LEGISLATIVE DEPARTMENT, STATE OF COLORADO FINANCIAL AUDIT REPORT YEARS ENDED JUNE 30, 2003 AND 2002_part2 pptx

7 In accordance with Government Auditing Standards, we have also issued our report dated August 22, 2003, on our consideration of the Department’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, and contracts. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Our audits were conducted for the purpose of forming an opinion on the financial statements that collectively comprise the Legislative Department’s basic financial statements. The combining information, as shown on pages 32 through 38, is presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. August 22, 2003 This is trial version www.adultpdf.com LEGISLATIVE DEPARTMENT, STATE OF COLORADO MANAGEMENT’S DISCUSSION AND ANALYSIS YEARS ENDED JUNE 30, 2003 AND 2002 8 OVERVIEW OF THE FINANCIAL STATEMENTS: This discussion and analysis of the Legislative Department’s (the “Department”) financial performance is a required component of financial reporting under governmental accounting standards and was prepared by the Department’s management. It is intended to provide an overview of the financial activities for Fiscal Years ended June 30, 2003 and 2002 and it should be read in conjunction with the financial statements. The financial statements begin on page 12. These financial statements reflect activities of six agencies: General Assembly, Joint Budget Committee, Legislative Council, Office of the State Auditor, Office of Legislative Legal Services, and Reapportionment Commission, when active. Department Financial Statements: The Department’s financial statements consist of fund financial statements and notes to the financial statements. Fund Financial Statements - A fund is a fiscal and accounting entity with a self-balancing set of accounts that the Department uses to keep track of specific sources of funding and spending for a particular purpose. The Department currently has three funds: the General Fund and two Special Revenue Funds. All three funds are governmental funds. Governmental Funds - All of the Department’s services are reported in the governmental funds which focus on how money flows into and out of those funds and the balances left at year-end that are available for future spending. The governmental fund financial statements provide a detailed short-term view of the Department’s operations and the services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the Department's programs. These funds are reported using modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The Department has an annual appropriated budget for its General Fund and Special Revenue Funds. Budgetary comparison schedules have been provided on pages 14-17 to demonstrate compliance with these budgets. The basic governmental fund financial statements can be found on pages 12-17 of this report. Notes to the financial statements - The notes provide additional information that is essential to a full understanding of the data provided in the fund financial statements. The notes to the financial statements can be found on pages 18-31 of this report. Supplemental Information: The financial statements are followed by a section of supplemental information. Combining financial statements are presented for the General Fund and the Special Revenue Funds. This is trial version www.adultpdf.com LEGISLATIVE DEPARTMENT, STATE OF COLORADO MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) YEARS ENDED JUNE 30, 2003 AND 2002 9 Condensed Combined Balance Sheets – Governmental Funds 2003 2002 Change Total Assets $ 1,413,730 $ 2,236,397 $ (822,667) Total Liabilities 2,183,508 2,015,901 167,607 (Deficit) Fund Balance $ (769,778) $ 220,496 $ (990,274) Condensed Combined Statements of Appropriations, Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 2003 2002 Change Total Appropriations and Revenues $ 31,084,698 $ 32,467,861 $ (1,383,163) Total Expenditures 28,928,732 29,414,406 (485,674) Excess of Appropriations and Revenues over Expenditures 2,155,966 3,053,455 (897,489) Total Other Financing Uses (3,146,240) (2,980,578) (165,662) Excess (Deficiency) of Appropriations and Revenues over Expenditures and Other Financing Uses (990,274) 72,877 (1,063,151) Fund Balance – Beginning of Year 220,496 147,619 72,877 (Deficit) Fund Balance – End of Year $ (769,778) $ 220,496 $ (990,274) The Legislative Department’s General Fund is primarily funded by appropriations from the State of Colorado General Fund. The appropriations are supplemented by augmenting revenue as defined in the State’s General Fund budget. The unspent appropriation and augmenting revenue revert to the State’s General Fund and are not available for expenditure by the Department in subsequent fiscal years. At the end of Fiscal Year 2003, the Department’s General Fund reported a deficit fund balance of $1,517,614. This deficit fund balance is due to June 2003 salaries and related benefits being incurred but unpaid at fiscal year end as required by Senate Bill 03-197. This law requires employee salaries to be paid on a monthly basis as of the last working day of the month, except that, as of Fiscal Year 2003, salaries for the month of June are paid on the first working day of July. The Department received the appropriation to pay those salaries on July 1, 2003. In Fiscal Year 2002, the ending fund balance in the Legislative Department’s General Fund was zero. The Department’s Special Revenue Funds are also primarily funded by appropriations from the State of Colorado. The appropriations are supplemented primarily by revenue earned on investments held with the State Treasurer and revenue earned from the sale of publications on the history of the State Capitol. The unspent appropriation and augmenting revenue does not revert to the State and are available for fund- related expenditures in subsequent fiscal years. In Fiscal Years 2003 and 2002, the ending fund balances in the Special Revenue Funds were $747,836 and $220,496, respectively. The increase of $527,340 or 239% was due to lower than anticipated costs for the 2002 ballot information booklet. This is trial version www.adultpdf.com LEGISLATIVE DEPARTMENT, STATE OF COLORADO MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) YEARS ENDED JUNE 30, 2003 AND 2002 10 FINANCIAL ANALYSIS (CONTINUED): Between June 30, 2002 and 2003, the Department’s total assets decreased from $2,236,397 to $1,413,730, or $822,667 (37%). The change in total assets is largely due to the decrease in cash on hand from June 30, 2002 to June 30, 2003 for the Office of the State Auditor. During this period, total liabilities increased from $2,015,901 to $2,183,508, or $167,607 (8%). This change is primarily the result of two offsetting factors. First, there was an increase in liabilities across all agencies in the Department because of the need to record incurred but unpaid payroll expenditures for June 2003, as required under SB 03-197, at June 30, 2003. However, this was largely offset by a decrease in outstanding liabilities related to contract services for the Office of the State Auditor at June 30, 2003 compared to June 30, 2002. In total, these changes resulted in a decrease in fund balances from $220,496 at June 30, 2002 to ($769,778) at June 30, 2003, or $990,274. GENERAL FUND BUDGETARY HIGHLIGHTS: In Fiscal Years 2003 and 2002, state revenues declined and budgets were adjusted downward to reflect the decreasing revenues. As a result, original budgets for both years were adjusted by supplemental appropriations. Budgetary comparison schedules have been provided on pages 14-17. Fiscal Year 2003 Budgetary Highlights: During Fiscal Year 2003, the original budget was amended by several supplemental appropriations resulting in an overall decrease of $4,574,969 from the Department’s original budget. Senate Bill 03-209 amended the Department’s original budget resulting in a decrease of $3,069,371. The original budget was further amended by a supplemental appropriation in Senate Bill 03-197, resulting in a decrease of $1,522,871. The amount of this budget reduction was based on an estimate; the actual salaries and benefits earned, but unpaid as of June 30, 2003 were $1,517,614. In accordance with generally accepted accounting principles, the salary and related benefits are recorded as expenditures in the current fiscal year. However, for budgetary purposes, those payments are reported as expenditures in the following year. In addition, the delay in the payroll disbursement resulted in a significant increase in accrued liabilities and a significant decrease in fund balance for the Department’s General Fund. The budget was also amended by a supplemental appropriation in House Bill 02-1468 resulting in an increase of $15,248 to cover increases to the Department’s contribution to employee’s health, dental and life insurance. Funds were also contributed to cover the expenditures related to the Health Care Task Force, which increased the budget by $2,025. This is trial version www.adultpdf.com LEGISLATIVE DEPARTMENT, STATE OF COLORADO MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) YEARS ENDED JUNE 30, 2003 AND 2002 11 GENERAL FUND BUDGETARY HIGHLIGHTS (CONTINUED): Fiscal Year 2003 Budgetary Highlights (continued): The final General Fund budget for the Department was $30,292,469 and actual expenditures totaled $27,818,653. The difference between the final budget and actual expenditures was $2,473,816, all of which reverted back to the State of Colorado’s General Fund. Of this, $1,797,132 was from the general administration appropriation and is primarily from unspent personal services budgets. In addition, $633,324 was unspent from the welfare reform evaluation appropriation. Smaller amounts were from the tobacco settlement audit, property tax study, and legal fee appropriations. The Department’s original budget for Fiscal Year 2004 is approximately $2 million lower than the Fiscal Year 2003 final budget. The Department will continue to reduce spending to help ensure that no over expenditures occur. Fiscal Year 2002 Budgetary Highlights: During Fiscal Year 2002, the original budget was amended by a supplemental appropriation in House Bill 02-1376 resulting in a decrease of $1,824,627 from the Department’s original budget. The difference between the final budget and actual expenditures was $2,595,183, all of which reverted back to the State of Colorado's General Fund. Of this, $1,954,208 was from the general administration appropriation and is largely from unspent personal services budgets. In addition, $219,701 was unspent from the welfare reform evaluation appropriation and $258,002 from the property tax study appropriation. Smaller amounts were reverted to the State General Fund from tobacco settlement audit, congressional redistricting legal fees, and state redistricting appropriations. REQUEST FOR INFORMATION: This financial report is designed to provide a general overview of the Department’s finances. Questions concerning any of the information provided in this report or requests for additional information should be directed to Tracy Walsh, Accountant, Legislative Council, Room 029 State Capitol, Denver, CO 80203. This is trial version www.adultpdf.com LEGISLATIVE DEPARTMENT, STATE OF COLORADO BALANCE SHEETS - GOVERNMENTAL FUNDS JUNE 30, 2003 AND 2002 Special Special General Fund Revenue Funds General Fund Revenue Funds 2003 2002 ASSETS Cash (Note 2) 253,330$ 748,092$ 1,312,391$ 220,806$ 1,001,422$ 1,533,197$ Accounts receivable 118,245 - 196,491 - 118,245 196,491 Inter/intrafund receivables 294,063 - 506,709 - 294,063 506,709 TOTAL ASSETS 665,638$ 748,092$ 2,015,591$ 220,806$ 1,413,730$ 2,236,397$ LIABILITIES Accounts payable 662,847$ 256$ 1,987,793$ 310$ 663,103$ 1,988,103$ Intrafund payable - - 22,983 - - 22,983 Accrued salaries and benefits (Note 3) 1,517,614 - - - 1,517,614 - Deferred revenue 2,791 - 4,815 - 2,791 4,815 TOTAL LIABILITIES 2,183,252 256 2,015,591 310 2,183,508 2,015,901 (DEFICIT) FUND BALANCES Reserved for specific purposes - 747,836 - 220,496 747,836 220,496 Unreserved (1,517,614) - - - (1,517,614) - TOTAL (DEFICIT) FUND BALANCES (1,517,614) 747,836 - 220,496 (769,778) 220,496 TOTAL LIABILITIES AND FUND BALANCES 665,638$ 748,092$ 2,015,591$ 220,806$ 1,413,730$ 2,236,397$ Governmental Funds Total 2003 2002 The accompanying notes are an integral part of these financial statements. 12 This is trial version www.adultpdf.com LEGISLATIVE DEPARTMENT, STATE OF COLORADO STATEMENTS OF APPROPRIATIONS, REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS YEARS ENDED JUNE 30, 2003 AND 2002 Special Special General Fund Revenue Funds General Fund Revenue Funds 2003 2002 APPROPRIATIONS AND REVENUES Appropriations General Fund 28,601,460$ -$ 30,293,613$ -$ 28,601,460$ 30,293,613$ Cash Fund and Cash Fund Exempt 1,691,009 - 1,744,253 - 1,691,009 1,744,253 Total Appropriations 30,292,469 - 32,037,866 - 30,292,469 32,037,866 Revenues Miscellaneous revenues Audit reimbursements 410,925 - 322,299 - 410,925 322,299 Interest income - 71,627 - 41,475 71,627 41,475 Miscellaneous 301,999 5,000 63,096 15 306,999 63,111 Sale of State Capitol history memorabilia - 2,678 - 3,110 2,678 3,110 TOTAL APPROPRIATIONS AND REVENUES 31,005,393 79,305 32,423,261 44,600 31,084,698 32,467,861 EXPENDITURES Compensation 20,112,572 - 19,472,403 - 20,112,572 19,472,403 Purchased services 3,882,325 1,207,428 5,450,546 159,121 5,089,753 5,609,667 Operating expenditures 2,636,218 297,537 2,909,630 242,045 2,933,755 3,151,675 Travel and subsistence 718,177 - 912,902 - 718,177 912,902 Capital expenditures 71,982 - 267,759 - 71,982 267,759 Debt service 2,493 - - - 2,493 - TOTAL EXPENDITURES 27,423,767 1,504,965 29,013,240 401,166 28,928,732 29,414,406 EXCESS (DEFICIENCY) OF APPROPRIATIONS AND REVENUES OVER EXPENDITURES 3,581,626 (1,425,660) 3,410,021 (356,566) 2,155,966 3,053,455 OTHER FINANCING SOURCES (USES) Capital lease proceeds 40,500 - - - 40,500 - Operating transfers in (out) (1,953,000) 1,953,000 (429,443) 429,443 - - Reversion of non-augmenting revenue (712,924) - (385,395) - (712,924) (385,395) Reversion of General Fund appropriation (1,793,268) - (2,340,634) - (1,793,268) (2,340,634) Reversion of cash/cash exempt appropriation (680,548) - (254,549) - (680,548) (254,549) TOTAL OTHER FINANCING SOURCES (USES) (5,099,240) 1,953,000 (3,410,021) 429,443 (3,146,240) (2,980,578) EXCESS (DEFICIENCY) OF APPROPRIATIONS AND REVENUES OVER EXPENDITURES AND OTHER FINANCING SOURCES (USES) (1,517,614) 527,340 - 72,877 (990,274) 72,877 FUND BALANCES, BEGINNING OF YEAR - 220,496 - 147,619 220,496 147,619 (DEFICIT) FUND BALANCES, END OF YEAR (1,517,614)$ 747,836$ -$ 220,496$ (769,778)$ 220,496$ 2003 Governmental Funds Total 2002 The accompanying notes are an integral part of these financial statements. 13 This is trial version www.adultpdf.com LEGISLATIVE DEPARTMENT, STATE OF COLORADO BUDGETARY COMPARISON SCHEDULE - GENERAL FUND (BUDGET BASIS) YEAR ENDED JUNE 30, 2003 Legislative Long Favorable Appropriations Appropriations Supplemental (Unfavorable) Bill Bill Appropriations Transfers Budget Actual Variance APPROPRIATIONS AND REVENUES Appropriations General Fund 28,601,460$ 28,601,460$ -$ Cash Fund and Cash Fund Exempt 1,691,009 1,691,009 - Total Appropriations 30,292,469 30,292,469 - Revenues Miscellaneous revenue Audit reimbursements - 410,925 410,925 Miscellaneous - 301,999 301,999 TOTAL APPROPRIATIONS AND REVENUES 30,292,469 31,005,393 712,924 EXPENDITURES BY APPROPRIATION General administration 28,492,896$ -$ (3,739,994)$ 783,072$ 25,535,974 23,738,842 1,797,132 Property tax study - 840,000 (120,000) - 720,000 718,966 1,034 Welfare reform evaluation 1,500,000 - (500,000) - 1,000,000 366,676 633,324 Capitol complex leased space - 949,470 - - 949,470 949,470 - Ballot analysis - operating transfer out - 2,170,000 (217,000) - 1,953,000 1,953,000 - Tobacco settlement audit 98,984 - - - 98,984 59,350 39,634 Legal services - 11,242 - - 11,242 8,550 2,692 Purchase of services from computer center - 9,002 - - 9,002 9,002 - Workers' compensation - 8,788 - - 8,788 8,788 - Health care task force - - 2,025 - 2,025 2,025 - General liability / property insurance - 3,984 - - 3,984 3,984 - Salary survey - 783,072 - (783,072) - - - TOTAL EXPENDITURES BY APPROPRIATION 30,091,880 4,775,558 (4,574,969) - 30,292,469 27,818,653 2,473,816 EXCESS OF APPROPRIATIONS AND REVENUES OVER EXPENDITURES AND TRANSFERS - 3,186,740 3,186,740 OTHER FINANCING USES Reversion of non-augmenting revenue - (712,924) (712,924) Reversion of General Fund appropriation - (1,793,268) (1,793,268) Reversion of Cash/Cash Exempt appropriation - (680,548) (680,548) TOTAL OTHER FINANCING USES - (3,186,740) (3,186,740) APPROPRIATIONS AND REVENUES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES - - - FUND BALANCES, BEGINNING OF YEAR - - - FUND BALANCES, END OF YEAR -$ -$ - $ The accompanying notes are an integral part of these financial statements. 14 This is trial version www.adultpdf.com LEGISLATIVE DEPARTMENT, STATE OF COLORADO BUDGETARY COMPARISON SCHEDULE - GENERAL FUND (BUDGET BASIS) YEAR ENDED JUNE 30, 2002 Legislative Long Favorable Appropriations Appropriations Roll Forward Supplemental (Unfavorable) Bill Bill Appropriations Appropriations Transfers Budget Actual Variance APPROPRIATIONS AND REVENUES Appropriations General Fund 30,293,613$ 30,293,613$ -$ Cash Fund and Cash Fund Exempt 1,744,253 1,744,253 - Total Appropriations 32,037,866 32,037,866 - Revenues Miscellaneous revenue Audit reimbursements - 322,299 322,299 Miscellaneous - 63,096 63,096 TOTAL APPROPRIATIONS AND REVENUES 32,037,866 32,423,261 385,395 EXPENDITURES BY APPROPRIATION General administration 26,990,184$ -$ 346,500$ (413,800)$ 650,448$ 27,573,332 25,619,124 1,954,208 Property tax study - 805,000 263,118 (13,000) - 1,055,118 797,116 258,002 Welfare reform 1,500,000 - 552,488 (1,000,000) - 1,052,488 832,787 219,701 Capitol complex leased space - 905,778 - 35,664 - 941,442 941,442 - Redistricting 602,792 - 8,418 - (1,249) 609,961 595,232 14,729 Ballot analysis - operating transfer out - 952,000 - (522,557) - 429,443 429,443 - Congressional redistricting legal fees 200,000 - - - - 200,000 86,305 113,695 Tobacco settlement - - - 85,942 - 85,942 51,094 34,848 Cost of living study - 56,000 - - - 56,000 56,000 - Legal services - 10,985 - - - 10,985 10,985 - Purchase of services from computer center - 9,596 - - - 9,596 9,596 - Workers' compensation - 6,856 - (330) - 6,526 6,526 - Health care task force - - - 4,006 - 4,006 4,006 - General liability / property insurance - 3,579 - (552) - 3,027 3,027 - Salary survey - 649,199 - - (649,199) - - - TOTAL EXPENDITURES BY APPROPRIATION 29,292,976 3,398,993 1,170,524 (1,824,627) - 32,037,866 29,442,683 2,595,183 EXCESS OF APPROPRIATIONS AND REVENUES OVER EXPENDITURES AND TRANSFERS - 2,980,578 2,980,578 OTHER FINANCING USES Reversion of non-augmenting revenue - (385,395) (385,395) Reversion of General Fund appropriation - (2,340,634) (2,340,634) Reversion of Cash/Cash Exempt appropriation - (254,549) (254,549) TOTAL OTHER FINANCING USES - (2,980,578) (2,980,578) EXCESS OF APPROPRIATIONS AND REVENUES OVER EXPENDITURES, TRANSFERS, AND OTHER FINANCING SOURCES (USES) - - - FUND BALANCES, BEGINNING OF YEAR - - - FUND BALANCES, END OF YEAR -$ -$ -$ The accompanying notes are an integral part of these financial statements. 15 This is trial version www.adultpdf.com LEGISLATIVE DEPARTMENT, STATE OF COLORADO BUDGETARY COMPARISON SCHEDULE - SPECIAL REVENUE FUNDS (BUDGET BASIS) YEAR ENDED JUNE 30, 2003 Legislative Long Favorable Appropriations Appropriations Supplemental (Unfavorable) Bill Bill Appropriations Transfers Budget Actual Variance APPROPRIATIONS AND REVENUES Appropriation Ballot Information and Publication Fund 1,953,000$ 1,953,000$ -$ Augmenting revenue Sale of State Capitol history memorabilia - 2,678 2,678 Miscellaneous revenue Interest income - 71,627 71,627 Miscellaneous - 5,000 5,000 TOTAL APPROPRIATIONS AND REVENUES 1,953,000 2,032,305 79,305 EXPENDITURES BY APPROPRIATION Ballot analysis - operating transfer in -$ 2,170,000$ (217,000)$ -$ 1,953,000 1,504,741 448,259 Public building - - - - - 224 (224) TOTAL EXPENDITURES BY APPROPRIATION - 2,170,000 (217,000) - 1,953,000 1,504,965 448,035 EXCESS OF APPROPRIATIONS AND REVENUES OVER EXPENDITURES AND TRANSFERS - 527,340 527,340 FUND BALANCES, BEGINNING OF YEAR - 220,496 220,496 FUND BALANCES, END OF YEAR -$ 747,836$ 747,836$ The accompanying notes are an integral part of these financial statements. 16 This is trial version www.adultpdf.com . version www.adultpdf.com LEGISLATIVE DEPARTMENT, STATE OF COLORADO MANAGEMENT’S DISCUSSION AND ANALYSIS YEARS ENDED JUNE 30, 2003 AND 2002 8 OVERVIEW OF THE FINANCIAL STATEMENTS: This discussion and. intended to provide an overview of the financial activities for Fiscal Years ended June 30, 2003 and 2002 and it should be read in conjunction with the financial statements. The financial statements. version www.adultpdf.com LEGISLATIVE DEPARTMENT, STATE OF COLORADO STATEMENTS OF APPROPRIATIONS, REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS YEARS ENDED JUNE 30, 2003 AND 2002 Special