State of California
Budgetary/ Legal Basis
Annual Report
For the Fiscal Year Ended June 30, 2012
Controller John Chiang
California State Controllers Office
JOHN CHIANG California State Controller
JOHN CHIANG California State Controller
March 26, 2013
To the Citizens, Governor, and Members of the Legislature of the State of California:
I am pleased to submit the State of Californias Budgetary/Legal Basis Annual Report for the fiscal year ended June 30, 2012. This report is prepared in compliance with Government Code section 12460 and in conformance with the Governors Budget and the Budget Act. Each fund statement includes the results of operations including receipts, disbursements, and fund balance. Multi-year comparisons of receipts and disbursements for the General Fund and other fund types also are presented.
The information contained in this report reflects data provided to the State Controllers Office by departments via their year-end financial statements. It is critical that departments provide equivalent revenue and expenditure amounts and classifications in their budget documents submitted to the Department of Finance (DOF), as fund balance and other data used by the DOF to prepare 2013-14 Governors Budget should reconcile with this report.
Major highlights of this report include the following:
General Fund revenues dropped 8 percent from $92.1 billion in fiscal year 2010-11 to $85.5 billion in fiscal year 2011-12. This $6.6 billion decrease resulted primarily from the 2011 Realignment, which shifted retail sales taxes at the rate of 1.0625 percent from the State to local governments per Revenue and Taxation Code section 6201.15, along with the responsibility for certain public safety programs. Also contributing to the decline in revenue was the end to a temporary one percent rate increase to retail sales taxes, which began on April 1, 2009, and was eliminated on July 1, 2011, per Revenue and Taxation Code section 6051.7.
General Fund expenditures dropped 5 percent from $91.8 billion in fiscal year 2010-11 to $87.6 billion in fiscal year 2011-12. This $4.2 billion reduction in expenditures primarily is due to a shift in mental health, healthcare, public safety, and social program responsibility from the State to local governments, as a part of the 2011 Realignment.
The following cost savings measures implemented successfully in fiscal year 2009-10, continued in subsequent fiscal years, but, by comparison, the same measures had a less significant or opposite effect as described below:
The suspension of Proposition 1A has allowed the State to offset local assistance
expenditures with property tax revenue borrowed from local governments. In fiscal year 2011-12 the offsets reducing local assistance expenditures were $42.6 million; this is significantly less than the offsets in prior fiscal years: $3.6 billion in fiscal year 2009-10, and $350 million in fiscal year 2010-11.
In order to reduce the General Fund operating expenditures for fiscal year 2010-11,
Executive Order 11/12-A deferred June 2011 payroll expenditures in the amount of $773 million to fiscal year 2011-12. For the current fiscal year, Executive Order 12/13-A deferred June 2012 payroll expenditures of $753 million to fiscal year 2012-13. This resulted in operating expenditures of $20 million due to the difference between the June 2011 and June 2012 payroll expense.
For the third consecutive year, the State General Fund ended the fiscal year with a deficit fund
balance. The $1.6 billion negative fund balance includes $0.7 billion in deferred payroll; $2.3 billion in reserves; and a negative $4.6 billion in the unreserved-undesignated portion that must be funded before any amount is available for appropriation. Reserved funds are set aside for specific purposes and, therefore, are not available for appropriation.
The Special Fund for Economic Uncertainties (the States rainy day fund) was fully depleted,
resulting in a zero balance at the end of the current fiscal year.
I also have issued the Comprehensive Annual Financial Report (CAFR), prepared in accordance with generally accepted accounting principles (GAAP) in the United States of America, which, in some instances differ from those used to prepare the BLBAR. The CAFR report primarily is intended to meet the needs of users outside of the state government. A reconciliation of these two bases of accounting is contained in the CAFR.
I wish to express my appreciation to State departments for their efforts to submit timely reports. I also am grateful to the members of my staff for their dedicated efforts and professionalism.
Sincerely,
JOHN CHIANG California State Controller
Original signed by:
SUMMARY FINANCIAL STATEMENTS
Combined StatementsCombined Balance Sheet All Fund Types ................................................................................... 6Combined Statement of Operations All Fund Types ................................................................... 8
Comparative StatementsComparative Statement of Actual and Estimated
Revenues All Governmental Cost Funds ............................................................................... 12Comparative Statement of Actual and Budgeted
Expenditures All Governmental Cost Funds .......................................................................... 14
Notes to the Financial Statements .............................................................................. 18
DETAILED FINANCIAL STATEMENTS
Governmental Cost Funds Special Fund Types
General Fund Special AccountsBalance Sheet ................................................................................................................................ 32Statement of Operations ................................................................................................................. 44
Feeder FundsBalance Sheet ................................................................................................................................ 58Statement of Operations ................................................................................................................. 60
Transportation FundsBalance Sheet ................................................................................................................................ 64Statement of Operations ................................................................................................................. 68
Other Governmental Cost FundsBalance Sheet ................................................................................................................................ 74Statement of Operations ................................................................................................................. 156
Nongovernmental Cost Funds
Bond FundsBalance Sheet ................................................................................................................................ 242Statement of Operations ................................................................................................................. 268
Trust and Agency Funds FederalBalance Sheet ................................................................................................................................ 294Statement of Operations ................................................................................................................. 300
Contents
Public Service Enterprise FundsBalance Sheet ................................................................................................................................ 306Statement of Operations ................................................................................................................. 314
Working Capital and Revolving FundsBalance Sheet ................................................................................................................................ 324Statement of Operations ................................................................................................................. 332
Retirement FundsBalance Sheet ................................................................................................................................ 342Statement of Operations ................................................................................................................. 344
Trust and Agency Funds OtherBalance Sheet ................................................................................................................................ 348Statement of Operations ................................................................................................................. 376
STATISTICAL SECTIONGovernmental Cost Funds Revenue and Expenditure Detail
General Fund Statement of Revenues, Expenditures,and Changes in Fund Balance .................................................................................................. 406
Governmental Cost Funds Schedule of Revenues by Source .................................................... 408Governmental Cost Funds Schedule of Expenditures by Function
and Character ........................................................................................................................... 410Governmental Cost Funds Statement of Revenues, Expenditures,
and Changes in Fund Balance .................................................................................................. 412Governmental Cost Funds Detailed Statement of Revenues .................................
