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Uniform Expenditure Reporting System (UERS)

The Constitution required the Economic Estimates Commission (Commission) to establish for each county a base limit from actual expenditures of local revenues of fiscal year 1980. For counties divided into two or more new counties after fiscal year 1980, the Commission determines the base limit as described in A.R.S. §41-563(A)(7) for each of the new counties or the consolidation of counties.

Each year, the Commission calculates the constitutional expenditure limitation for all counties in accordance with A.R.S. §41-563 by adjusting their base limits for any voter-approved permanent base adjustments, changes in population, and inflation since the base year.

The Constitution also provides counties 2 voter-approved options to alter their expenditure limitation. These options include exceeding the expenditure limit for 1 year (one-time override) and permanently adjusting the base limit used to calculate the expenditure limitation (permanent base adjustment). See the voter-approved expenditure limitations FAQs for detailed information on these provisions..

No. The expenditure limitation applies only to expenditures of local revenues as defined by Arizona Constitution, Article IX, §20(3)(d). Generally, local revenues include all monies received by or for the account of the county; however, the Constitution excludes some monies such as grants and aid from the federal government and certain revenues received from the State from the local revenues definition. For a detailed explanation of expenditures not subject to the limitation, see the instructions for UERS forms–part II. In addition, see the Part II—exclusions and carryforward FAQs for further information about calculating and tracking excludable revenue amounts.

In accordance with A.R.S. §41-1279.07(I), a county that exceeds its expenditure limitation without authorization must reduce its maximum allowable primary property tax levy by the excess expenditures amount. Before a county reduces its maximum allowable primary property tax levy, the Arizona Auditor General must hold a hearing to determine if the county has exceeded the expenditure limitation without authorization. To ensure due process, county representatives are invited to attend and participate in this hearing. The allowable levy calculation for the fiscal year after the fiscal year of reduction, and future years, should be calculated without regard to the reduction.

Part I —expenditure limitation amounts and adjustments to expenditures subject to the limitation

Counties can obtain constitutional expenditure limitations from the Arizona Department of Revenue’s Economic Estimates Commission (Commission) website. The Commission should notify counties of their actual expenditure limitations by April 1 for the following fiscal year.

Arizona Constitution, Article IX, §20, includes provisions that allow county boards of supervisors to authorize expenditures in excess of their expenditure limitations for expenditures a natural or manmade disaster directly necessitates in the fiscal year the disaster is declared or in the succeeding fiscal year. There are 3 different scenarios in which these expenditures can be approved:

The Governor declared a disaster.

The Governor did not declare a disaster and amounts were approved by a majority of qualified voters.
The Governor did not declare a disaster and amounts were not approved by a majority of qualified voters.

  • Two-thirds of board of supervisors members must approve the excess expenditures.
  • Expenditures are not subject to the expenditure limitation in the year the Governor declared the disaster or the succeeding fiscal year.
    o Reported on AELR—Part I, line 5.
  • Excess expenditures do not affect the expenditure in subsequent fiscal years.

  • 70 percent of board of supervisors members must approve the excess expenditures.
  • Expenditures are not subject to the expenditure limitation in the year the disaster occurred or the succeeding fiscal year.
    o Reported on AELR—Part I, line 6.
  • Excess expenditures do not affect the expenditure in subsequent fiscal years.

  • 70 percent of board of supervisors members must approve the excess expenditures.
  • Excess expenditures are not subject to the expenditure limitation.
    o Reported on AELR–Part I, line 6.
  • In the fiscal year following the excess expenditures, the board of supervisors must reduce expenditures below the expenditure limit by the amount of the excess expenditures.
    o Reported on AELR—Part I, line 9.


A.R.S. §41-563.01 describes the hearing and public notice requirements for a county council to approve expenditures in excess of the constitutional limit.

A.R.S. §41-563.02 describes the requirements for calling a public election to approve the excess expenditure, if needed. See FAQ #2 above for information on when the expenditures may need to be approved by a majority of qualified electors.

Counties must report the actual expenditures incurred as a result of the disaster on AELR–Part I and attach supporting documentation of the council authorization for those expenditures to the AELR such as the approved resolution, published public notice documenting the council votes, or disaster declaration documentation. In addition, counties must retain adequate documentation to allow their auditors to verify the hearing, public notice, and election requirements were met, as applicable, and documentation that supports the expenditures shown on the AELR–Part I.

A county whose voters have approved a one-time override should include the specific amount by which the county may exceed its expenditure limitation as stated in the resolution, on AELR–Part I, line 5, and subtract the amount from expenditures subject to the limitation.

Part II—exclusions and carryforwards

No. If a county uses nonlocal revenues (e.g., amounts received from the State or grants and aid from the federal government) to make debt service payments, it may not exclude both the debt service payment amount and the nonlocal revenue amount paid. A county may exclude such expenditures only as either the use of nonlocal monies on the appropriate line for the related revenue on the AELR—part II, or as a debt service expenditure on AELR—Part II, line B.1.

Carryforwards are nonlocal (excludable) revenues as defined by the Arizona Constitution, Article IX, §20, that remain unspent at fiscal year-end. A county may carry forward such amounts to subsequent fiscal years and claim exclusions when it spends those revenues. A county should specifically identify carryforwards in its accounting records by fund as to the exclusion’s nature, the carryforward amount, and the fiscal year in which it generated the carryforward.

To calculate exclusions and carryforwards, a county must establish revenue to expenditure flow assumptions to determine what revenues it spent and in what order. The flow assumptions the county uses for the AELR should be consistent with the flow assumptions it uses for the financial statements.

In many cases, the flow assumptions a county uses in preparing the financial statements should be adequate to determine whether it spent local or nonlocal monies when preparing the AELR. However, in some cases, revenues classified the same for financial statement purposes may include both local and nonlocal revenues, such as highway user revenues. In that case, additional assumptions are necessary for the AELR.

For example, the county may assume it spent local revenues first, thereby conserving unspent nonlocal (excludable) revenues for future years to maximize carryforwards. Alternatively, the county may assume that it spent nonlocal revenues first, thereby maximizing available exclusions in the current year. A county may still generate carryforwards under this alternative flow assumption if expenditures of nonlocal revenues are less than the nonlocal revenues received, but such carryforwards would be less than under the first assumption. Click here for examples of both methods’ impact.

No. Counties should consider current financial resources when evaluating whether carryforwards are reasonable. Although governmental fund balances represent current financial resources, they do not necessarily limit carryforward balances. Proprietary fund net position cannot be used to evaluate whether carryforward balances are appropriate or reasonable since it includes the effects of long-term assets, long-term liabilities, and deferred outflows/inflows that do not represent current financial resources.

When evaluating whether calculated carryforward balances are reasonable, counties should:

  • Determine current asset amounts that represent unspent excludable revenues such as unspent interest revenue included in cash balances or amounts due from the State (if the amounts were reported as a revenue when the receivable was recorded).
  • Reduce that amount for current liabilities that will be paid from those assets, as they were already recognized as expenditures in the current year.
  • Counties that use the consumption method of accounting for prepaid expenditures and inventory purchases in their proprietary or governmental funds may count these noncash amounts as carryforward, since the expenditures are not recognized until items are consumed.

    Any cash or receivables included in fund balance that represent local revenue (e.g., unspent property taxes or property taxes receivable) do not represent allowable carryforward balances.

No. The exclusion is available only in the year that the county actually spent the nonlocal revenues. A county may carry forward only nonlocal revenues that remain unspent at fiscal year-end. Further, if a county expends nonlocal revenues carried forward from a prior year but does not choose to exclude those revenues on the current year AELR, the county must still reduce its carryforward balance by the amount spent.

Yes. Expenditures, exclusions, and carryforwards a county reports on the AELR for federal grants should be consistent with what it reports on the SEFA as well as the audited financial statements. The county should report federal grant expenditures on the AELR in the same period it reports them on the SEFA.

Expenditures subject to the limitation are calculated beginning with expenditures/expenses reported in the audited financial statements. Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, requires the SEFA to be presented fairly, in all material respects, in relation to the financial statements taken as a whole. Consequently, since both the AELR and SEFA are related to the financial statements, the 2 reports should be consistent. Although the State and federal laws that mandate the AELR and SEFA do not prescribe flow assumptions for either document, a county should not state in one report that it spent federal awards and state in the other report that it did not spend the federal awards.

Although counties often receive federal monies on a reimbursement basis, the reimbursement is dependent on the county having spent revenues in accordance with a federal program. Therefore, the monies that it spent contingent on receiving federal grant monies are a federal expenditure, which is disclosed on the SEFA. Also, other grant expenditures on the SEFA the county made from federal monies that it received in advance represent actual expenditures of those federal monies. In either case, the federal expenditures shown on the SEFA indicate that the county spent federal monies. Therefore, if the county reports the federal monies as expended on the SEFA, it may not report on the AELR that those monies were not expended and carried forward to future years.

Reconciliation—subtractions and additions

Counties report expenditures, expenses, and deductions in their annual financial statements in accordance with generally accepted accounting principles (GAAP). However, what GAAP defines as an expenditure in the financial statements is not always subject to the expenditure limitation under the basis of accounting the UERS prescribes, and vice versa. Therefore, a county must prepare a Reconciliation to arrive at the amounts to be reported on the AELR—part II.

No. The Arizona Constitution and Arizona Revised Statutes have no provisions allowing a county to exempt expenditures for new or expanded programs/facilities from expenditures subject to its expenditure limitation.

Independent accountants' report

Accountants should follow the American Institute of Certified Public Accountants’ Statements on Standards for Attestation Engagements, AT-C §205, when examining and reporting on the AELR.

The independent accountants’ report on the AELR must express an opinion on whether the AELR is presented in accordance with the UERS in all material respects. The UERS forms provide a sample of an independent accountants’ report containing an unmodified opinion for a county. If the accountants conclude that they cannot express an unmodified opinion on the AELR, the accountants should include a paragraph in the accountants’ report that describes the matter giving rise to the modification.

Filing Requirements

A.R.S. §41-1279.07(C) requires counties to submit an annual expenditure limitation report (AELR), an accountants’ report on the AELR, and audited financial statements to us. The designated CFO must sign or include a digital e-signature on the AELR—Part I.

A.R.S. §41-1279.07(E) requires a county’s governing body (board of supervisors) to designate a chief fiscal officer (CFO) to officially submit the AELR on the governing body’s behalf.

We have developed a template Resolution that the county’s board of supervisors must use to document the CFO designation. The board of supervisors may not delegate the responsibility of designating the CFO. Counties must attach the signed Resolution to our electronic CFO designation form for submittal.

Click here to access the electronic CFO designation form and template Resolution.

A.R.S. §41-1279.07(E) requires counties to provide the Arizona Auditor General the name of the CFO designated to officially submit the current year’s AELR by July 31 each year. The current year is the fiscal year the entity is operating in on July 31. If a new CFO is appointed midyear, counties must submit an updated form and documentation.

AELRs and audited financial statements are due 9 months after fiscal year-end (due March 31 for June 30 fiscal year-end) per A.R.S. §41-1279.07(C). A.R.S. §11-661 requires counties to post their audited financial statements on their official websites within 7 days of filing with the Office. The financial statements must be accessible on the website for at least 60 months.

Example of CFO designation and AELR due dates:

Reporting year CFO designation due date AELR and financial statements due date
FY 2020 July 31, 2019 March 31, 2021
FY 2021 July 31, 2020 March 31, 2022


A.R.S. §11-661 requires a county that has not completed and filed the financial statements required pursuant to A.R.S. §41-1279.07 with the Arizona Auditor General by March 31 to post a Notice of Pending Financial Statements Filing Form on its website until the reports are complete. Further, if the reports are not completed and filed before the county adopts its budget in the subsequent fiscal year, the county must include the late reports form in the published budget. Any county that is required to complete the late reports form must also send a copy of the form to the Arizona Auditor General, Speaker of the Arizona House of Representatives, and President of the Arizona Senate.

A.R.S. §41-1279.07(H) states that a CFO who refuses to file the required reports with the Arizona Auditor General within the prescribed time period or who intentionally files erroneous reports is guilty of a class 1 misdemeanor. An erroneous report is one that contains a material misstatement.

Voter-approved expenditure limitations

Permanent base adjustmentArizona Constitution, Article IX, §20(6), allows a county to permanently adjust its base limit with voter approval at a regularly scheduled general election or at a nonpartisan election held for the nomination or election of its board of supervisors’ members. The Economic Estimates Commission will use the adjustment to calculate the constitutional expenditure limitation beginning with the fiscal year immediately following the fiscal year that voters approve the permanent base adjustment. Permanent base adjustments apply to all future years; however, voters may adopt additional adjustments.

One-time overrideArizona Constitution, Article IX, §20(2)(c), allows a county to exceed its constitutional expenditure limitation with voter approval at a special election held on the third Tuesday in May or at a regularly scheduled election for the nomination or election of board of supervisors’ members. A one-time override allows a county to exceed its constitutional expenditure limitation by a specific amount in the fiscal year after the election. As such, the county’s resolution and ballot language should include the specific amount of excess expenditures that it is asking voters to authorize.

We have prepared a prerecorded webinar titled “Permanent Base Adjustments and One-time Overrides” that addresses the requirements for these proposals and is available for viewing on the counties webinars page. In addition, a list of the statutory requirements for each proposal is available in the links below:

Permanent base adjustment

One-time overrides

In addition, the Arizona League of Cities and Towns publishes a permanent base adjustment guide with information and sample forms. Contact the League at or (602) 258-5786 to request the latest guide.

A county can obtain population projections from the Arizona Office of Employment Opportunity, State Demographer’s Office, at (602) 771-1236.

A.R.S. §41-563.03(D) requires that counties submit permanent base adjustment proposals, including the resolution, detailed analysis, and summary analysis to us for review at least 60 days prior to the election.

In addition, the county must submit a copy of the publicity pamphlet presenting the proposed permanent base adjustment to be voted upon to our Office before the election occurs. After the election has occurred, the county must submit the election results’ official canvass to our Office and the Economic Estimates Commission.

For one-time overrides, counties do not need to submit documentation prior to the election. However, if the override passes, the county must submit a copy of the publicity pamphlet it sent to the voters and the election results’ official canvass to us.