Running on Empty |
Findings: |
Grand Jury Finding Number 1. The amount of financial information cities and the County make available on their respective public websites varies widely, ranging from a minimum of just the current year’s budget to the last ten years of both Comprehensive Annual Financial Reports (CAFRs) and Approved Annual Budgets. |
Agree. Ten years of published CAFRs, Recommended and Adopted budgets are made available to the public on the San Mateo County website. |
Grand Jury Finding Number 2. Government accounting systems and financial statements provided to the public are complex and not readily understandable to the average citizen trying to assess the financial health of their city or county. |
Partially disagree. San Mateo County publishes a Popular Annual Financial Report (PAFR) and has received an award for “Outstanding Achievement in Popular Annual Financial Reporting” from the Government Finance Officers Association (GFOA) the last nine consecutive years. In order to receive this award, a government unit must publish a PAFR, whose contents conform to program standards of creativity, presentation, understandability and reader appeal. |
Grand Jury Finding Number 4. All cities and the County had Unreserved General Fund Balances (reserves) consistent with GASB 34 recommended standards going into the recession, and have managed through the last three years in a way that maintained reserves on June 30, 2010 that were still above those minimum levels. |
Agree. San Mateo County maintains a level of reserves that exceeds GASB 34 minimum requirements. |
Grand Jury Finding Number 5. All cities and the County maintained GASB 34 minimum recommended levels of reserves, whether or not they had city council approved policies requiring maintenance of defined levels of reserves. |
Agree. San Mateo County maintains a level of reserves that exceeds GASB 34 minimum requirements. |
Grand Jury Finding Number 8. Confusion as to how government categorized and interpreted what portion of fund balance was available for discretionary spending led to development of a new GASB 54 standard, effective for all financial statements after June 30, 2011, which provides more structure and clarity around constraints placed on fund balances. San Mateo County implemented GASB 54 early, with the new terminology reflected in its FY 2010 CAFR. No cities in San Mateo County implemented early. |
Partially disagree. San Mateo County implemented GASB 54 and the new terminology in its FY 2008-09 CAFR. |
Grand Jury Finding Number 10. All cities and the County are fully funding their Annual Required Contribution to CALPERS or SamCERA for retiree pension funding. |
Agree. San Mateo County is fully funding its Annual Required Contribution to SamCERA for retiree pension funding. |
Recommendations: |
The 2011 San Mateo Civil Grand Jury recommends: |
A. The San Mateo County Board of Supervisors and each City Council, by July 1, 2012: |
1. Either revise the existing or implement a new policy for specific levels of reserves using language consistent with the new GASB Statement 54 hierarchy. |
a. Establish in the policy the required level of General Fund Balance for classifications that are spendable within the complete control of the government’s local decision making authority. |
Response: |
Agree. The recommendation has not been implemented, but will be implemented by July 1, 2012. The County Manager’s Office will work collaboratively with the Controller’s Office to update San Mateo County’s existing reserves policy to incorporate language consistent with the new GASB 54 statement hierarchy and establish the minimum level of reserves for each classification under complete control of the Board of Supervisors. |
b. Require in the policy development of specific plans to restore the required level of reserves in the event they fall below that level. |
Response: |
Agree. San Mateo County’s existing Reserves Policy includes specific plans to restore the required level of reserves in the event they fall below minimum requirements. |
c. Include the policy in the annual CAFR and budget documents. |
Response: |
Agree. San Mateo County’s existing Reserves Policy is included in the annual CAFR and budget documents. |
2. Direct their City/County Managers to direct their Finance Directors to collaboratively develop a standard “scorecard” that shows how the city/County is doing with respect to key measures of fiscal health and make this available on city/County websites. Update it at least semi-annually or when major changes occur. |
Response: |
This recommendation requires further discussions with the cities and the County to agree on a set of key financial measures to share with the public and on the frequency with which the measures would be updated and published. We will vet this through the San Mateo County Fiscal Officers Group (SamFOG) in the coming months and report back to the FY 2011-12 Grand Jury on the results of those discussions. |
3. Direct their City/County Managers to formally evaluate the value of a clearly defined Running Liquidity metric as an additional measure of the city/county’s fiscal health with specific target minimums, and make a specific recommendation back to the City Council or Board of Supervisors for action. |
Response: |
This recommendation requires further discussions with the cities and the County to agree that a Running Liquidity metric would be a valuable financial key measure to share with the public. We will vet this through the San Mateo County Fiscal Officers Group (SamFOG) in the coming months and report back to the FY 2011-12 Grand Jury on the results of those discussions. |
