2012 CAFR - Encina Wastewater Authority

ENCINA WASTEWATER AUTHORITYNOTES TO FINANCIAL STATEMENTSJUNE 30, 2012 AND 2011Note 1 - Organization and Significant Accounting Policies: (Continued)Significant Accounting Policies (Continued)Budgetary ControlsThe Authority prepares a budget that is approved by the Board of Directors and recommended for memberagency approval by the Joint Advisory Committee. Up on approval by all M ember Agencies, the Authorityadopts a resolution appropriating funds and establishing controls on changes in said appropriations. TheGeneral Manager is authorized to transfer appropriations between accounts within the operating or capitalprograms in an amount up to $50,000 per transfer up to $100,000 on any particular contract or agreement,and may also authorize expenditures up to $50,000. The Board of Directors must approve any expenditure ortransfer in excess of $50,000 and any transfer between operating and capital programs. The Authorityadhered to the prescribed budget appropriation policy for the year ended June 30, 2012.Unspent appropriations for the operating budget lapse at Fiscal Year-end unless designated by Board actionto be carried forward to the next budget period. Unspent appropriations for ongoing capital projects arecarried forward to the next budget period.Cash and Cash EquivalentsFor purposes of statement of cash flows, the Authority considers all investment instruments purchased with amaturity of three months or less to be cash equivalents.Subsequent EventsIn preparing these financial statements, the Authority has evaluated events and transactions for potentialrecognition or disclosure through March 4, 2013, the date the financial statements were available to be issued.See also subsequent events discussed in Note 10.Note 2 - Cash and Investments:Investments Authorized by the California Government Code and the Authority’s Investment PolicyThe table below identifies the investment types that are authorized for the Authority by the CaliforniaGovernment Code. The table also identifies certain provisions of the California Government Code that addressinterest rate risk, and concentration of credit risk:See accompanying independent auditors’ report.27