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ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION (A Component Unit of the County of Alpine, California) Annual Financial Statements June 30, 2012 ---PAGE BREAK--- Table of Contents Page Independent Auditor’s Report 1-2 Management’s Discussion and Analysis 3-8 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Assets 9 Statement of Activities 10 Fund Financial Statements: Balance Sheet – Governmental Funds 11 Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Assets – Governmental Activities 12 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 13 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of the Governmental Funds to the Government-Wide Statement of Activities – Governmental Activities 14 Notes to Financial Statements 15-21 Required Supplementary Information: Budgetary Comparison Schedule – Planning Fund 22 Budgetary Comparison Schedule – Local Transportation Fund 23 Note to Required Supplementary Information 24 Supplementary Information: Overall Work Program – Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual by Funding Source – Planning Fund 25-26 Schedule of Allocations and Expenditures – Local Transportation Fund 27 Other Reports: Independent 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 with Government Auditing Standards 28-29 Independent Auditor’s Report on Compliance Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with the Statutes, Rules and Regulations of the California Transportation Development Act and the Allocation Instructions and Resolutions of the Local Transportation Commission 30 ---PAGE BREAK--- 1 INDEPENDENT AUDITOR’S REPORT Board of Supervisors County of Alpine Markleeville, California We have audited the accompanying financial statements of the governmental activities and each major fund of the Alpine County Local Transportation Commission (the Commission), as of and for the year ended June 30, 2012, 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 opinions on these 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 in Government 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Commission’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to previously present fairly, in all material respects, the financial position of the governmental activities and each major fund, as of June 30, 2012, and the changes in 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 March 21, 2013, on our consideration of the Commission’s internal control over financial reporting and on 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. Accounting principles generally accepted in the United States of America require that the management discussion and analysis and budgetary comparison information on pages 3 through 8 and 22 through 24 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which ---PAGE BREAK--- 2 consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Commission’s financial statements. The supplementary information, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the accompanying supplementary information is fairly stated in all material respects in relation to the financial statements as a whole. Clovis, California March 21, 2013 ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION Management’s Discussion and Analysis For the Year Ended June 30, 2012 3 As management of the Alpine County Local Transportation Commission (Commission), we offer readers of the Commission’s financial statements this narrative overview and analysis of the Commission’s financial activities for the fiscal year ended June 30, 2012. We encourage readers to consider the information that we have furnished in the Commission’s financial statements, which immediately follows this section. Financial Highlights The assets of the Commission exceeded its liabilities at the close of the most recent fiscal year by $122,045 (net assets). Of this amount, $107,704 is restricted the use of which is limited to specific purposes and $14,341 is unrestricted and available to meet ongoing obligations to citizens and creditors. As of June 30, 2012, the Commission’s governmental funds reported combined fund balances of $71,300, an increase of $721 in comparison with the prior year. Amounts available for spending include $107,704 restricted by the Transportation Development Act reduced by a deficit of $36,404 arising from the activities of the Commission’s planning (general) fund. The deficit balance reported as unassigned results from grant revenues that reimburse expenditures included in this report but not received until after the sixty day period of availability used as criteria for recognizing grant revenues. The Commission’s activities are guided by the Overall Work Program (OWP) used to apply for State Rural Planning Assistance Funds (RPA) and other available financial resources, all directed toward the continuous update and improvement of Regional Transportation Plans in the County. In fiscal year 2011-12, the Commission incurred program expenditures of $174,569, a decrease of $14,237, or 7.5% from last year’s programmed expenditures. Program activities were funded by grant revenues of $123,824 recognized this fiscal year and grant revenues of $50,745 that because they were received after the sixty day period of availability will be recognized as revenues in the following fiscal year. 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 required supplementary information in addition to the basic financial statements themselves. The government-wide financial statements are designed to provide readers with a broad overview of the Commission’s finances, in a manner similar to a private-sector business. These statements provide both long-term and short-term information about the Commission’s overall financial status. 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 may ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION Management’s Discussion and Analysis For the Year Ended June 30, 2012 4 serve as a useful indicator about whether the financial position of the Commission is improving or deteriorating. 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 flow. Thus revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods. The government-wide financial statements report the functions of the Commission that are principally supported by sales taxes and intergovernmental revenues, or governmental activities. The governmental activities of the Commission included only one function, public ways and facilities. A fund is a grouping of related accounts that is used to maintain 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. All of the funds of the Commission are classified as governmental funds. The Commission did not have any proprietary funds or fiduciary funds. Governmental funds are used to account for essentially the same function(s) reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on how cash and other financial assets can readily be converted to available resources and the balances left at year-end that are available for spending. Such information may be useful in determining what financial resources are available in the near future to finance the Commission’s program activities. 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 funds balance sheet and the governmental funds statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Commission maintains three individual governmental funds presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures and changes in fund balances. These funds are the Planning fund, the Local Transportation fund and the State Transit Assistance fund, all of which are considered to be major funds. The Commission did not have any nonmajor funds. The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information that includes budgetary comparison schedules. The Commission adopts an annual appropriated budget for its Planning fund and the Local Transportation fund. A budgetary comparison has ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION Management’s Discussion and Analysis For the Year Ended June 30, 2012 5 been provided for these funds to demonstrate compliance with this budget. Immediately following the required supplementary information is certain supplementary information included to satisfy certain compliance requirements. Government-Wide Financial Analysis The following table compares the Statement of Net Assets at June 30, 2012 and 2011: 2012 2011 Change Assets: Cash and investments 83,212 $ 53,244 $ 29,968 $ Receivables 67,088 82,873 (15,785) Total assets 150,300 136,117 14,183 Liabilities: Accounts payable 28,255 26,538 1,717 Total liabilities 28,255 26,538 1,717 Net assets: Restricted net assets 107,704 101,240 6,464 Unrestricted net assets 14,341 8,339 6,002 Total net assets 122,045 $ 109,579 $ 12,466 $ Governmental Activities 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 $122,045 at the close of the most recent fiscal year, an increase of $12,466, or 11.38% during the year. By far the largest portion of the Commission’s net assets is restricted net assets representing resources that are subject to external restrictions on how they may be used. These balances include the Commission’s Local Transportation Fund and the State Transit Assistance Fund. During the fiscal year, restricted net assets increased $6,464, or 6.4%. Unrestricted net assets in the amount of $14,341, or 11.75% of total net assets, may be used to meet the Commission’s ongoing obligations to citizens and creditors. Unrestricted net assets which increased $6,002, or 71.97%, are solely from the Commission’s planning fund. At the end of the current fiscal year, the Commission reported positive balances in both categories of net assets. The Commission’s total net assets increased $12,466 during the fiscal year ended June 30, 2012. When compared to the prior year, revenues decreased $25,850, or and Commission expenses decreased $38,177, or 13.27%. ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION Management’s Discussion and Analysis For the Year Ended June 30, 2012 6 The following table shows the changes in net assets for governmental activities: 2012 2011 Change Revenues: Program revenues: Operating grants and contributions 187,243 $ 210,790 $ (23,547) $ General revenues: Sales taxes 74,477 56,538 17,939 Interest earned 315 557 (242) Return of unused funds - 20,000 (20,000) Total revenues 262,035 287,885 (25,850) Expenses: Public ways and facilities 249,569 287,746 (38,177) Change in net assets 12,466 139 12,327 Net assets at beginning of year 109,579 109,440 139 Net assets at end of the year 122,045 $ 109,579 $ 12,466 $ Governmental Activities The Commission’s total program and general revenues were $262,035, while the total cost of all programs was $249,569. Approximately 75% of the costs of the Commission’s programs were paid by grants with the remainder mostly financed with sales taxes. Governmental Funds As noted earlier, the Commission uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The focus of the Commission’s governmental funds 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. At June 30, 2012, the Commission’s governmental funds reported combined ending fund balances of $71,300, a slight increase of $721 in comparison with the prior year. The components of fund balance are as follows and are available for appropriation at any time: Restricted for Transportation Development Act activities: consists of balances in the Local Transportation Fund and State Transit Assistance Fund. Expenditures are allocated and made in accordance with Transportation Development Act (TDA) regulations. Unassigned fund balance: This is the balance in the Commission’s planning fund at the end of the fiscal year. Because grant revenues reimbursing current year expenditures were received after the period of availability and could not be accrued to this fiscal year, fund balance was negative. ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION Management’s Discussion and Analysis For the Year Ended June 30, 2012 7 Key elements for the changes in fund balances are as follows: Rural planning assistance revenues decreased from $185,837 to $71,082 because this year’s fourth quarter reimbursement of $50,745 was received after the period of availability and could not be accrued to this fiscal year. State Transportation Improvement Program funds increased from $0 to $56,000 because last year’s allocation of $39,000 could not be accrued and is included in this year’s revenue. A portion of this year’s allocation in the amount of $17,079 could not be accrued because it was not received in time to be accrued at June 30, 2012. The Planning fund’s LTF allocation this year was $25,790 less than the prior year. Each year’s allocation is based on the nature of programmed activities and the availability of other funding sources. Sales tax revenues increased from $56,538 last year to $74,477 this year. The increase is the result of modest economic recovery in the region. Planning expenditures are the result of programmed activities which vary from year to year. This year’s programmed activities compared to last year’s activities is as follows: Work Element FY 2012 FY 2011 Change TDA Administration 16,494 $ 25,842 $ (9,348) $ Planning/Program Administration 11,042 30,222 (19,180) Planning & Interagency Coordination 22,149 26,238 (4,089) STIP Project Monitoring 34,079 20,102 13,977 ADA Paratransit Plan - 9,645 (9,645) Improve Subdivision Road Standards 17,195 21,042 (3,847) GIS Update 24,916 25,514 (598) Bicycle and Pedestrian Transportation Plan 16,466 5,000 11,466 Regional Transportation Plan - 23,526 (23,526) Pavement Management System Update 30,599 - 30,599 Other Activities 1,629 1,675 (46) 174,569 $ 188,806 $ (14,237) $ Budgetary Highlights In June of 2011, the Commission adopted the fiscal year 2011-12 Overall Work Program and Budget (OWP) with an operating budget of $202,000. The Commission’s OWP was revised during the year to reflect adjustments based on Commission actions, final prior fiscal year-end adjustments, additions or deletions in pending grant funding and revisions to the work plan. The final amendment was adopted on May 1, 2012, amending the operating budget to $203,000. ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION Management’s Discussion and Analysis For the Year Ended June 30, 2012 8 Changes between the final budget, adopted in June 2011, and the final amended budget adopted May 2012, were primarily the result of changes in grant funding combining for an overall increase in revenues and programmed activities of $1,000. Actual revenues were $34,174 less than budgeted because final grant reimbursements for the year could not be accrued in either fiscal year. Actual expenditures were $28,431 less than budgeted because of project delays. 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 Alpine County Auditor’s Office at P.O. Box 266, Markleeville, California 96120. ---PAGE BREAK--- GOVERNMENT-WIDE FINANCIAL STATEMENTS ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION (A Component Unit of the County of Alpine) Statement of Net Assets June 30, 2012 Governmental Activities ASSETS Cash and investments 83,212 $ Taxes receivable 2,558 Due from other governmental agencies 64,426 Interest receivable 104 Total Assets 150,300 LIABILITIES Accounts payable 28,255 Total Liabilities 28,255 NET ASSETS Restricted for Transportation Development Act activities 107,704 Unrestricted 14,341 Total Net Assets 122,045 $ The accompanying notes are an integral part of these financial statements. 9 ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION (A Component Unit of the County of Alpine) Statement of Activities For the Year Ended June 30, 2012 Net (Expenses) Revenues and Program Changes in Net Revenues Assets Operating Governmental Expenses Grants Activities Functions / Programs Governmental Activities: Public ways and facilities 249,569 $ 187,243 $ (62,326) $ Total Primary Government 249,569 $ 187,243 $ (62,326) General Revenues: Taxes - Sales taxes 74,477 Interest earned 315 Total General Revenues 74,792 Change in Net Assets 12,466 Net Assets, Beginning of Year 109,579 Net Assets, End of Year 122,045 $ The accompanying notes are an integral part of these financial statements. 10 ---PAGE BREAK--- FUND FINANCIAL STATEMENTS ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION (A Component Unit of the County of Alpine) Balance Sheet - Governmental Funds June 30, 2012 Local State Planning Transportation Transit Fund Fund Assistance Totals ASSETS Cash and investments - $ 48,120 $ 35,092 $ 83,212 $ Interest receivable (23) 89 38 104 Taxes receivable - 2,558 - 2,558 Due from other governmental agencies 62,745 - 1,681 64,426 Due from other funds 2,800 22,926 - 25,726 Total Assets 65,522 $ 73,693 $ 36,811 $ 176,026 $ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 28,255 $ - $ - $ 28,255 $ Deferred revenues 50,745 - - 50,745 Due to other funds 22,926 2,800 - 25,726 Total Liabilities 101,926 2,800 - 104,726 FUND BALANCES Restricted for Transportation Development Act activities - 70,893 36,811 107,704 Unassigned (36,404) - - (36,404) Total Fund Balances (36,404) 70,893 36,811 71,300 Total Liabilities and Fund Balances 65,522 $ 73,693 $ 36,811 $ 176,026 $ The accompanying notes are an integral part of these financial statements. 11 ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION (A Component Unit of the County of Alpine) Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Assets - Governmental Activities June 30, 2012 Fund Balance - Total Governmental Funds 71,300 $ Amounts reported for governmental activities in the statement of net assets are different because: Deferred revenue represents amounts that are not available to fund current expenditures and, therefore are not reported in the governmental funds. 50,745 Net Assets of Governmental Activities 122,045 $ The accompanying notes are an integral part of these financial statements. 12 ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION (A Component Unit of the County of Alpine) Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2012 Local State Planning Transportation Transit Fund Fund Assistance Totals REVENUES Sales and use tax - $ 74,477 $ - $ 74,477 $ Intergovernmental 169,082 - 6,416 175,498 Interest (256) 401 170 315 Total Revenues 168,826 74,878 6,586 250,290 EXPENDITURES Allocations - 75,000 - 75,000 Planning and administrative 174,569 - - 174,569 Total Expenditures 174,569 75,000 - 249,569 CHANGE IN FUND BALANCES (5,743) (122) 6,586 721 Fund Balance, Beginning of Year (30,661) 71,015 30,225 70,579 Fund Balance, End of Year (36,404) $ 70,893 $ 36,811 $ 71,300 $ The accompanying notes are an integral part of these financial statements. 13 ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION (A Component Unit of the County of Alpine) Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of the Governmental Funds to the Government-Wide Statement of Activities - Governmental Activities For the Year Ended June 30, 2012 Net Change to Fund Balance - Total Governmental Funds 721 $ Amounts reported for governmental activities in the statement of activities are difference because: Governmental fund revenues deferred at year end due to unavailability, and therefore, deferred under the modified accrual method of accounting, were recognized as revenue on the full accrual method of accounting. This is the net of the prior year unavailable revenues with the current year balance. 11,745 Change in Net Assets of Governmental Activities 12,466 $ The accompanying notes are an integral part of these financial statements. 14 ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION Notes to Financial Statements For the Year Ended June 30, 2012 15 Note 1: Summary of Significant Accounting Policies The financial statements of the Alpine County Local Transportation Commission (Commission) are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The Commission’s reporting entity applies all relevant Governmental Accounting Standards Board (GASB) pronouncements. Proprietary funds and similar component units apply Financial Accounting Standards Board (FASB) pronouncements and Accounting Principles Board (APB) opinions issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements, in which case, GASB prevails. A. Reporting Entity The Commission receives monies from the State of California and allocates those monies for the planning, management, and operation of public transportation systems within the County of Alpine (County). The Commission also has the authority to allocate monies for other transportation related activities including streets and roads projects. The Commission is governed by the County Board of Supervisors serving in a separate capacity as the governing board of the Commission. As such, the Commission is an integral part of the County and, accordingly, the accompanying financial statements are included as a component unit of the basic financial statements of the County. B. Basis of Presentation Government-wide Statements – The statement of net assets and the statement of changes in net assets report information on all of the governmental activities of the Commission. These statements include the financial activities of the overall government except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between governmental and business-type activities of the Commission. Governmental activities, which are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to an extent on charges and fees from the public for support. The Commission had no business-type activities to report for the year ended June 30, 2012. The statement of activities demonstrates the degree to which the program expenses of a given governmental function are offset by program revenues. Program expenses include direct expenses which are clearly identifiable with a specific function and allocated indirect expenses. Program revenues include charges paid by recipients of goods or services offered by the programs and grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Taxes and other items, which are properly not included among program revenues, are reported instead as general revenues. Fund Financial Statements – The fund financial statements provide information about the Commission’s funds. The emphasis of fund financial statements is on major governmental funds, each ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION Notes to Financial Statements For the Year Ended June 30, 2012 16 displayed in a separate column. Any remaining governmental funds are aggregated and reported as nonmajor funds. The Commission reports the following major governmental funds: Planning Fund – The planning fund acts as the general fund for the Commission and all planning and administrative activities are accounted for in this fund. Local Transportation Fund – This fund accounts for revenues received and allocations made for certain transit and streets & roads projects within the County. Revenues are generated from a ¼ cent sales tax imposed by the State of California pursuant to the Transportation Development Act (TDA). Sales tax revenues are collected by businesses within Alpine County and are remitted to the State Board of Equalization (SBE). The SBE, after deducting an administrative fee, remits the revenues to the County on a basis. Expenditures of these monies must be made in accordance with TDA regulations. State Transit Assistance Fund – Revenues for this fund are earned based on a portion of the State gasoline tax. The tax is allocated to the County by the State Controller’s Office based on demographic factors. The Commission did not have any nonmajor governmental funds at June 30, 2012. C. Basis of Accounting The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the Commission considers revenues to be available if they are collected within sixty days of the end of the current fiscal period. Those revenues susceptible to accrual are sales taxes, intergovernmental revenues (grants), and interest revenues. Nonexchange transactions in which the Commission gives (or receives) value without directly receiving (or giving) equal value in exchange include sales taxes, grants, entitlements and donations. On the accrual basis, revenues from sales taxes are recognized when the underlying transactions take place. Revenues from grants, entitlements and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied. Nonexchange transactions are recognized under the modified accrual basis of accounting using the same criteria except that nonexchange revenues are deferred to the subsequent period when the “available” criteria has not been met. ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION Notes to Financial Statements For the Year Ended June 30, 2012 17 A fund reports deferred revenue on its balance sheet. Deferred revenues arise when potential revenue does not meet the “measurable” and “available” criteria for recognition in the current period. Deferred revenues also arise when resources are received by the fund before it has a legal claim to them, as when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or when the fund has a legal claim to the resources, the liability for deferred revenue is removed from the balance sheet and revenue is recognized. D. Allocations The Commission allocates anticipated Local Transportation Fund and State Transit Assistance Fund revenues to various claimants on an annual basis. Local Transportation Fund allocations for one year may be carried over to another year at the discretion of the Transportation Commission, while State Transit Assistance Fund allocations are valid for a two-year period. E. Cash and Investments Cash is held by the Commission with the County in an investment pool in order to facilitate the management of cash. Each fund’s portion of this pool is displayed on the balance sheet as “cash and investments.” On a quarterly basis, the County Treasurer allocates interest to the various funds based upon the average cash balances. Information regarding categorization of investments, risk and fair value reporting can be found in the County’s financial statements. The Alpine County Treasury Oversight committee oversees the Treasurer’s investment policies and practices. The Commission adheres to the County’s deposit and investment policy that addresses specific types of risk. Required risk disclosures for the County’s investment in the County’s Investment Pool at June 30, 2012, were as follows: 2012 Credit risk Not rated Custodial risk Not applicable Concentration of credit risk Not applicable Interest rate risk (average maturity) 148 days Investments held in the County’s investment pool are available on demand and are stated at cost plus accrued interest, which approximates fair value. ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION Notes to Financial Statements For the Year Ended June 30, 2012 18 F. Due from Other Governments These amounts represent receivables from other local governments and consist mostly of grants and sales tax revenues. Management has determined the Commission’s receivables to be fully collectible. Accordingly, no allowance for doubtful accounts has been made. G. Interfund Transactions Interfund transactions are reflected as loans, services provided, reimbursements or transfers. Loans are reported as receivables and payables as appropriate, are subject to elimination upon consolidation and are referred to as either “due to/from other funds” the current portion of interfund loans) or “advances to/from other funds” the noncurrent portion of interfund loans). Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures. Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers are netted as part of the reconciliation to the government –wide presentation. H. Capital Assets Capital assets are recorded at historical cost or estimated historical cost if actual cost is not available. Contributed capital assets are valued at their estimated fair market value on the date contributed. The Commission defines capital assets as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Capital assets used in operations are depreciated using the straight-line method over their estimated useful lives. The estimated useful lives of the assets are as follows: Equipment 3-10 Years I. Net Assets The financial statements utilize a net assets presentation. Net assets are shown as restricted and unrestricted. Restricted Net Assets – This category presents external restrictions imposed by creditors, grantors, contributors or laws and regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. Unrestricted Net Assets – This category represents net assets of the Commission not restricted for any projects or other purposes. When both restricted and unrestricted net assets are available, unrestricted resources are used only after the restricted resources are depleted. ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION Notes to Financial Statements For the Year Ended June 30, 2012 19 J. Fund Balance In governmental funds, the following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used: Nonspendable fund balance – amounts that cannot be spent because they are either not spendable in form or legally or contractually required to remain intact. Restricted fund balance - amounts with constraints placed on their use by those external to the Commission, including creditors, grantors, contributors or laws and regulations of other governments. It also includes constraints imposed by law through constitutional provisions or enabling legislation. Committed fund balance – amounts that can only be used for specific purposes determined by formal action of the Commission’s highest level of decision-making authority (the Commission’s Board) and that remain binding unless removed in the same manner. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period. Assigned fund balance – amounts that are constrained by the Commission’s intent to be used for specific purposes. The intent can be established at either the highest level of decision making or by a body or an official designed for that purpose. Unassigned fund balance – the residual classification that includes amounts not contained in the other classifications. The Commission’s board establishes, modifies or rescinds fund balance commitments and assignments by passage of a resolution. When restricted and unrestricted resources are available for use, it is the Commission’s policy to use restricted resources first, followed by unrestricted committed, assigned and unassigned resources as they are needed. K. Use of Estimates The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from these estimates. ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION Notes to Financial Statements For the Year Ended June 30, 2012 20 Note 2: Interfund Transactions Interfund balances were for goods and services provided and short-term loans to cover cash deficits. These balances are expected to be repaid in the next fiscal year. Interfund balances at June 30, 2012, consisted of the following: Receivable Fund Payable Fund Amount Planning fund Local Transportation fund 2,800 $ Local Transportation fund Planning fund 22,926 25,726 $ Note 3: Capital Assets A summary of changes in capital assets during the year ended June 30, 2012, is as follows: Balance Balance July 1, 2011 Additions Retirements June 30, 2012 Vehicle and equipment 8,819 $ - $ - $ 8,819 $ Accumulated depreciation (8,819) - - (8,819) - $ - $ - $ - $ Note 4: Deficit Fund Balances / Net Assets Deficit fund balances as of the fiscal year ended June 30, 2012, were as follows: Planning fund $ 36,404 The deficit occurred because grant revenues reimbursing current year expenditures were received after the period of availability and could not be accrued to this fiscal year. The deficit will be eliminated in the next fiscal year when grant revenues are received. Note 5: Related Party Transactions The Commission has an agreement with the County to manage its operations. The County also provides engineering and construction services to the Commission upon request. Total costs of services provided to the Commission for the year ended June 30, 2012 was $ 47,525. ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION Notes to Financial Statements For the Year Ended June 30, 2012 21 Note 6: Insurance and Risk of Loss The Commission is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Commission is insured against these types of losses through participation in the County’s public entity risk pool. Note 7: Contingencies The Commission receives grants from various State and Federal Agencies for specific purposes that are subject to review and audit by the grantor agencies. Although such audits could generate expenditure disallowances under the terms of the grants, it is believed that any required reimbursements will not be material and if material, not estimable at this time. Therefore, no liability of this nature has been included in these financial statements. ---PAGE BREAK--- REQUIRED SUPPLEMENTARY INFORMATION ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION (A Component Unit of the County of Alpine) Budgetary Comparison Schedule Planning Fund For the Year Ended June 30, 2012 Budgeted Amounts Actual Variance with Original Final Amounts Final Budget BUDGETARY FUND BALANCE, JULY 1 (30,661) $ (30,661) $ (30,661) $ - $ RESOURCES (inflows): Intergovernmental 275,673 275,673 169,082 (106,591) Use of money and property - - (256) (256) Amounts Available for Appropriation 245,012 245,012 138,165 (106,847) CHARGES TO APPROPRIATIONS (outflows) Planning and administration 200,033 200,033 174,569 25,464 Total Charges to Appropriations 200,033 200,033 174,569 25,464 BUDGETARY FUND BALANCE, JUNE 30 44,979 $ 44,979 $ (36,404) $ (81,383) $ Reconciliation of Budgetary Inflows and Outflows to GAAP Revenues and Expenditures Sources / inflows of resources: Actual amounts available for appropriation from the budgetary comparison schedule 138,165 $ Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not current-year revenue for financial reporting purposes 30,661 Total revenues as reported on the statement of revenues, expenditures, and changes 168,826 $ in fund balances - governmental funds 22 ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION (A Component Unit of the County of Alpine) Budgetary Comparison Schedule Local Transportation Fund For the Year Ended June 30, 2012 Budgeted Amounts Actual Variance with Original Final Amounts Final Budget BUDGETARY FUND BALANCE, JULY 1 71,015 $ 71,015 $ 71,015 $ - $ RESOURCES (inflows): Sales and use tax 47,000 47,000 74,477 27,477 Use of money and property - - 401 401 Amounts Available for Appropriation 118,015 118,015 145,893 27,878 CHARGES TO APPROPRIATIONS (outflows) Allocations 80,000 80,000 75,000 5,000 Total Charges to Appropriations 80,000 80,000 75,000 5,000 BUDGETARY FUND BALANCE, JUNE 30 38,015 $ 38,015 $ 70,893 $ 32,878 $ Reconciliation of Budgetary Inflows and Outflows to GAAP Revenues and Expenditures Sources / inflows of resources: Actual amounts available for appropriation from the budgetary comparison schedule 145,893 $ Differences - budget to GAAP: The fund balance at the beginning of the year is a budgetary resource but is not current-year revenue for financial reporting purposes (71,015) Total revenues as reported on the statement of revenues, expenditures, and changes 74,878 $ in fund balances - governmental funds 23 ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION Note to Required Supplementary Information For the Year Ended June 30, 2012 24 Note 1: Budgetary Accounting The Commission annually adopts a budget through the preparation of an overall work program. This work program describes the projects, or work elements, that are to be funded, and the type of funds that will pay for the expenditures, such as Rural Planning Assistance, Local Transportation, or State Transportation Improvement Program (STIP PPM). The work project, in draft form, is prepared by Commission staff, submitted and approved by the Commission, and submitted to the State of California, Department of Transportation (CALTRANS) before June 30th. CALTRANS, as the grantor of Rural Planning Assistance, State Subvention and STIP funds, approves the work program, which then becomes the budget of the operating fund of the Commission. From the effective date of the budget, which is adopted and controlled at the departmental level, the expenditures as proposed become appropriations. The legal level of control is the fund level. The Commission may amend the budget by resolution during the fiscal year. Appropriations lapse at the end of the year. Budgets are adopted on a budgetary basis which is materially the same as those used to present financial statements in conformity with GAAP, except that transfers in are regarded as inflows of resources for budgetary purposes and not revenues for GAAP financial statement presentation and transfers out are considered outflows of resources for budgetary purposes but not expenditures for GAAP financial statement presentation. Additional sources and uses of revenue not included in the Commission’s overall work program are incorporated to compute the Commission’s budget that reflects all anticipated activities for the year. The Commission did not adopt a budget for the State Transit Assistance fund for the fiscal year ended June 30, 2012, because no revenues or appropriations were anticipated. ---PAGE BREAK--- SUPPLEMENTARY INFORMATION ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION (A Component Unit of the County of Alpine) Overall Work Program Statement of Revenues, Expenditures and Changes in Fund Balance - by Work Element Planning Fund - Budget and Actual (on a Budgetary Basis) For the Year Ended June 30, 2012 Actual Regional State Planning Transportation Budget Assistance Improvement Other REVENUES Rural planning assistance 126,000 $ 71,082 $ - $ - $ STIP PPM 47,000 - 56,000 - Transportation Enhancement funds - - - 12,000 Local Transportation Fund 30,000 - - 30,000 Interest - - - (256) Total Revenues 203,000 71,082 56,000 41,744 EXPENDITURES 11/12-1 TDA Administration 15,000 - - 16,494 11/12-2 Planning/Program Administration 10,000 10,728 - 314 11/12-3 Planning & Interagency Coordination 37,000 21,107 - 1,042 11/12-4 STIP Project Monitoring 47,000 - 34,079 - 11/12-5 Pavement Mgmt System Update 33,000 30,583 - 16 11/12-6 Improve Subdivision Road Standards 13,000 17,062 - 133 11/12-7 Way Finding Plan - - - 963 11/12-8 GIS Update 36,000 24,389 - 526 11/12-9 Bicycle and Pedestrian Planning 12,000 16,458 - 8 11/12-10 Airport Layout Plan and CIP Update - - - 667 Total Expenditures 203,000 120,327 34,079 20,163 CHANGE IN FUND BALANCES - $ (49,245) 21,921 21,581 Fund Balance, Beginning of Year (1,500) (39,000) 9,839 Fund Balance, End of Year (50,745) $ (17,079) $ 31,420 $ 25 ---PAGE BREAK--- Variance Totals with Budget 71,082 $ (54,918) $ 56,000 9,000 12,000 12,000 30,000 - (256) (256) 168,826 (34,174) 16,494 (1,494) 11,042 (1,042) 22,149 14,851 34,079 12,921 30,599 2,401 17,195 (4,195) 963 (963) 24,915 11,085 16,466 (4,466) 667 (667) 174,569 28,431 (5,743) (62,605) $ (30,661) (36,404) $ 26 ---PAGE BREAK--- ALPINE COUNTY LOCAL TRANSPORTATION COMMISSION (A Component Unit of the County of Alpine) Schedule of Allocations and Expenditures Local Transportation Fund For the Year Ended June 30, 2012 Allocations Allocations Outstanding Outstanding Allocations PUC June 30, 2011 Allocated Expended Adjustments June 30, 2012 Alpine County Local Transportation Commission 99233.1 - $ 30,000 $ 30,000 $ - $ - $ Alpine County Transit 99400(c) - 45,000 45,000 - - County Streets and Roads 99400(a) - 25,000 - (25,000) - - $ 100,000 $ 75,000 $ (25,000) $ - $ 27 ---PAGE BREAK--- OTHER REPORTS ---PAGE BREAK--- 28 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Board of Supervisors County of Alpine Markleeville, California We have audited the financial statements of the governmental activities and each major fund of Alpine County Local Transportation Commission (the Commission), as of and for the year ended June 30, 2012, and have issued our report thereon dated March 21, 2013. 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 in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting Management of the Commission is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the Commission’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Commission’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Commission’s internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Commission’s financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined previously. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Commission’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The ---PAGE BREAK--- 29 results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of management, Board of Supervisors, others within the entity, and federal and state awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Clovis, California March 21, 2013 ---PAGE BREAK--- 30 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH THE STATUTES, RULES, AND REGULATIONS OF THE CALIFORNIA TRANSPORTATION DEVELOPMENT ACT AND THE ALLOCATION INSTRUCTIONS AND RESOLUTIONS OF THE LOCAL TRANSPORTATION COMMISSION Board of Supervisors Alpine County Local Transportation Commission Markleeville, California We have audited the basic financial statements of the Alpine County Local Transportation Commission (the Commission) as of and for the year ended June 30, 2012, and have issued our report thereon dated March 21, 2013. 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 in Government Auditing Standards, issued by the Comptroller General of the United States. As part of obtaining reasonable assurance about whether the Commission’s basic financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. Additionally, we performed tests to determine that allocations made and expenditures paid by the Commission were made in accordance with the allocation instructions and resolutions of the Commission and in conformance with the California Transportation Development Act. Specifically, we performed each of the specific tasks identified in the California Code of Regulations Sections 6666 and 6667 that are applicable to the Commission. In connection with our audit, nothing came to our attention that caused us to believe the Commission failed to comply with the Statues, Rules, and Regulations of the California Transportation Development Act and the allocation instructions and resolutions of the Local Transportation Commission. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. This report is intended solely for the information and use of the County of Alpine, the Alpine County Local Transportation Commission, management, the California Department of Transportation, and the State Controller’s Office and is not intended to be and should not be used by anyone other than these specified parties. Clovis, California March 21, 2013