Review and File Fiscal Year 2024/25 Fourth Quarter Financial Update

Review and File Fiscal Year 2024/25 Fourth Quarter Financial Update

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 2024/25 budget was adopted on May 23, 2024. At the meeting on June 26, 2025, the Commission approved a budget adjustment to move $15,000 from Salaries and Benefits into Services and Supplies to pay for several unanticipated contracts for the Elkhorn Fire Protection District. The contracts were approved with the understanding that salary savings could be used for the expense. During the fourth quarter, LAFCo remained on track with regard to both revenue and expenditures and closed the fiscal year "in the black."

REVENUES
At the end of the fourth quarter of FY 2024/25, LAFCo had received $692,769 (102.49%) of its budgeted revenue of $675,962, exceeding estimates in a few accounts: LAFCo fees exceeded the budget by $16,481 and investment earnings by $10,026. The extra revenue will carry over to be used for our next budget at year-end. LAFCo's overall revenue came from the following sources: agency funding (80%), use of available fund balance (16%), and fees and investments (4%).

EXPENDITURES
LAFCo total expenditures after the fourth quarter of FY 2024/25 were $565,148 (84%) of the annual budget costs of $675,962. Salaries and Benefits ended the fiscal year at 85% of the amount budgeted, largely due to new employees beginning slightly later than expected. Regarding Salaries and Benefits accounts, in lieu of health insurance payments were being charged to Health Insurance (account 501130) while funding was allocated to Other Employee Benefits (account 501190) per County budget instructions. Therefore, the Health Insurance account appears over budget, only because the funds were allocated to a different account.

Services and Supplies closed at 95% of the budget. A few accounts under Services and Supplies significantly exceeded appropriations during this fiscal year. As occurred last year, County staff charged LAFCo for water, sewer, and HVAC services under the Maintenance-Building (510071) account rather than the Transfer Out (540500-3005) account created for these charges as recommended by the County's Budget Instructions. This resulted in the Maintenance-Building account being charged $2,896 and exceeding the appropriation of $250 by 1,158% despite the funds being allocated to the 540500-3005 account. Office Expense (510110) was 268% of the amount budgeted, and a computer was entered under Minor Equipment (51091) which did not have an allocation. These items should have been budgeted in anticipation of new staff being brought in this year. Finally, Professional Legal Services (510256) and Other Professional Services (510275) were respectively $6,960 and $6,453 over budget from the original budget due to unexpected costs relating to the Elkhorn Fire Protection District proposal. With the budget adjustment in June, funds that were transferred to Other Professional Services (510275) more than covered the expenses, so that the Total Services and Supplies closed under budget. BUDGET REPORTS
The Budget Status Summary (Attachment A) is an easy-to-read summary of the budget. The General Ledger Report (Attachment B) shows a running balance of all transactions, including both revenue and expenditure amounts.