Review and file Fiscal Year 2022/23 Third Quarter Financial Update

Review and file Fiscal Year 2022/23 Third Quarter Financial Update.

None. 

The intent of the quarterly financial report is to provide the Commission with an update on how LAFCo performed financially in the previous quarter as compared to the adopted budget and to discuss any issues as appropriate. The practice was recommended during a previous audit as an additional safeguard to ensure sound financial management, given the small size of the LAFCo staff. In accordance with LAFCo Administrative Policies and Procedures, the Commission adopts the final budget and is authorized to make adjustments as appropriate.

The LAFCo FY 2022/23 budget was adopted on May 26, 2022. During the third quarter LAFCo remained on track with regard to both revenue and expenditures.

REVENUES
By the end of the third quarter of FY 2022/23 LAFCo has slightly exceeded its expected revenues (100.73%) in the amount of $526,578. Most of the revenue came from agency funding totaling $451,356, while the remainder came from other sources (mostly use of fund balance) totaling $75,222. LAFCo's most significant revenue source comes from local government agency payments. Expected revenue during the third quarter included $2,009 received in investment earnings, bringing the total for this FY to $2,739.06 (91.30%). 

In Attachments B and C, Yolo County Department of Financial Services (DFS) recorded an adjustment in the first quarter of $4,624 to Investment Earnings-Pool to comply with Government Accounting Standard Board (GASB) reporting requirements. However, it is a financial reporting adjustment only and is not considered a spendable revenue for budget purposes. Therefore, the adjustment was not included in the Budget Status Summary. Additionally, please note the income statement (Attachment B) does not match staff's budget summary (Attachment A). This is because each year, LAFCo uses some fund balance to balance its budget. The use of fund balance does not show up as new net income because it is already in our fund.
 
EXPENDITURES
During the first three quarters of FY 2022/23 LAFCo expended a total of $326,512 (62.46%) of its annual budgeted costs of $522,756. LAFCo expended $294,108 (75.16%) of its Salary and Benefits appropriation of $391,310. Staff projects Salaries and Benefits will exceed its appropriation by the end of the fourth quarter due to unexpected Yolo County salary increases and a budget adjustment will be needed. LAFCo expended $32,404 (31.94%) of its Services and Supplies appropriation of $101,446. During the first three quarters LAFCo expended $4,027 (134.24%) of its appropriations for Professional & Specialist Service-Info Tech Services (account 501152), exceeding its total appropriation of $3,000. $1,407 of that amount was used for the collection of GIS data and maps to inform several Municipal Service Reviews and Spheres of Influence Studies (MSR/SOI), $852 in videographer services for LAFCo meetings, $1,380 for annual website services, and $389 for annual staff time-keeping software. For each budget it is difficult to anticipate proposal revenue, and in order to be conservative the budget doesn't assume any. Consequently, unexpected revenues and expenses reflect the pass through of these actual costs. LAFCo has not used any of its appropriation for contingencies.
 


BUDGET REPORTS
The Budget Status Summary (Attachment A) is an easy-to-read summary of the budget. The Income Statement Report (Attachment B) shows the amount expended for the quarter, the year to date amount and budget and the percentage of budget used. The General Ledger Report (Attachment C) shows a running balance of all transactions, including both revenue and expenditure amounts.