During the course of routine business, the Finance Department prepares fund transfers. The Finance Department shall bring forth each year the transfers for the Board's review, discussion, and approval to remain compliant with A.R.S. § 42-17106.
A.R.S. § 42-17106. Expenditures limited to budgeted purposes; transfer of monies. A. Except as provided in subsection B, a county, city or town shall not: 1. Spend money for a purpose that is not included in its budget. 2. Spend money or incur or create a debt, obligation, or liability in a fiscal year in excess of the amount stated for each purpose in the final adopted budget for that year, except as provided by law, revenue in excess of that amount required to meet expenditures, debts, obligations, and liabilities that are incurred under the budget. B. A governing body may transfer monies between budget items if all of the following apply: 1. The monies are available. 2. The transfer is in the public interest and based on a demonstrated need. 3. The transfer does not result in a violation of the limitations prescribed in article IX, sections 19 and 20, Constitution of Arizona. 4. A majority of the members of the governing body votes affirmatively on the transfer at a public meeting.
In addition to the necessary budgeted inter-fund transfers, recent guidance from the Arizona Auditor General's Office requires a transfer of EXPENSES to the CARES Act Fund (1116) to relieve those expenses incurred in the general fund whose eligibility for CARES Act fund reimbursement was determined by the Governor's Office in the 3rd and 4th fiscal quarters of Gila County Fiscal Year 2020.
March 7, 2020 - December 30, 2020, CARES (Coronavirus Aid, Relief, and Economic Security) Act Funding - disbursed to Gila County Treasurer from Arizona Governor's Office on 6/17/2020 in the amount of $2,960,977. Deposit made to a separate fund for tracking as instructed by the original agreement
AZCARES Fund - Contract #ERMT-20-041, March-December 2020
Determination from the Arizona Auditor General's Office in the 2nd quarter of Calendar Year 2021 (10 months subsequent to deposit & after the completion of both the SEFA and all 2020 business transactions) requires the following:
The expenses approved by Arizona Governor's Office at the initial County Request for CARES Act Funding (i.e. public safety & health salaries and employee-related expenses) be determined for the period 3/7/2020 - 6/30/2020 and 7/1/2020 - 12/30/2020
The portion that occurred from July 1, 2020 to December 30, 2020 be recorded as "unearned revenue" for financial statement preparation purposes
All amounts related to CARES Act Funding (i.e. public safety & health salaries and employee-related expenses) be transferred from original expense accounts (i.e. general fund) to the CARES Act Fund (#1116 at Gila County).
In addition, audit staff currently auditing the 2020 SEFA have requested a Payroll Authorization Form for each employee whose wages and benefits were included in the calculation for CARES Act eligibility.
Consequently, staff requests permission to transfer $2,960,977 of expenses from Law Enforcement and Health Salaries and employee-related expenses to Fund 1116 (CARES Act Fund) as attached.
Note: For financial statement presentation purposes, unearned revenue of $1,249,063.05 on June 30, 2020, was determined to be "an asset of the federal government".
Further, because we were working with the information we had at the time of the initial deposit, the initial end of the fiscal year, and now that information has changed, staff wishes to assure the public that any and all action was taken since the beginning of COVID-19 has been "documented, communicated, and defensible, but most importantly correct" as per Guidehouse documentation advisement. |