Requesting Establishment/Deletion
of Funds/Agencies
SUBJECT:
REQUESTING ESTABLISHMENT/DELETION OF FUNDS/AGENCIES
NUMBER:
F.3.
DEPARTMENTS & DISTRICTS AFFECTED:
ALL DEPARTMENTS, AGENCIES, AND DISTRICTS GOVERNED
BY THE BOARD OF SUPERVISORS
EFFECTIVE: 11/19/96
REVISED: 1/99
_________________________________
David E. Sundstrom, Auditor-Controller
1.
POLICY
Funds and agencies must be established, and obsolete
funds and agencies must be deleted, either by action
of the Board of Supervisors (Board) or by request
to the Auditor-Controller, with the concurrence
of the County Executive Office (CEO).
1.1
Purpose
To provide control over, and establish a
procedure for, creating new funds and new
agencies, and deleting obsolete funds and
agencies, from the County’s Chart of
Accounts.
1.2
Authority
1.2.1
Government Code Section 25252
Government Code Section 25252 allows
the Board to establish or abolish funds
as necessary for the proper transaction
of the business of the County, and provides
that the Board may by resolution authorize
the Auditor-Controller to perform these
functions.
1.2.2
Board of Supervisors Resolution No.
71-1006
Board Resolution No. 71-1006 dated
September 14, 1971 authorized the Auditor-Controller
to establish and abolish funds as provided
in Government Code Section 25252.
1.2.3
Government Code Section 53684
Government Code Section 53684 allows
the County Treasurer, upon approval
of the Board, to accept deposits of
funds from local agencies into the County
Treasury, upon the adoption of a resolution
by the legislative or governing body
of the local agency authorizing the
investment of funds and with the consent
of the County Treasurer.
1.2.4
Board of Supervisors Resolution No.
97-550
Board Resolution No. 97-550 dated
December 16, 1997 authorized the Treasurer-Tax
Collector to deposit excess funds of
local agencies into the County Treasury
pursuant to Government Code Section
53684, subject to Board approval of
each local agency’s participation,
and the prohibition of participation
by agencies located outside of Orange
County.
1.3
Definition
1.3.1
Fund
A fiscal and accounting entity with
a self-balancing set of accounts in
which cash and other financial resources,
all related liabilities and residual
equities, or balances, and changes therein,
are recorded and segregated to carry
on specific activities or attain certain
objectives in accordance with special
regulations, restrictions or limitations.
1.3.2
Agency
For multiple-agency funds (Fund 100
- General Fund, Fund 101 - Cash Overage
Fund, and Fund 300 - Non-Interest Earning
Trust Fund), agencies are subsets of
the funds. Agencies are classifications
of expenditure requirements into appropriately
identified accounting, budgetary, or
cost centers, as deemed necessary for
management control of the County’s
operations. For example, agencies within
the County General Fund denote separate
County departments and agencies. Similarly,
agencies within Trust Fund 300 denote
separate non-interest earning trust
accounts administered by separate County
departments and agencies. For multiple-agency
funds, agencies utilize one common cash
account. For all other funds, the agency
number and the fund number are the same.
2.
PROCEDURE
2.1
Requirement for New Fund or Agency
2.1.1
Legal/Policy Requirement
In order to be established, a new
fund or a new agency must be required
by state statute or regulation, federal
law or regulation, court order, or other
legal requirement, or must have a compelling
policy or administrative reason for
being established.
2.1.2
County Executive Office Approval
The policy or administrative reason
for the fund or agency must be discussed
with and approved by the CEO before
a request to establish the fund or agency
is prepared.
2.2
Approvals for Establishment of Fund or
Agency
2.2.1
Board of Supervisors’ Approval
A new fund or agency which is required
to be established by the Board, because
the statute, regulation or other authority
requires that the fund or agency be
established by Board action, must be
submitted to the Board on an Agenda
Item Transmittal (AIT). The AIT must
be submitted to the Auditor-Controller
and to the CEO for review, and concurrence
must be obtained from the CEO.
2.2.2
Auditor-Controller/CEO Approval
A new fund or agency which does not
require Board action to be established
must first be discussed with and approved
by the CEO (see 2.1.2 above) before
a request to establish the fund or agency
is prepared. If authorized by the CEO,
the department/agency must request the
new fund or agency to be established
by a letter to the Auditor-Controller,
signed by the department/agency head,
with a copy to the appropriate CEO analyst.
Auditor-Controller staff will review
the request and send the original to
the CEO for concurrence before the fund
or agency is opened.
2.2.3
Board Approval: Mid-Year Creation
If the fund or agency is a budgeted
fund, is created mid-year, and will
require expenditure authority mid-year,
the creation of the fund or agency and
the establishment of estimated revenues
and appropriations pursuant to Government
Code Section 29130 must be submitted
to the Board on an AIT, regardless of
whether or not the fund or agency would
otherwise require Board action to be
established. The AIT must be submitted
to the Auditor-Controller and the CEO
for review, and concurrence must be
obtained from the CEO. The mid-year
establishment of appropriations and
estimated revenue for the new fund or
agency requires a four-fifths (4/5)
vote of the Board, pursuant to Government
Code Section 29130.
2.3
Request for Establishment: Required Information
The AIT or request letter must contain the
following information:
The legal authority for establishing
the new fund or agency;
If no legal authority, the policy/administrative
reason or other authority for establishing
the fund or agency;
Whether or not the fund or agency is
a budgeted fund or agency, and if available,
the Activity Code to be used for this
budget;
A description of the revenue sources
for the fund or agency, and the uses of
the fund or agency;
Any expiration date for the fund or
agency;
Whether the fund will earn its own interest,
or if it does not, which other fund should
receive the interest earned on balances
in the new fund (this does not apply to
new agencies);
If the fund will not earn its own interest,
the reason for the redirection of interest:
legal or contractual provision, or management
decision;
The specific account codings and dollar
amounts of appropriations and estimated
revenues to be established for the fund
or agency, if the fund or agency is being
established pursuant to 2.2.3 above; and
The responsible controlling department
for the new fund or new agency.
For funds with separate cash accounts,
the planned disposition of any residual
account balances when the fund is closed.
Include legal or other authority for the
distribution.
2.4
Authorized Signature List
Once the new fund or agency is approved
by the Board, or by the CEO and the Auditor-Controller,
authorized signature lists for the new fund
or agency must be submitted to those departments
which require them (Auditor-Controller, CEO/Human
Resources, CEO/Purchasing, etc.).
2.5
Department/Agency Head Responsibility
Department/Agency heads are responsible
for all funds/agencies under their control
and must ensure that staff are monitoring
all activity in their funds/agencies, and
that all subsidiary ledger accounts for their
funds/agencies are reconciled to the County’s
General Ledger balances.
2.6
Department/Agency Head Responsibility
2.6.1
Procedure
Funds/Agencies that are no longer
required and which were originally created
by action of the Board must be deleted
by the Board on an AIT explaining the
reasons for the deletion of the funds/agencies.
Funds/Agencies which were originally
created by request to the Auditor-Controller
and CEO must be deleted by a letter
to the Auditor-Controller, signed by
the department/agency head, with a copy
to the appropriate CEO analyst, explaining
the reasons for deletion of the fund/agency.
The Auditor-Controller will obtain CEO
concurrence on all fund/agency deletions.
2.6.2
Request for Deletion: Required Information
The AIT to the Board or the letter
to the Auditor-Controller must include
the following information:
The name and number of the fund/agency
being deleted.
The specific reasons for the deletion
of the fund/agency.
The successor fund/agency which
will receive any residual account
balances and interest earnings from
the deleted fund/agency.
If transfer of residual balances
between a deleted fund/agency and
a successor fund/agency will require
budgetary or other actions which
require Board approval, then the
deletion of the fund/agency and
the related budgetary actions must
be included in the AIT to the Board,
regardless of how the fund/agency
was originally established.
If specific legal or contractual
authority for the disposition of
residual account balances is not
available, the department or agency
requesting closure should obtain
County Counsel approval of the planned
transfer.
2.7
Non-Board Governed Funds/Agencies
2.7.1
Definition
Non-Board governed funds/agencies
are funds/agencies established in the
County Treasury by the Treasurer-Tax
Collector over which the County Board
has no authority, such as school district
funds/agencies and funds/agencies requested
by non-Board governed independent special
districts and cities which use the County
Treasury.
2.7.2
Requirements for Non-Board Governed
Funds/Agencies
Board approval is required for new
funds and agencies for non-Board governed
agencies who are voluntary participants
in the County Treasury, such as cities
and independent locally governed special
districts not otherwise required to
maintain their funds in the County Treasury.
Other non-Board governed funds/agencies,
such as school districts and independent
special districts which are legally
required to use the County Treasury,
are established or deleted by letter
from the Treasurer-Tax Collector, school
districts or independent special district
to the Auditor-Controller. The same
information required in 2.3 above is
required for these types of funds/agencies.
In addition to the information required
in 2.3, all non-Board governed agencies
must provide the statute or other legal
reference which allows or requires them
to deposit funds in the County Treasury,
and must provide the full and complete
legal name of their entity.
A copy of the Auditor-Controller’s
letter establishing these types of funds/agencies
is sent to the CEO. CEO concurrence
for these types of funds/agencies will
only be required for pooled funds/agencies
or other types of Treasurer funds/agencies
which may impact County-governed funds/agencies,
such as commingled interest pool funds/agencies.
2.8
Report to Board and Treasury Committees
The Auditor-Controller will submit a semi-annual
report on an AIT (consent calendar) to the
Board, with copies to the Treasury Oversight
Committee, the Treasury Advisory Committee,
and the CEO, listing all new funds and new
agencies established and all funds/agencies
deleted during the prior six months, including
all non-Board funds established/deleted under
2.7 above. A brief summary of the purpose
and authority for each new fund and agency
will be included in the report, with a reference
to the fact that copies of the requests, Board
actions, and other supporting detail for the
creation/deletion of the funds and agencies
are available at the Auditor-Controller Department.
2.9
Annual Update of County Chart of Accounts
In January each year, the Auditor-Controller
will send a comprehensive update to all holders
of the County’s Chart of Accounts (Orange
Book) which will include all funds and agencies
added and deleted during the prior twelve
months.
Legal