Audit Report 2008 Sonoma County Children and Families Commission

Sonoma County Auditor Controller Treasurer Tax Collector [phone]

Description

SONOMA COUNTY CHILDREN AND FAMILIES COMMISSION (dba First 5 Sonoma County) ANNUAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2008 SONOMA COUNTY CHILDREN AND FAMILIES COMMISSION Basic Financial Statements For the Fiscal Year Ended June 30, 2008 TABLE OF CONTENTS Page Commission Membership…………………………………………………………………. i Financial Section Auditor’s Report…………………………………………………………………………… 1-2 Management’s Discussion and Analysis .............................................................................. 3 – 7 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets ........................................................................................... 8 Statement of Activities ............................................................................................. 9 Fund Financial Statements: Balance Sheet – Governmental Funds ..................................................................... 10 Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Funds ................................................ 11 Notes to the Basic Financial Statements ........................................................................ 12 – 19 Required Supplementary Information Combining Fund Statements and Individual Fund Schedule: Combining Balance Sheet - Governmental Funds ..................... ...

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• Publié par: Lekos
• Nombre de lectures: 15
• Langue: English

Extrait

SONOMA COUNTY CHILDREN AND FAMILIES COMMISSION (dba First 5 Sonoma County)

ANNUAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2008

SONOMA COUNTY CHILDREN AND FAMILIES COMMISSION

Basic Financial Statements For the Fiscal Year Ended June 30, 2008 T A B L E O F C O N T E N T S

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Commission Membership…………………………………………………………………. Financial Section Auditor’s Report…………………………………………………………………………… 1-2 Management’s Discussion and Analysis .............................................................................. 3 – 7 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets ........................................................................................... 8  Statement of Activities ............................................................................................. 9 Fund Financial Statements: Balance Sheet – Governmental Funds ..................................................................... 10 Statement of Revenues, Expenditures, and  Changes in Fund Balance – Governmental Funds ................................................ 11 Notes to the Basic Financial Statements ........................................................................ 12 – 19 Required Supplementary Information Combining Fund Statements and Individual Fund Schedule: Combining Balance Sheet - Governmental Funds ......................................................... 20 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds .................................................. 21 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual –    General Fund - Operations ...................................................................................... 22 Compliance Section Auditor’s Report on Internal Control over Financial Reporting and on Compliance and  Other Matters Based on an Audit of Financial Statements Performed In Accordance withGovernmental Auditing Standards…………………………………….23 - 24 Auditor’s Report on State Compliance………………………………………………………25 - 26

SONOMA COUNTY CHILDREN AND FAMILIES COMMISSION Roster of Commission Members

As of September 12, 2008, the Commission consisted of the following members:

•Rita Scardaci Director, Sonoma County Department of Health Services

•Jo Weber, Vice Chair Director, Sonoma County Department of Human Services

•Tamah Hulett, Chair Parent Commissioner

•Jane Escobedo Regional Director, Sonoma County Office of Education

•Katherine Foster, M.D. Pediatrician

•Joel Gordon Director, Early Childhood Education Santa Rosa Junior College

•Valerie Brown Sonoma County Board of Supervisors

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FINANCIAL SECTION

RODNEY A. DOLE AUDITOR-CONTROLLER TREASURER -TAX COLLECTOR

Auditor-Controller  Treasurer-Tax Collector County of Sonoma 585 FISCAL DRIVE SUITE 101F SANTA ROSA, CALIFORNIA 95403-2819 [phone] FAX [phone]

Board of Commissioners Sonoma County Children and Families Commission Santa Rosa, California

Auditor’s Report

DONNA M. DUNK ASSISTANT AUDITOR-CONTROLLER ROBERT BOITANO ASSISTANT TREASURER PAM JOHNSTON ASSISTANT TAX COLLECTOR / AUDITOR

We have audited the accompanying financial statements of the Sonoma County Children and Families Commission (the Commission) also known as First 5 Sonoma County, a component unit of the County of Sonoma, as of and for the year ended June 30, 2008, which collectively comprise the Commission’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Commission’s management. Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, and the standards applicable to financial audits contained inGovernment Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audit provides a reasonable basis for our opinion. As required by various statutes within the California Government Code, County Auditor- Controllers are mandated to perform certain accounting, auditing, and financial reporting functions. These activities, in themselves, necessarily impairGovernment Auditing Standardsof independence. Specifically, “auditors should not audit their own work or provide non-audit services in situations where the amounts or services involved are significant and/or material to the subject of the audit.” Althoughthe Auditor-Controller is statutorily obligated to maintain the accounts of departments, districts or funds that are contained within the county treasury, we believe adequate safeguards and division of responsibility exist. The staff in charge of performing audits within the Auditor-Controller Department has no other responsibility for the accounts and records being audited. This would therefore enable the reader of this report to rely on the information contained herein.

In our opinion, except for the effects, if any, of the disclosure noted above, the basic financial statements referred to above present fairly, in all material respects, the financial position of the Commission as of June 30, 2008 and the respective changes in its financial position for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated September 12, 2008, on our consideration of the Commission’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

The Management’s Discussion and Analysis (MD&A) is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the information. However, we did not audit the information and express no opinion on it.

The accompanying financial information listed as Required Supplementary Information in the Table of Contents is presented for purposes of additional analysis and is not a required part of the financial statements of the Sonoma County Children and Families Commission. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the financial statements of each of the respective individual funds taken as a whole.

September 12, 2008

Management’s Discussion and Analysis

As management of the Sonoma County Children and Families Commission (the Commission), we offer readers of the Commission’s financial statements this narrative overview and analysis of the financial activities of the Commission for the fiscal year ended June 30, 2008. We encourage readers to consider the information presented here in conjunction with the Commission’s financial statements and the accompanying notes to the basic financial statements. Financial Highlights

•The assets of the Commission are held by the County of Sonoma in a special revenue fund. The use of these assets is restricted for the purposes outlined under the California Children and Families Act of 1998 (Proposition 10). •The Commission received $4,525,536 from the State of California from revenues collected under the California Children and Families Act of 1998 (Proposition 10). •current fiscal year, the Commission disbursed $3,477,271 in grants and contractsDuring the   to various service providers, and has designated $6,353,598 to be distributed over the next two years. •The assets of the Commission exceeded its liabilities at the close of the most recent fiscal year by $30,833,075 (net assets). All of this amount may be used to meet the Commission’s ongoing obligations. • increase is largely ThisThe Commission’s total net assets increased by $2,573,785.   attributable to the receipts of Proposition 10 Tobacco Tax funding and a decrease in expenditures in comparison with the prior year. •As of the close of the current fiscal year, the Commission’s governmental fund reported combined ending fund balances of $30,833,075, an increase of $2,573,785, in comparison with the prior year. Approximately $19,690,143 or 64% of this total amount is available for spending at the Commission’s discretion (unreserved fund balance). •At the end of the current fiscal year, the unreserved fund balance for the governmental funds $19,690,143 was 448% of the Commission’s total expenditures during FY 07-08. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Commission’s basic financial statements. The Commission’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. government-wide financial statements are The designed to provide readers with a broad overview of the Commission’s finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of the Commission’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets compared to the Commission’s adopted financial model may serve as a useful indicator of whether the financial position of the Commission is improving or deteriorating. 3

The statement of activities presents information showing how the Commission’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected revenues and unpaid expenses). Fund financial statements.grouping of related accounts that is used to maintain A fund is a control over resources that have been segregated for specific activities or objectives. The Commission, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The Commission’s funds are governmental funds. Governmental funds.Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statements of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Commission uses a dedicated fund and an operations fund to account for its activities, which include Proposition 10 funding and the implementation of programs to ensure the healthy development of children, the empowerment of families, and the strengthening of communities for all Sonoma County children ages 0-5. The Commission adopts an annual appropriated budget for its funds. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget. Notes to the basic financial statements.The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.   Other information.The combining statements referred to earlier in connection with the financial statements are presented immediately following the notes to the financial statements.

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Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the case of the Commission, assets exceeded liabilities by $30,833,075 at the close of the most recent fiscal year. By far, the largest portion of the Commission’s net assets (99%) is in cash. Net Assets

Current and other assets

Governmental Activities 2008 2007 $ 31,380,796 $ 28,843,612

547,721 584,322

Other Liabilities Net Assets: Restricted $ 30,833,075 $ 28,259,290 The balance of the restricted net assets ($30,833,075) may be used to meet the Commission’s ongoing obligations and is subject to external restrictions on how they are used. At the end of the current fiscal year, the Commission is able to report a positive balance in net assets for the government as a whole. The same held true for the prior fiscal year. The Commission’s net assets increased by $2,573,785 during the current fiscal year. The increase in the Commission’s current and other assets was a result of increases in ongoing revenues and a decrease in expenses. Each year, the Commission sets aside 40% of the Proposition 10 revenue for future use. Governmental activities. activities increased the Commission’s net assets by Governmental $2,573,785. This increase is the result of revenues exceeding expenses in the governmental activities.

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Chan es in Net Assets

Revenues: Program Revenues: Operating grants and contributions General Revenues: Tobacco taxes State interest (SMIF) Investment earnings Total revenues Expenses: General government Change in net assets Net assets - beginning Prior period adjustment Net assets - beginning, as restated Net assets - ending

Governmental Activities 2008 2007

$ 880,478 $ 169,470

4,525,536 5,392,373 24,244 30,056 1,536,987 1,295,740 6,967,245 6,887,639

4,393,460 5,043,314 2,573,785 1,844,325 28,259,290 26,339,020 0 75,945 28,259,290 26,414,965 $ 30,833,075 $ 28,259,290

Financial Analysis of the Government’s Funds As noted earlier, the Commission uses fund accounting to ensure and demonstrate compliance with finance-related requirements. Governmental funds.of the Commission’s governmental fund financial statementsThe focus is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Commission’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the Commission’s governmental funds reported ending fund balances of $30,833,075, an increase of $2,573,785 in comparison with the prior year. Approximately 64% of the total amount $19,690,143 constitutes unreserved fund balance, which is available for spending at the Commission’s discretion. The remainder of fund balance $11,142,932 is reserved to indicate that it is not available for new spending because it has already been committed to liquidate contracts and purchase orders of the prior period and to satisfy other contractual agreements and obligations approved by the Commission. 6

Economic Factors and Next Year’s Budgets and Rates • is a larger decline ThisProposition 10 annual revenues decreased 8.53% from the prior year. than predicted and may be attributable to increased costs deducted from Proposition 10 revenues by the Bureau of Equalization. These expenses are predicted to pay off in greater capture of taxes on tobacco sales in future years. The Commission's financial models project a revenue decline of 2% from the previous fiscal year. • will be reflected in the ThisInterest earnings are expected to average 4% in fiscal year 2009. Commission's financial model. •the State’s budget crisis, various threats to divert, reduce, orIn an attempt to resolve eliminate Proposition 10 funding have been made. This is predicted to continue into the future.

All of these factors were considered in preparing the Commission’s budget for the fiscal year ending June 30, 2009.

Request for Information This financial report is designed to provide a general overview of the Commission’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Sonoma County Children and Families Commission, 490 Mendocino Avenue, Suite 202, Santa Rosa, CA 95401.

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