To ensure that three-year projections of the spill fund's revenues, expenditures, and fund balances, all of which are used to determine fee rates, are based on accurate financial information, the spill office should consider the reduction in the spill fund's costs, as a result of the recovery of indirect administrative costs, when projecting its fund balance moving forward.
The department followed Department of Finance procedures, using official state accounting records (Calstars and State Controller's Office balances) to prepare the fund condition statement contained in the 2014-15 Governor's Budget. The data contained in these documents account for all activity in the fund, including prior year adjustments that take into account the reduction in the fund's costs as a result of the recovery of indirect administrative costs. The department will continue to follow these procedures, ensuring that the reduction in the fund's costs is accounted for when projecting the fund balance moving forward. The documentation provided to the State Auditor identifies on the source documents the numbers used to develop the 2014-15 fund condition statement.
Fish and Wildlife provided a fund condition statement and its supporting documentation, which originated from official state accounting records. Whereas the previous fund condition statement prepared by the spill office was an informal document that included amounts unsupported by official accounting records, Fish and Wildlife's new fund condition statement reconciles with the amounts reported in the State's accounting records. However, the fund condition statement does not show what impact, if any, the reduction in indirect administrative costs would have on the overall fund balance.
Please refer to our one-year response.
This has been completed. The accounting office has calculated the amount that will be recovered to the fund for 2011-12, and has estimated amounts to be recovered for 2012-13 and 2013-14. While this information was not avalable at the time the 2013-14 Governor's Budget was finalized, these amounts will be accounted for in the fund balance projection that will be displayed in the fund condition statement in the 2014-15 Governor's Budget. Once the fund balance projections are finalized for the 2014-15 Governor's Budget, DFW will send a copy of the fund condition to the California State Auditor.
The department's response indicated that although it had completed this recommendation, it would not be able to provide documentation to support the full implementation until a later date. Thus, we assessed the implementation as "pending."
The department has calculated the amount that will be recovered to the spill fund for the 2011-12 fiscal year, and has estimated amounts to be recovered for the 2012-13 and 2013-14 fiscal years. The department stated that this information will be accounted for in the fund balance projection that will be displayed in the fund condition statement in the 2014-15 Governor's Budget.
The department's six-month response was submitted three months late. In addition, no documents were provided to support its assertion that the recommendation was fully implemented. The department agreed to provide this documentation as part of its one-year response.
Fish and Game stated that its budget office will factor the recovery of indirect administrative costs in its determination of the spill fund's share of these recovered costs. It also indicated that the spill office will consider this recovery when estimating fund projections. (See 2013-406, p. 212)
Agency responses received after June 2013 are posted verbatim.