LOS ANGELES COUNTY CHILDREN AND FAMILIES FIRST – PROPOSITION 10 COMMISSION NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2009
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Adjustments Between Fund Financial Statements and Government-Wide Financial Statements (Continued)
Under the modified accrual basis of accounting, revenue is recognized in the fund financial statements if it has been collected after year-end within the Commission’s established availability period of 60 days, the uncollected balance is deferred at year-end in the fund financial statements. Deferred revenue of $6,025,099 was recognized as revenue in the government-wide financial statements during the year ended June 30, 2009.
The Commission entered into an agreement with a tenant to pay for the cost of improvements and the Commission is to be reimbursed. Revenue will be recognized over the life of the tenant lease. At June 30, 2009, $75,813 was deferred in the government-wide financial statements and $38,714 was recognized as revenue. The Commission received State School Readiness funds in excess of allowable expenditures in the amount of $2,009,527. This amount is deferred in the fund and government-wide financial statements.
Revenues related to prior years that are available in the current year are reported in the general fund. In contrast, revenues that are earned but unavailable in the current year are deferred in the general fund. For government-wide purposes, the change in revenues represents revenues earned but unavailable in the current year in the amount of $1,805,159.
As of June 30, 2009 the Commission estimated its liability for vested compensated absences to be $275,875. Compensated absence obligations are considered long-term in nature and are reported in the fund financial statements as expenditures in the period paid or when due and payable at year-end under the modified accrual basis of accounting. The compensated absences have been accrued in the government-wide financial statements and are included in long-term liabilities. The change in compensated absences during the year of $5,440 is reported in the statement of activities and does not require the use of current financial resources.
Fund Balance and Net Assets
The fund balance of the Commission are reserved funds constrained by state law for use for early childhood development and school readiness programs, and unreserved. As such, in accordance with GASB No. 34, the fund balance has been reclassified to invested in capital assets and restricted on the statement of net assets.
The Commission participates in the common investment pool of Los Angeles County. In addition, the Commission has a specifically invested portfolio with the Los Angeles County Treasurer’s Office. Investments are recorded at fair value.