part 11.
Lines B.l through B.ll list Constitutional exclusions that may be taken. Lines B.12 and B.13 list
exclusions that may be taken as a result of Attorney General opinions. Explanations and examples
of the exclusions follow.
REPORTING INSTRUCTIONS CITIES AND TOWNS
Line B. 1 "Any amounts or property received from the issuance or incurrence of bonds or other
lawkl long-term obligations issued or incurred for a specific purpose, or collected
or segregated to make payments or deposits required by a contract concerning such
bond or obligations. For the purpose of this suhdivisior?, long-term nb!igatinns sha!!
not include warrants issued in the ordinary course of operation or registered for
payment by a political subdivision."
Bond proceeds-Exclude expenditureslexpenses made from amounts received from
the issuance of bonds (e.g., general obligation or revenue bonds), including payments
to registrars and paying agents. Proceeds from bonds of special assessment districts
may be excluded ifexpenditures from these proceeds have not already been deducted
on the Reconciliation (See page VII-3 for information on related deduction.)
Debt service requirements on bonded indebtednes2-Exclude expenditureslexpenses
made to pay principal and interest on outstanding bonds. Amounts paid into sinking
funds that are expenditureslexpenses of the reporting fiscal year may also be
excluded.
Proceeds from other low-term obligations-Exclude expenditureslexpenses made
from amounts received from the issuance of lawful long-term obligations including
payments to registrars and paying agents. The long-term obligation must have a
maturity date of more than one year and must be incurred for a specific purpose.
Exclude expenditureslexpenses from proceeds of certificates of participation (COPS)
issued in the name of the entity. See page VII-3 for treatment of
expenditureslexpenses from COP proceeds issued by a municipal property
corporation included in the cityltown reporting entity.
Debt service requirements on other long-term obligations-Exclude expenditures1
expenses made for principal and interest on other long-term obligations (e.g., capital
lease agreements, installment purchase agreements, and certificates of participation).
Payments made pursuant to contracts, including operating leases, are not excludable
under long-term obligations as the city or town has not incurred a long-term liability.
It should be noted that revenues from the sale of fixed assets purchased with the
proceeds from bonds or other long-term obligations are not excludable revenues since
the original proceeds used to purchase the assets were excluded in the fiscal years the
assets were purchased.
Line B.2 "Any amounts or property received as payment of dividends or interest, or any gain
on the sale or redemption of investment securities, the purchase of which is
authorized by law."
Exclude expenditureslexpenses made from amounts received as interest from
investments, dividends, and gains on sales or redemptions of investment securities.
REPORTING INSTRUCTIONS CITIES AND TOWNS
Line B.3 "Any amounts or property received by a political subdivision in the capacity of
trustee, custodian or agent."
Agency funds account for assets belonging to other funds, governments, individuals,
or private organizations. They are custodial in nature and do not involve the
measurement of revenues or expenditures/expenses. Disbursements of agency funds
should not be included in the amounts recorded on line A and, therefore, are not
excludable.
Expenditures made from amounts received in a trust fund may be excluded, as the
revenues are held by the city or town for the benefit of other entities (e.g.,
expenditures from the Fire Fighters' Relief and Pension Fund).
Line B.4 "Any amounts received as grants and aid of any type received from the federal
government or any of its agencies."
Exclude expenditureslexpenses made from amounts received as grants, cooperative
agreements, entitlements, contracts, payments in lieu of taxes, or asset-sharing from
the federal government.
Line B.5 "Any amounts received as grants, aid, contributions or gifts of any type except
amounts received directly or indirectly in lieu of taxes received directly or indirectly
from any private agency or organization or any individual."
Expenditureslexpenses made from amounts received as grants, aid, contributions,
donations, or gifts from private donors may be excluded.
Line B.6 "Any amounts received from the state which are included within the appropriation
limitation prescribed in $ 17 of this article."
Exclude expenditures/expenses made from any amounts received from the state that
were included within the state appropriation limitation (e.g., expenditures1 expenses
of lottery monies from the Local Transportation Assistance Fund, expenditures of
Judicial Collection Enhancement Fund monies received from the State Treasurer
pursuant to A.R.S. $ 12- 1 13, state grants).
Exclusions should not include expenditures from monies received from the state or
collected by or for the state and shared with the city or town that are not included
within the state appropriation limitation (e.g., state transaction privilege tax (sales
tax), state income tax deposited in the Urban Revenue Sharing Fund, motor vehicle
license tax, the portion of the time payment fee retained by the local court pursuant
to A.R.S. $ 12-1 16).
Revenues from the Highway User Revenue Fund are not included in the definition
of amounts received from the state, as provided in Arizona Constitution,
Article IX, 5 17. However, Arizona Constitution, Article IX, $20, subsection 3(d)(ix)
provides an exclusion for expenditures of highway user revenues. See line B.9 for
instructions concerning this exclusion.
REPORTING INSTRUCTIONS CITIES AND TOWNS
Line B.7 "Any amounts received pursuant to a transfer during a fiscal year from another
agency, department, office, board, commission, authority, council or institution of the
same political subdivision which were included as local revenues for such fiscal year
or which are excluded from local revenue under other provisions of this sectinn."
Exclude expenditureslexpenses made from revenues received due to quasi-external
intehnd transactions recorded in the general purpose financial statements in funds
other than internal service funds. Quasi-external interfund transactions are
transactions between funds of a city or town that are recorded as if the transaction
was with an entity external to the city or town. (See GASB Codification, $ 1800 for
further information on recording quasi-external interfund transactions.) This
exclusion may only be taken in the fund in which the revenue is recorded. An
example of such a transaction is payments made from the general fund to the
enterprise fund for water and sewer services. The exclusion should be claimed in the
enterprise fund, as the revenue would be recorded in this fund.
Interfund transfers are not excludable, as they do not represent revenues and
expenditures of the city or town.
This exclusion should not be used for internal service fund transactions, as these
transactions should be shown as adjustments on either line B.4 or line C.3 of the
Reconciliation.
Line B.8 "Any amounts or property accumulated for the purpose of purchasing land, buildings
or improvements or constructing buildings or improvements, if such accumulation
and purpose have been approved by the voters of the political subdivision."
Exclude expenditureslexpenses made from amounts accumulated if voter approval
was obtained to accumulate the amounts and make the expenditures. Expenditures
of transportation excise tax monies may be excludable here pursuant to Laws 1985,
Chapter 308, $34.
It should be noted that revenues from the sale of capital assets purchased with
amounts accumulated for such items are not excludable revenues, since the original
amounts used to purchase the assets were excluded in the fiscal years the assets were
purchased.
Line B.9 "Any amounts received pursuant to $14 of this article which are greater than the
amount received in fiscal year 1979-1980."
Exclude expenditures from highway user revenues received in the reporting fiscal
year in excess of amounts actually received in fiscal year 1979-80. The following
examples illustrate the calculation of this exclusion.
REPORTING INSTRUCTIONS CITIES AND TOWNS
-
Example 1
If carryforwards are maximized:
Highway user revenues received in the current fiscal year $500,000
Highway user revenues received in the current fiscal year equal to fiscal
year 1979-80 revenues received (200.000)
Revenues available for exclusion in the current fiscal year $300.000
Actual expenditures of highway user revenues in the current fiscal year $450,000
Amount equal to 1979-80 revenues expended in the current fiscal year (200.000)
Excludable revenues expended in the current fiscal year $250.000
Revenues available for exclusion in the current fiscal year $300,000
Revenues expended and claimed as an exclusion in the current fiscal year (250.000)
Unspent excludable revenue available for carryforward in future years $ 50.000
Examnle 2
If exclusions are maximized:
Highway user revenues received in the current fiscal year $500,000
Highway user revenues received in the current fiscal year equal to fiscal
year equal to 1979-80 revenues received (200.000)
Revenues available for exclusion in the current fiscal year $300.000
Actual expenditures of highway user revenues in the current fiscal year $450,000
Amount equal to 1979-80 revenues expended in the current fiscal year ( 150.000)
Excludable revenues expended in the current fiscal year $300.000
Revenues available for exclusion in the current fiscal year $300,000
Revenues expended and claimed as an exclusion in the current fiscal year (300.000)
Unspent excludable revenue available for carryforward in future years L-3
Line B.10 "Any amounts received in return for goods or services pursuant to a contract with
another political subdivision, school district, community college district or the state,
and expended by the other political subdivision, school district, community college
district or the state pursuant to the expenditure limitation in effect when the amounts
are expended by the other political subdivision, school district, community college
district or the state."
Exclude expenditures/expenses made from revenues received in return for goods or
services pursuant to a contract with another governmental entity conforming to
general contract laws.
Line B.ll "Any amounts received during a fiscal year as refunds, reimbursements, or other
recoveries of amounts expended which were applied against the expenditure
limitation for such fiscal year or which were excluded from local revenues under
other provisions of this subsection."
REPORTING INSTRUCTIONS CITIES AND TOWNS
Refunds, reimbursements, or other recoveries of revenues expended that are received
during the same fiscal year the related expenditures/expenses are made are generally
accounted for as reductions of those expenditures/expenses, and not as revenues.
Therefore, such receipts are not excludable.
If refunds, reimbursements, or other recoveries of revenues expended, regardless of
the year received, are accounted for as revenues (i.e., damage awards, and insurance
reimbursements), the expenditures/expenses from them are excludable.
Line B.12 Cities and towns under an alternative expenditure limitation may exclude
expenditures of excludable revenues specifically identified in the resolution and the
publicity pamphlet placed before the voters, as provided in Attorney General Opinion
188-045.
Voter-approved exclusions that are the same as constitutional exclusions should be
taken on lines B.l through B.ll, as appropriate. Line B.12 should be used for
exclusions that are different from those exclusions provided in the Constitution (e.g.,
exclusions for sanitation and refuse, elections, new services, andfor newly mandated
services).
Line B. 13 Cities and towns may exclude expenditures/expenses of prior years carryforward of
excludable revenues (exclusions explained on lines B.l through B. 12), as provided
in Attorney General Opinion 188-017. Prior years carryforward is defined as
excludable revenues unexpended in the year recorded that are accumulated and
eligible for exclusion when expended in subsequent fiscal years.
Carryforwards should be specifically identified in the city's or town's accounting
records by fund as to the nature of the exclusion, the amount of the carryforward, and
the fiscal year in which the carryforward was generated.
Line B.14 Calculate total exclusions claimed by adding lines B.l through B.13. Fund type
totals should be added to calculate total exclusions claimed.
Step 4. On line C, deduct the amount on line B.14 from the amount recorded on line A. If the calculated
amount is negative, exclusions must be reduced so the amount is zero or greater. Fund type totals
should then be added to calculate the amount subject to the expenditure limitation to be reported
on Part I, line 4.
A note to the AELR should be presented for each exclusion that cannot be agreed directly to an amount
recorded in the general purpose financial statements. Each note must be in sufficient detail to enable
identification of the exclusion in the general purpose financial statements and verification of the amount
excluded. Reference to the note should be included in the Description column on Part 11. Examples of several
frequently used notes are provided on pages VII- 16 through VII- 17.
REPORTING INSTRUCTIONS CITIES AND TOWNS
AELR-PART I
The AELR-Part I compares the expenditure limitation and the amount subject to the expenditure limitation
to determine whether the city or town has exceeded the expenditure limitation. A copy of the form is provided
on page VII- 13.
Detailed instructions for preparing Part I are as follows:
Step 1. Enter the name of the city or town and the fiscal year of the report.
Step 2. Enter the amount of the Economic Estimates Commission expenditure limitation on line 1.
Step 3. Enter the voter-approved alternative expenditure limitation and the date approved, if applicable,
on line 2. (Attach supporting documentation, such as the ordinance or adopted budget, that indicates
the amount of the alternative expenditure limitation for the reporting fiscal year.)
Step 4. On line 3, enter the applicable expenditure limitation from line 1 or line 2.
Step 5. On line 4, enter the amount subject to the expenditure limitation from Part 11, line C.
Step 6. Determine the total adjusted amount subject to the expenditure limitation on Line 10.
Arizona Constitution, Article IX, §20(2), lines 5,6, 7, and 9 provide for adjustments.
Line 5 Enter the actual amount of expenditureslexpenses made in the reporting fiscal year
that were directly necessitated by a natural or manmade disaster declared by the
Governor. The expenditureslexpenses must be authorized by at least two-thirds of
the members of the city or town council, as required by Arizona Constitution,
Article IX, §20(2)(a). (Attach supporting documentation.)
Line 6 Enter the actual amount of expenditureslexpenses made in the reporting fiscal year
that were directly necessitated by a natural or manmade disaster not declared by the
Governor. The expenditureslexpenses must be authorized by at least 70 percent of
the members of the city or town council as required by Arizona Constitution,
Article IX, 920(2)(b). (Attach supporting documentation.)
Line 7 Enter the actual amount of expenditureslexpenses in excess of the expenditure
limitation authorized in the prior fiscal year. The amount must be specific and must
be authorized by at least two-thirds of the members of the city or town council and
approved by a majority of qualified electors, as required by the Arizona Constitution,
Article IX, §20(2)(c). (Attach supporting documentation.)
Line 8 Subtract lines 5,6, and 7 from line 4.
Line 9 Enter the actual amount of expenditures/expenses made in the prior fiscal year in
excess of the expenditure limitation. The expenditures/expenses must have been
authorized by at least 70 percent of the members of the city or town council for
expenditures directly necessitated by a natural or manmade disaster not declared by
the Governor and not approved by a majority of the qualified voters, as required by
REPORTING INSTRUCTIONS CITIES AND TOWNS
the Arizona Constitution, Article IX, $20(2)(b). Total expenditures/expenses for the
reporting fiscal year subject to the expenditure limitation must be increased by this
amount. (Attach supporting documentation.)
Line 10 Add the amount on line 9 to the amount on line 8 to determine the adjusted amount
subject to the expenditure limitation.
Step 7. Deduct the amount on line 10 from the amount on line 3 and record the difference on line 1 1. If
the difference is a negative number, the city or town exceeded the expenditure limitation and
should submit a supporting schedule explaining the reason for the excess. If the difference is a
positive number or zero, the city or town did not exceed the expenditure limitation and a supporting
schedule is not necessary.
Step 8. Enter the name, title, and telephone number of the chief fiscal officer. The chief fiscal officer
should then sign and date the AELR to provide written certification that the AELR is accurate.
FINANCIAL STATEMENTS
As prescribed by A.R.S. 541-1279.07, financial statements must be prepared in accordance with generally
accepted accounting principles. These principles are the conventions, rules, and procedures that define
accepted accounting practices at a particular time and provide a standard by which auditors form their
professional opinions about the financial statements.
In accordance with A.R.S. 59-481, cities are required to have financial statement audits performed annually.
Towns subject to the Single Audit Act Amendments of 1996 must also have financial statement audits
performed annually. All other towns may have financial statement audits performed either annually or
biennially, as specified in A.R.S. 59-481. Cities and towns having annual audits are required to file audited
annual financial statements with the Auditor General within four months after the close of each fiscal year.
Towns having biennial audits must file audited financial statements of both fiscal years within four months
after the close of the last fiscal year of the biennial audit. Upon written request, the Auditor General may grant
up to a 120-day filing extension if extenuating circumstances exist.
A certified public accountant or public accountant performing the audit must render an opinion as to whether
the general purpose financial statements present fairly, in all material respects, the financial position and results
of operations in conformity with generally accepted accounting principles. In addition, the auditor must render
an opinion on whether the AELR presents fairly, in all material respects, the information required by the UERS
prescribed by A.R.S. $41-1279.07. See page VII-1 for further information on the audit of the AELR.
The GASB Cod~jicationo f Governntental Accounting and Financial Reporting Standards promulgates
authoritative accounting and financial reporting guidance for state and local governmental entities. The
American Institute of Certified Public Accountants' (AICPA) Audit and Accounting Guide, Audits of State
and Local Governmental Units should be used as a source for illustrations of the accounting and reporting
requirements set forth in the GASB Codification.
Examples of general purpose financial statements for cities and towns may be found in the GASB Codification.
REPORTING INSTRUCTIONS CITIES AND TOWNS
Independent Auditors' Report
The Auditor General of the State of Arizona and
The Honorable Mayor and Council
of the , Arizona
We have audited the general purpose financial statements of as of and for the year
ended June 30, 1 9 ,an d have issued our separate report thereon dated . (Describe any
departure from the standard report.) We have also audited the accompanying Annual Expenditure
Limitation Report of for the year ended June 30, 1 9 . This report is the
responsibility of the management. Our responsibility is to express an opinion on this report based on
our audit.
We conducted our audit in accordance with 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 generally accepted accounting principles.
In our opinion, the Annual Expenditure Limitation Report of for the year ended
June 30, 1 9 ,re ferred 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 filing with the State of Arizona and should not be used for any other purpose.
(Signature)
Last day of fieldwork
REPORTING INSTRUCTIONS CITIES AND TOWNS
CITYITOWN OF
Annual Expenditure Limitation Report-Part I
Year Ended June 30,19-
1. Economic Estimates Commission expenditure limitation
2. Voter-approved alternative expenditure limitation (Approved
3. Enter applicable amount from Line 1 or Line 2
4. Amount subject to the expenditure limitation (total amount
from Part 11, Line C)
R
5. Board-authorized expenditures necessitated by a disaster
declared by the Governor (Article IX, §20[2][a], Arizona
Constitution)
6. Board-authorized expenditures necessitated by a disaster not
declared by the Governor (Article IX, §20[2][b], Arizona
Constitution) -
7. Prior-year voter-approved expenditures to exceed the
expenditure limitation for the reporting fiscal year (Article IX,.
§20[2][c], Arizona Constitution)
8. Subtotal
9. Board-authorized excess expenditures for the previous fiscal
year not declared by the Governor and not approved by the
voters (Article IX, §20[2][b], Arizona Constitution) +
10. Total adjusted amount subject to the expenditure limitation
1 1. Amount under (in excess of) the expenditure limitation (If
excess expenditures are reported, provide an explanation.)
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:
Telephone Number: Date:
See accompanying notes to report.
REPORTING INSTRUCTIONS CITIES AND TOWNS
CITYfrOWN OF
Annual Expenditure Limitation Report-Part I1
Year Ended June 30,19-
Special Debt Capital
General Revenue Service Projects Trust
Descri~tion Fund Funds Funds Funds - Funds
A. Amounts reported on the
Reconciliation, Line D $ $ $ $ $
B. Less exclusions claimed:
1. Bond proceeds
Debt service requirements on
bonded indebtedness
Proceeds from other long-term
obligations
Debt service requirements on
other long-term obligations
2. Dividends, interest, and gains on
the sale or redemption of
investment securities
3. Trustee or custodian
4. Grants and aid from the federal
government
5. Grants, aid, contributions, or
gifts from a private agency,
organization, or individual
except amounts received in lieu
of taxes
6. Amounts received from the state
7. Quasi-external interfund
transactions
8. Amounts accumulated for the
purchase of land, and the
purchase or construction of
buildings or improvements
9. Highway user revenues in excess
Enterprise
Funds -Total
of those received in fiscal year
1979-80
10. Contracts with other political
subdivisions
1 1. Refunds, reimbursements, and
other recoveries
12. Voter-approved exclusions not
identified above (attach
resolution)
13. Prior years carryfonvard
14. Total exclusions claimed $ $ $ $ $
C. Amounts subject to the expenditure
limitation (If an individual fund
type amount is negative, reduce
exclusions claimed to net to zero.) $ $ $ $ $
See accompanying notes to report.
VII- 14
REPORTING INSTRUCTIONS. CITIES AND TOWNS
CITYrrOWN OF
Annual Expenditure Limitation Report-Reconciliation
Year Ended June 30,19-
Special Deb! Capita!
General Revenue Service Projects Trust Enterprise
Description Fund Funds Funds -Funds -Funds Funds -Total
A. Total expenditures/expenses and
applicable other financing uses
reported within the general
purpose financial statements
B. Deductions:
1. Items not requiring use of
working capital:
Depreciation
Loss on disposal of capital
assets
Bad debt expense
Landfill closure and
postclosure care costs
2. Expenditures of separate legal
entities established under
Arizona Revised Statutes
3. Present value of net minimum
capital lease and installment
purchase contract payments
recorded as expenditures at
inception of the agreements
4. Charges to other funds in
excess of Internal Service
Fund expenses
5. Involuntary court judgments
6. Total deductions $ $ $ $ $ $ $
C. Additions:
1. Principal payments on long-term
debt
2. Acquisition of capital assets
3. Internal Service Fund
expenses not charged to
other finds
4. Landfill closure and
postclosure care costs
recorded as expended in
previous years
5. Total additions $ $ $ $ $ $ $
D. Amounts reported on Part 11,
line A $ $ $ $ $ $ $
See accompanying notes to report.
VII- 15
REPORTING INSTRUCTIONS CITIES AND TOWNS
CITYITOWN OF
Notes to Annual Expenditure Limitation Report
Year Ended June 30,19-
Note 1 - Summary of Significant Accounting Policies
(This paragraph should be used by cities and towns not governed by an alternative expenditure
limitation.) 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 expenditureslexpenses of certain revenues specified
in the Arizona Constitution, Article IX, $20 from the total expenditures/expenses reported in the
general purpose financial statements.
(This paragraph should be used by cities and towns governed by an alternative expenditure
limitation.) 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 $4 1- 1279.07, and in accordance with the voter-approved alternative expenditure
limitation adopted (date) , as authorized by the Arizona Constitution, Article IX,
§20(9).
In accordance with the UERS requirements, a note to the AELR is presented below for any exclusion
claimed on Part I1 and each deduction or addition in the Reconciliation that cannot be traced directly
to an amount reported in the 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 Funds for the
General, Special Revenue, Debt Service, Capital Projects, or Expendable Trust Funds; and to the
Combined Statement of Revenues, Expenses, and Changes in Retained Earnings (Fund EquityPAll
Proprietary Fund Types for the Enterprise and Internal Service Funds.
Note - The exclusion claimed for debt service requirements on bonded indebtedness in the Debt Service
Funds consists of principal retirement and interest expense.
Note - The exclusion claimed for dividends, interest, and gains on the sale or redemption of investment
securities of $ in the General Fund includes interest on investments expended of $ ;
interest on delinquent taxes expended of $ , which was recorded as tax revenue; and dividends
expended of $ , which were recorded as miscellaneous revenues. Remaining revenues of
$ , $ , and $ respectively, have been carried forward to future years.
Note - This schedule presents revenues from which exclusions have been claimed for federal grants and aid,
amounts received from the state, and highway user revenues in the General and Special Revenue
Funds.
REPORTING INSTRUCTIONS CITIES AND TOWNS
CITYrrOWN OF
Notes to Annual Expenditure Limitation Report
Year Ended June 30,19-
GENERAL FUND SPECIAL REVENUE FUNDS
Amount Amount
Amount Carried Amount Carried
Forward
Grants and aid from federal
government $$L%L$
Amounts received from the state
Highway user revenues in excess of
those received in fiscal year
1979-80
Other revenues+nonexcludable)
Total intergovernmental revenues as
reported in general purpose
financial statements $$$-$$
Note - The exclusion claimed for contracts with other political subdivisions of $ includes $
of charges for services expended and $ of miscellaneous revenues expended. Remaining
revenues of $ and $ have been carried forward to future years.
Note - Prior years carryforward consists of constitutionally excludable revenues unexpended in the year of
receipt that have been accumulated and were expended in the current year as follows.
Special Capital Debt
General Revenue Projects Service
Description Fund Funds Funds Funds
Dividends. interest, and gains on the sale of
securities $$$$
Grants and aid from federal government
Amounts received from the state
Highway user revenues in excess of those
received in fiscal year 1979-80
Total prior years carryfonvard expended $ $ $ $
Note - The deduction of $ for separate legal entities established under Arizona Revised Statutes
consists of expenditures of special assessment districts/municipal property corporations included
within the cityltown's reporting entity, but not included in the Economic Estimates Commission base
limit calculations and are reported in the following categories in the general purpose financial
statements:
VII- 1 7
REPORTING INSTRUCTIONS CITIES AND TOWNS
CITYITOWN OF
Notes to Annual Expenditure Limitation Report
Year Ended June 30,19-
Special Capital Debt Service
S~eciaAl ssessment Districts
General government S%$$
Capital outlay
Principal retirement
Interest and fiscal charges
Total $$$$
Munici~aPl ro~ertvC ornorations
General government
Capital outlay
LS$$
Principal retirement
Interest and fiscal charges
Total $$$$
Note - The addition of $ for principal payments on long-term debt in the Enterprise Funds
consists of (list the total amount of principal payments for each long-term debt item).
REPORTING INSTRUCTIONS COMMUNITY COLLEGE DISTRICTS
CONTENTS
Topic Pare
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII- 1
ANNUAL BUDGETED EXPENDITURE LIMITATION REPORT (ABELRbPART I1 ...... VIII-2
ANNUAL BUDGETED EXPENDITURE LIMITATION REPORT (ABELRbPART I ....... VIII-7
ANNUAL EXPENDITURE COMPARISON REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .V III-8
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-9
FORMS:
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII- 10
Annual Budgeted Expenditure Limitation Report-Part I ......................... VIII-11
Annual Budgeted Expenditure Limitation Report-Part I1 . . . . . . . . . . . . . . . . . . . . . . . . VIII-12
Notes to Annual Budgeted Expenditure Limitation Report ........................ VIII- 13
Annual Expenditure Comparison Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII- 16
VIII
REPORTING INSTRUCTIONS COMMUNITY COLLEGE DISTRICTS
GENERAL INFORMATION
Arizona Revised Statutes (A.R.S.) 541-1279.07 requires community college districts to prepare an Annual
Budgeted Expenditure Limitation Report (AEEiRj. in addition, annuai financiai statements must be prepared
in accordance with generally accepted accounting principles. On the ABELR, total budgeted expenditures less
expenditures of constitutionally excludable revenues is compared for compliance with the expenditure
limitation.
A reconciliation of total expenditures reported within the annual financial statements to total expenditures
stated within the ABELR is required by A.R.S. 541-1279.07. However, the ABELR presents total budgeted
expenditures and the annual financial statements present actual expenditures without budgeted information.
Therefore, in place of the reconciliation, community college districts should prepare an Annual Expenditure
Comparison Report (AECR) and issue it for additional analysis as an accompanying report to the ABELR.
The ABELR, AECR, and the financial statements must be filed with the Auditor General within four months
after the close of each fiscal year. Upon written request, the Auditor General may grant up to a 120-day
extension if extenuating circumstances exist.
A.R.S. $15-1471 allows a community college district to adopt a modified expenditure limitation, with the
approval of a majority of the qualified voters in the district. The excess expenditures must be a specified
percentage ofthe constitutional expenditure limitation. The modified expenditure limitation becomes effective
beginning in the fiscal year immediately following approval and applies for a period of not less than two and
not more than seven years. After that time, the constitutional expenditure limitation becomes effective unless
a new modified expenditure limitation is approved. The district board may not authorize expenditures in
excess of the modified expenditure limitation without the approval of a majority of the qualified voters in the
district. See $V for detailed information on modified expenditure limitations.
The Auditor General, another certified public accountant, or a public accountant must render an opinion on
whether the ABELR presents fairly, in all material respects, the information required by the Uniform
Expenditure Reporting System (UERS) prescribed by A.R.S. $41-1279.07. A sample of an independent
auditors' report containing an unqualified opinion for community college districts is provided on page VIII- 10.
If the auditor concludes that an unqualified opinion cannot be expressed on the ABELR, the auditor should
disclose all the substantive reasons for the conclusion in an explanatory paragraph in the auditors' report. In
addition, if the auditors' report on the financial statements departs from the standard report, the auditors must
disclose the departure in the introductory paragraph of the auditors' report on the ABELR.
A.R.S. 541-1279.07 also requires community college districts to provide to the Auditor General by July 31
of each fiscal year the name ofthe chief fiscal officer designated by the governing board to submit the ABELR
and certify its accuracy for that fiscal year. Any replacement of the designated individual must be reported to
the Auditor General immediately.
Detailed instructions for preparing the ABELR and the AECR are contained on pages VIII-2 through VIII-9.
Sample forms are provided on pages VIII-11 through VIII-16. General information concerning annual
financial statements is contained on page VIII-9.
REPORTING INSTRUCTIONS COMMUNITY COLLEGE DISTRICTS
ABELR-PART I1
Arizona Constitution, Article IX, $21 excludes certain revenues from the definition of local revenues,'and only
expenditures made with local revenues are subject to the expenditure limitation. Therefore, to arrive at
budgeted expenditures subject to the expenditure limitation to be reported on the ABELR-Part I, it is
necessary to reduce budgeted expenditures by expenditures made with these excludable revenues. The
ABELR-Part I1 facilitates this calculation. A copy of the form is provided on page VIII-12.
Districts that present the Current General and Current Auxiliary Enterprises Funds as a combined total in the
adopted budget and on the annual financial statements may also record a combined total on the ABELR. The
form provided on page VIII- 12 should be modified accordingly.
Detailed instructions for preparing Part I1 are as follows:
Step 1. Enter the name of the district and the fiscal year of the report.
Step 2. On line A, enter total budgeted expenditures and applicable other deductions from the final
adopted budget for each fund type and the total for all funds from the district's final adopted
budget for the reporting fiscal year.
Step 3. Determine exclusions from local revenues as provided in the Arizona Constitution,
Article IX, $2 1.
Lines B.l through B.12 list constitutional exclusions that may be taken. Line B.13 lists an
exclusion that may be taken as a result of an Attorney General opinion. Explanations and
examples of the exclusions follow.
Line B. 1 "Any amounts or property received from the issuance or incurrence of bonds or other
lawful long-term obligations issued or incurred for a specific purpose, or any amounts
or property collected or segregated to make payments or deposits required by a
contract concerning such bonds or obligations. For the purpose of this subdivision
long-term obligations shall not include warrants issued in the ordinary course of
operation or registered for payment by a political subdivision."
Bond ~roceeds-Exclude expenditures made from amounts received from the
issuance of bonds (e.g., general obligation or revenue bonds), including payments to
registrars and paying agents.
Debt service reauirements on bonded indebtedness-Exclude expenditures made to
pay principal and interest on outstanding bonds. Amounts paid into sinking funds
that are expenditures of the reporting fiscal year may also be excluded.
Proceeds from other long-term oblipations-Exclude expenditures made from
amounts received from the issuance of lawful long-term obligations (e.g., loans),
including payments to registrars and paying agents. The long-term obligation must
REPORTING INSTRUCTIONS COMMUNITY COLLEGE DISTRICTS
have a maturity date of more than one year and must be incurred for a specific
purpose.
Exclude expenditures from proceeds of certificates of participation (COPS) issued in
the name of the entity.
Debt service requirements on other lonp-term obligations-Exclude expenditures
made for principal and interest on other long-term obligations (e.g., capital lease
agreements, installment purchase agreements, certificates of participation).
Payments made pursuant to contracts, including operating leases, are not excludable
under long-term obligations as the district has not incurred a long-term liability.
It should be noted that revenues from the sale of fixed assets purchased with the
proceeds from bonds or other long-term obligations are not excludable revenues since
the original proceeds used to purchase the assets were excluded in the fiscal year the
assets were purchased.
Line B.2 "Any amounts or property received as payment of dividends and interest, or any gain
on the sale or redemption of investment securities, the purchase of which is
authorized by law."
Exclude expenditures made from amounts received as interest from investments,
dividends, and gains on sales or redemptions of investment securities.
Line B.3 "Any amounts or property received by a school or community college district in the
capacity of trustee, custodian or agent."
Community college districts may receive monies from federal, state, and private
sources in a custodial capacity for the operation of a charter school. Expenditures
of such monies may be excluded here if the charter school expenditures are included
in the district's adopted budget, and the charter school is a separate legal entity. (See
pages VIII-4 and VIII-6 for information on exclusions for charter schools that are not
separate legal entities.)
Agency funds account for assets held by the district as custodian or fiscal agent for
students, faculty, staff, and other organizations. Agency fknds are custodial and do
not involve the measurement of revenues or expenditures; therefore, agency funds
are not presented in the ABELR.
Since Endowment and Similar Funds and Loan Funds are not included in the
district's adopted budget, this exclusion does not apply to those funds.
Line B.4 "Any amounts received as grants and aid of any type received from the federal
government or any of its agencies except school assistance in federally affected
areas."
REPORTING INSTRUCTIONS COMMUNITY COLLEGE DISTRICTS
Exclude expenditures made from amounts received as grants, cooperative
agreements, contracts, and student financial aid from the federal government.
Expenditures from federal revenues for the operation of charter schools that are not
separate legal entities are excludable here. (See page VIII-3 for exclusion for charter
schools that are separate legal entities.)
Amounts representing indirect cost recoveries received from a federally-sponsored
program should be recorded as both program revenue and as an indirect cost
expenditure in the fund in which the program is accounted for. Indirect cost
recoveries should also be recorded as indirect cost recovery revenue in the current
unrestricted fund to reimburse the fund for expenditures incurred. As a result, the
revenue and expenditures resulting from such a transaction are recorded twice.
Therefore, the amounts representing expenditures from indirect cost recoveries
should be excluded in both the fund in which the grant or aid revenue was recorded
and in the current unrestricted fund where the indirect cost recovery revenue was
recorded.
Line B.5 "Any amounts or property received as grants, gifts, aid or contributions of any type
except amounts received directly or indirectly in lieu of taxes received directly or
indirectly from any private agency or organization, or any individual."
Exclude expenditures made from amounts received as grants, aid, contributions,
donations, or gifts from private donors.
Expenditures from private donations or gifts for the operation of charter schools that
are not separate legal entities are also excludable here. (See page VIII-3 for
exclusion for charter schools that are separate legal entities.)
Amounts representing indirect cost recoveries received from a program sponsored by
a private organization or individual should be recorded as both program revenue and
as an indirect cost expenditure in the fund in which the program is accounted for.
Indirect cost recoveries should also be recorded as indirect cost recovery revenue in
the current unrestricted fund to reimburse the fund for expenditures incurred. As a
result, the revenue and expenditures resulting from such a transaction are recorded
twice. Therefore, the amounts representing expenditures for indirect cost recoveries
should be excluded in both the fund in which the grant