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EXPENDITURE LIMITATIONS
- How is
the expenditure limitation determined for a community
college district?
-
Where can I obtain a community college
district’s constitutional expenditure limitation?
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What is a Modified Expenditure Limitation?
EXPENDITURES SUBJECT TO THE LIMITATION
-
Are all expenditures subject to the
limitation?
-
What are “Carryforwards”?
-
What is the penalty for exceeding the
expenditure limitation?
FILING REQUIREMENTS
-
When must a notice of chief fiscal officer
(CFO) be filed with the Auditor General?
-
When are reports due?
-
Can a community college district receive an
extension to file reports?
-
What is the penalty for late reports?
-
What reports must be sent to the Auditor
General’s Office?
EXPENDITURE LIMITATIONS
1.
How is the expenditure limitation determined for a
community college district?
The Economic Estimates Commission
calculates the constitutional expenditure limitation for all
community college districts by adjusting the college’s base year
(generally fiscal year 1979-80) actual expenditures of local
revenues for changes in student population and inflation since
the base year.
2. Where can I obtain a community college district’s
constitutional expenditure limitation?
Constitutional expenditure
limitations can be obtained by contacting Diane Sosinski of the
Arizona Department of Revenue, Office of Economic Research and
Analysis at (602) 716-6797.
3.
What is a Modified Expenditure Limitation?
A.R.S. §15-1471
allows a community college district to
adopt a modified expenditure limitation with voter approval at a
regularly scheduled election on the first Tuesday after the
first Monday in November. The
excess expenditures must be a specified percentage of the
constitutional expenditure limitation. The modified expenditure
limitation becomes effective beginning in the fiscal year
immediately following approval and applies for a period of not
less than 2 years, but no more than 7 years. After that time,
the constitutional expenditure limitation becomes effective
unless a new modified expenditure limitation is approved. The
district board may not authorize expenditures in excess of the
modified expenditure limitation without voter approval.
EXPENDITURES SUBJECT TO THE LIMITATION
1.
Are all expenditures subject to the limitation?
No. The expenditure limitation only applies to expenditures of
local revenues as defined by
Arizona Constitution, Article IX,
§21. Generally, local revenues include all monies received by or
for the account of the community college district; however, some
monies such as grants and aid from the federal government,
certain revenues received from the State, and tuition and fees
are excluded from the definition of local revenues. For a
detailed explanation of expenditures not subject to the
limitation, see the
Uniform Expenditure Reporting System manual
§VIII.
2.
What are “Carryforwards”?
Carryforwards are nonlocal (excludable) revenues as defined by
the
Arizona Constitution, Article IX, §21 that remain unspent at
the end of a fiscal year. Such amounts may be carried forward to
subsequent fiscal years and exclusions claimed when the carried
forward revenues are spent. Carryforwards should be specifically
identified in the entity’s accounting records by fund as to the
nature of the exclusion, the amount of the carryforward, and the
fiscal year in which the carryforward was generated.
3.
What is the penalty for exceeding the expenditure
limitation?
A community college district that
exceeds its expenditure limitation without authorization will
have the following amount of its state aid withheld based
on the percentage of the excess expenditures:
·
If the excess expenditures are less than 5 percent
of the limitation, the amount withheld is equal to the excess
expenditures.
·
If the excess expenditures are between 5 percent
and 10 percent of the limitation, or are less than five percent
of the limitation but it is at least the second consecutive
instance of excess expenditures, the amount withheld is equal to
three times the excess expenditures.
·
If the excess expenditures are equal to 10 percent
or more of the limitation, the amount withheld is equal to five
times the excess expenditures or one-third of its allocation of
state aid, whichever is less.
The penalty is withheld in the fiscal year following a hearing
by the Auditor General.
FILING REQUIREMENTS
1.
When must a notice of chief fiscal officer (CFO) be filed
with the Auditor General?
Statute requires entities to provide to
the Auditor General by July 31 the name of the CFO designated by
the governing board to submit the current year’s expenditure
limitation report. However, we do not require a new notice be
filed if the previously designated CFO has not changed. A notice
should be filed with our Office whenever a new CFO is appointed.
Click here to
download the CFO Designation Form which may be submitted by
e-mail, fax, or mail as described on the form.
2.
When are reports due?
Reports are due 4 months after fiscal
year-end (October 31).
3.
Can a community college district receive an extension to
file reports?
Yes, state law allows our Office to grant
an extension of up to 120 days (4 months), for filing reports.
To receive an extension to file reports, a letter requesting an
extension should be mailed to the
Accounting Services
Division at 2910 North 44th Street, Suite 410, Phoenix, AZ
85018, e-mailed to
asd@azauditor.gov, or faxed to (602) 553-9702. By law we are not able to grant requests for
extensions beyond the 120 days. Therefore, if a longer extension
is requested, only the 120-day extension will be granted. For
more information on extension requests, see our
August 9,
2002, memorandum.
4.
What is the penalty for late reports?
Arizona Revised Statutes §41-1279.07(G)
states that a chief fiscal officer who refuses to file the
required reports with the Auditor General within the prescribed
time period is guilty of a Class 1 misdemeanor.
5.
What reports must be sent to the Auditor General’s
Office?
Community college districts must submit
financial statements and the Annual Budgeted Expenditure
Limitation Report (ABELR) to our Office.
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