FIRST 5 RIVERSIDE RIVERSIDE COUNTY CHILDREN & FAMILIES COMMISSION

A public entity funded from Proposition 10 tobacco tax funds

ANNUAL AUDIT REPORT Year Ended June 30, 2008

First 5 Riverside Riverside County Children & Families Commission Financial Statements Year Ended June 30, 2008
TABLE OF CONTENTS Independent Auditors Report Managements Discussion and Analysis Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets Statement of Activities Fund Financial Statements: Balance Sheet - Governmental Funds Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Southern California Alliance for Learning and Results - Agency Fund Notes to Financial Statements Required Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual General Fund Other Supplementary Information School Readiness Program Balance Sheet Schedule of Revenues, Expenditures and Changes in Fund Balances Retention Incentives for Early Care and Education Providers Program Balance Sheet Schedule of Revenues, Expenditures and Changes in Fund Balances Special Needs Program Balance Sheet Schedule of Revenues, Expenditures and Changes in Fund Balances Healthy Kids Program Balance Sheet Schedule of Revenues, Expenditures and Changes in Fund Balances Affordable Building for Children Development - Packard Foundation Balance Sheet Schedule of Revenues, Expenditures and Changes in Fund Balances Low Income Investment Funding - Packard Foundation Balance Sheet Schedule of Revenues, Expenditures and Changes in Fund Balances Schedule of Local Match Expenditures for State Initiative Programs PAGE i 1 - 10

11 12

13 14 15 16 17 18 - 29

30

31 32

33 34

35 36

37 38

39 40

41 42 43

First 5 Riverside Riverside County Children & Families Commission Financial Statements Year Ended June 30, 2008
TABLE OF CONTENTS - Continued PAGE COMPLIANCE SECTION Independent Auditors Report on Compliance and on Internal Control Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditors Report on State Compliance Managements Response and Corrective Action Plan

44 - 45 46 - 47 48 - 49

MANAGEMENTS DISCUSSION AND ANALYSIS

As management of Riverside County Children and Families Commission (First 5 Riverside), we offer this narrative overview and analysis of the financial activities of the Commission for the fiscal year ended June 30, 2008. We encourage readers to consider this information in conjunction with the Commissions basic financial statements and accompanying notes. Financial Highlights The Commission received $28,544,042 from Prop 10 revenues, compared to $27,887,624 received in the 2006/07 fiscal year, an increase of $656,418, or approximately 2.35%. As of June 30, 2008, the Commissions funds reported a combined ending fund balance of $61,450,612. Fund balances are reported as outlined in the First 5 financial management guide and GFOA. Of the total fund balance $12,854,637 is reserved for funding obligations to local contracts and required cash match for First 5 California initiatives, which includes $8,281 reserved for prepaid expenditures. The remaining unreserved balance of $48,595,975 represents unreserved-designated funding of $16,028,931 for local initiatives and programs, $26,734,998 for program sustainability, and $5,832,046 unreserved not designated. Investment income decreased form FY 2006/07 $2,597,722 to FY 2007/08 $2,544,547 or -2.05%.

During the fiscal year ending June 30, 2008, the Commission directed approximately $22,000,000 to local programs to support the healthy development of young children. Overview of Financial Statements This discussion and analysis are intended to serve as an introduction to the Commissions basic financial statements, which are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary and compliance information. Government-wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the Commissions finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of the Commissions assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Commission is improving or deteriorating. The statement of activities presents information showing how the Commissions net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., Proposition 10 revenue allocated in June and distributed in July).

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Both the government-wide financial statements distinguish functions of the Commission that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The Commission does not have business-type activities. The government-wide financial statements can be found on pages 11 and 12 of this report. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Commission, like other governmental entities, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the Commissions activities are accounted for in the general fund. Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a governments near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the Commissions near-term financing decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The basic governmental fund financial statements can be found on pages 13-16 of this report.

The Commission adopts an annual appropriated budget for its general fund. comparison statement has been provided for the general fund on page 30.
Notes to the Financial Statements

A budgetary

The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 18-29 of this report. Other information In addition to the basic financial statements and accompanying notes, this report also presents other supplementary information for special funding for four state initiatives.

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Government-wide Financial Statement Analysis The following summarizes the Commissions assets, liabilities and net assets and compares FY 2007/08 with FY 2006/07.

FY 2007/08 Assets: Current and other assets Capital assets Total Assets Liabilities Long-term liabilities Other liabilities Total liabilities Net Assets Restricted for state initiatives Invested in capital assets Total net assets

FY 2006/07

Percent Increase (Decrease)

$ 65,285,878 77,894 $ 65,363,772

$ $

58,615,284 97,666 58,712,950

11.38% -20.24% 11.33%

$ $

88,555 3,962,698 4,051,253

$ $

83,361 2,749,915 2,833,276

6.23% 44.10% 42.99%

$ 61,234,625 77,894 $ 61,312,519

$ $

55,782,008 97,666 55,879,674

9.77% -20.24% 9.72%

The Commissions total net asset increased by $5,633,845, this increase is due to investment income and Prop 10 revenues exceeding projected expectations, and under expenditures of contract awards.

Other liabilities increased by over $1.2 million. The increase in accounts payable from prior year is due to the 18 month funding cycle for operational contract awards for the period of 1/1/2007-6/30/2008. At the close of the fiscal year 2006/07 the accounts payable for operational contracts was based on 6 months of an actual expenditures for an 18 month funding cycle, and many of the programs expenditures were below the 6 month award budget due to slow start ups. The year end accrual for operational contracts for FY 2007/08 was for 12 months of the 18 month funding period in which many of the contract final payments were higher because it was the close of the funding period.

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The following is a summary of the Commissions revenue, expenses and change in net assets comparing FY 2007/08 with FY 2006/07. Percent Increase (Decrease)

FY 2007/08 Revenues Program revenues Prop10 revenues Tobacco tax School Readiness Child Care Retention Special Needs Healthy Kids Total program revenues General Revenues Investment income Other income Total general revenues Total Revenues Expenditures Child Development Total Expenditures Net Change in Net Assets Net Assets, Beginning of Year Prior Period Adjustment Net Assets, End of Year

FY 2006/07

25,404,439 1,971,177 566,388 234,715 367,323 28,544,042

24,737,436 2,014,221 566,112 205,034 364,821 27,887,624

2.70% -2.14% 0.05% 14.48% 0.69% 2.35%

$ $ $

2,544,547 267,479 2,812,026 31,356,068

$ $ $

2,597,722 188,441 2,786,163 30,673,787

-2.05% 41.94% 0.93% 2.22%

$ $ $ $ $

25,360,695 25,360,695 5,995,373 55,879,674 (562,528) 61,312,519

$ $ $

27,276,995 27,276,995 3,396,792 52,482,882 -

-7.03% -7.03% 76.50% 6.47% 100.00% 9.72%

55,879,674

Program Revenues Program revenues overall increased $656,418 or 2.35% in FY 2007/08 from FY 2006/07. Prop 10 Tobacco Tax revenue is disbursed form California State First 5 agency to 58 counties throughout California based on the live birth rates for each county. While total Prop 10 revenues disbursed to counties decreased at the State level from prior year $451,562,723 to $442,394,748 in FY 2007/08 (approximately -2.03%), Riverside County realized a slight increase in Prop 10 revenue $667,003 (2.7% increase). This increase is due to an increase in Riverside County's live birth rate. This birth rate increase resulted in Riverside getting a greater percentage of Prop 10 allocation available to all counties for disbursement throughout the State.

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FY 2007/08 disbursements of School Readiness State funds decreased primarily due the State changing its policy of State Program disbursements. In prior years the State disbursed School Readiness funds according to program budget rather then actual program expenditures which often resulted in State School Readiness funds being held at the County. Now the State requires that all unspent program funds must be tracked in an interest bearing account and all eared interest must be returned to the state unless the County elects for a reimbursement only method of collecting State program funding. First 5 Riverside has opted for the reimbursement method of payment. State Special Needs initiative had a budget of $250,000 for FY 2007/08 and as anticipated, the program is fully operational. It had revenues of $234,715 and expended $250,000 in FY 2007/08. State Healthy Kids initiative revenue remains relatively unchanged form prior year. The number of qualified enrollees by health insurance provider IEHP remains an issue for Riverside County which prohibits First 5 from realizing the full benefit of the State award for Healthy Kids Program. Decline in enrollment is partly due to IEHP budget constraints in continuing insurance for enrollees after age 5 which limits the number of children 0-5 that they are able to enroll. General Revenues

Investment income for FY2007/08 decreased $53,175 (-2.09%) over fiscal year 2006/07. At the beginning of FY 2007/08 just under half ($24,701,844) of the Commissions funds were held in specific directed investments and the remaining ($24,614,995) in the Riverside County Investment Pool. As of October 2007, all investments were held in the Riverside County Investment Pool due to a greater yield than other available direct investment opportunities. At the start of the FY 2007/08 fiscal year, the County Pool Rate was 5.17%. At the close of the 2007/08 fiscal year, the County Pool Rate was 3.20%. GASB 31 requires agencies to report any unrealized gains or losses on investment and securities held. At the close of FY 2006/07 First 5 reported unrealized gain of $18,107.83 while at the close of FY 2007/08, First 5 reported an unrealized gain of $16,019, the net difference is an unrealized loss of $2,088 for FY 2007/08.
Salaries and Benefits Salaries and Benefits realized only a slight increase of 0.5% from FY 2006/07 to FY 2007/08. While most positions did receive a cost of living increase and an annual performance review increase, the impact of these increases were off set by a 8.36% vacancy rate Professional and Specialized Services

Contract expenditures for FY 2007/08 decreased $1.9 million from FY 2006/07. In FY 2006/07 First 5 issued 6 month extensions of FY 05/06 operational awards for the period of 7/1/200612/31/2006. In addition, Operational 18 month contract awards were issued for the period of 1/1/2007-6/30/2008. Because expenditures of the 6 month extensions were greater than 6 month budget for the 18 month awards the overall contract expenditures for FY 2006/07 were greater then the over contract expenditures for FY 2007/08.

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Governmental Fund Analysis The following is a comparison of total fund balance components between FY 2007/08 and FY 2006/07: Percent Increase (Decrease)

FY 2007-08 Fund Balances Reserved for: Obligations Pre Paid School readiness initiative Special needs initiative Contract Obligations for Health Contract Obligations for Childcare Capacity Building Initiative Preschool for All Initiative Evaluation First 5 California Initiatives CARES Match Healthy Kids Match School Readiness Match Special Needs Match Reserve for Encumbrance Unreserved: Designated Undesignated Imprest fund Undesignated Total Fund Balances

FY 2006-07

8,281 1,015,764 261,521 464,313 776,948 676,596 1,805,027 6,230,009 834,064 782,115 42,763,928 306,021 5,526,025

7,551 979,409 13,643 -

2,405,027 8,453,602 4,982 1,032,115 1,964,651 40,774,348 350,000 $ 55,985,328

9.67% -100.00% -100.00% 100.00% 100.00% 100.00% 100.00% 100.00% -24.95% -26.30% 16641.53% -24.22% -100.00% 4.88% -12.57% 100.00% 9.00%

61,450,612

Reserved Fund balance is categorized in two sections, reserved for obligations, and reserved for First 5 state Initiatives. Reserved for Obligations is comprised of funds received in a prior or current year, obligated for a specific purpose to an identified vendor in a future period. The Commission revised the 5 year fiscal plan in February 2008 to discontinue setting aside current year surplus revenues for future state initiatives and sustainability (reso 08-06). The Commission voted to utilize funds previously designated for future state initiatives in three equal amounts, for programs in the goal areas of health, child care, and education respectively. Three contracts in the area of Health and one in the area of Child Care were identified and approved for funding in addition to setting aside funding for State School Readiness required cash match. The approved contracts total $1,277,285, cash match for School Readiness $508,983. The remainder of the previously designated amount, $ 2,750,160 is reported as Unreserved designated, and will be made available in a request for proposal in FY 08/09 for one time program funding opportunity. Decrease in State School Readiness is due to recording of a prior period adjustment to reclassify equity to deferred revenue and record a liability related to an overpayment of School Readiness funds recognized

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as revenue in the prior year. In prior years the State distributed School Readiness funds based on the budget for the fiscal year which was often in excess of program expenditures. The full amount of school readiness disbursements in past program years posted to revenue when the amount of revenue recognized in the fiscal period should have only been the amount of program expense for the fiscal period, the remaining revenue received should have been posted to deferred revenue. This prior period adjustment will correct School Readiness revenue recognition for future program years. Decrease in Special needs initiative represents expense of state funds issued in FY 2006/07 for program expenditures in current year. Reserved amounts for First 5 California Initiatives represent a required cash match in order to receive the State initiative program funds. These funds were designated in resolution 06-04 by the commission in January 2006. Per the First 5 California Financial Management Guide, this designation is to be identified as reserved. Based on GFOA and/or state audit guidelines, unreserved fund balance is categorized in two distinctive sections, Designated and Undesignated. The changes in the designated and undesignated fund balances are due to the revision of the five-year fiscal plan for the period of 7/1/2006 6/30/2011 made by the Commission in February 2008 which suspends future contributions to sustainability fund and reserves for future state initiatives. Funds that were previously designated for future state initiatives have been contracted or in the process of getting contracted for services in the three goal areas of health, education, and childcare. The increase of undesignated funds is a result of the following factors 1. FY 2007/08 Prop 10 revenue allocation exceeding budget by 2.5 million, 2. Interest income exceeding budget by 1.1 million, 3. 18 month operational contracts under spending by 1.1 million in FY 2007/08 4. FY 2007/08 savings in salaries and administrative operations of $500,000. 5. Revision of 5 year fiscal plan to discontinue designation of surplus funds to sustainability. . Capital Assets

The Commissions investment in capital assets as of June 30, 2008, amounts to $77,894 (net of accumulated depreciation). Increase of $19,265 represents new computer purchases to replace outdated work stations. Decrease of ($317) is the write off of an outdated computer that was not fully depreciated. Balance Beginning of Year Machinery and Equipment Accumulated Depreciation Capital Asset, Net
$ 320,664 (222,998) $ 97,666 $

Increases
$ 19,265 (38,720) (19,455)

Decreases
$ (1,269) 952 $ (317)

Balance End of Year

$ 338,660 (260,766) $ 77,894

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General Fund Budgetary Highlights This section contains an explanation of the significant differences between the commissions Final Budget amounts and actual amounts. There are no modification between the original budget and the final budget. FY 2007/08, the Commission earned actual tobacco taxes of $25.4 million, which was $2.4 million more than estimated. The increase is due to increases in births in Riverside County. Interest Income for FY 2007/08 was $2.5m whereas the budget was estimated at $1.5m. The Rate of Return was higher than anticipated. Professional and Specialized Services actual amount was $22.2m whereas the budget amount is $27.9m. The difference of $5.7m is due to contracts being under spent in FY2007/08 and contracts that were planned to be awarded in FY 2007/08 however, did not get finalized until FY2008/09. In the areas of Education the amount is $1.3m, Health is $2.8m, and Child Care is $1.6m.

The Commission adopts an annual appropriated budget for its general fund. comparison statement has been provided for the general fund on page 30.
Economic Factors and Next Years Budget

A budgetary

As the state of California faces economic hardship, First 5 works towards providing sustainability and maintaining the objectives and goals of Prop 10 funds while include exploring evaluating the additional needs of children 0-5 created by the shortfall of program funding though out the State. As State revenue shortfalls continue to be an issue, First 5 Prop 10 fund balances are subject to much political debating both at the state and local levels. Some legislators have proposed to remove local control of Prop 10 program funding and redirect funds for purposes other than its intended use. While the likelihood of the loss of local control of Prop 10 program funding is unknown, (and would require voter approval), it is a factor that is carefully addressed both at the State and local levels. Count First 5s are required to approve long term funding plans. In resolution 06-04, adopted January 23, 2006, the Commission committed funds for specific Local Initiatives for the next five years and a sustainability fund designed to sustain funding of current services levels despite the anticipation of diminished Proposition 10 tax revenues in future years. The table below outlines Commission approval of reserve funds for a 5 year fiscal plan covering FY 2006/2007- FY 2010/1011. The adopted fiscal plan has been modified by the commission (CITE) and allows for contracting for services for children ages 0 through 5 over the five year period in the amount of $107 million.

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RIVERSIDE COUNTY CHILDREN AND FAMILIES COMMISSION FUND BALANCE

Balance
at 6/30/06 $ 1,281,040 $

Balance
at 6/30/07 7,550 1,964,651 975,064

Balance
at 6/30/08 $ 8,281 1,015,764 261,521 464,313 776,948 676,596

RESERVED For Obligations

Pre Paid Expense Health contract obligations (Reso 0826) Child Care contract obligations (Reso 08-26) Capacity Building Initiative (FY 06/07 & 07/08) Preschool For All Initiative (FY 06/07 & 07/08) ( Reso 08-34) Reserve for Encumbrance Evaluation (Reso 06-04)

California State Initiatives

Special Needs Match (Reso 06-04) Special Needs -State (Reso 06-04) School Readiness Match (Reso 06-04) Local School Readiness (FY 06/07 & 07/08 ) School Readiness - State Education Local School Readiness 10% set aside (Reso 08-26) CARES Match (Reso 06-04) Healthy Kids (Reso 06-04) 1,266,831 43,325 426,983 1,128,563 3,000,000 9,978,294 1,032,115 13,643 4,983 979,409 2,405,027 8,453,602 782,115 4,983 329,717 (9,619) 508,983 1,805,027 6,230,009

UNRESERVED Designated & Committed for:

Facilities (Reso-06-04) Health Contracts & One time RFP 10% set aside (Reso 08-26) Education Local School Readiness & One time RFP 10% set aside (Reso 0826) Childcare One time Funding 10% set aside (Reso 08-26) Mental Health Initiative (FY 06/07 & 07/08 ) Playground Initiative Home Visitation Designated to fund Contracts per 5 year Strategic Plan (Reso 06-04) Reserve to Fund Future State Initiatives/Projects (Reso 06-04 & Reso 08-06) Sustainability Fund (Reso 06-05) 700,000 49,858 49,858 548,610

1,486,084 263,064 10,742,079

16,000 10,742,079

977,044 1,224,506 2,470,833 16,000 10,742,079

21,833,272

2,256,349 26,734,998

26,734,998

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UNRESERVED
Imprest Cash (Revolving Fund Union Bank)

350,000 $ 52,499,535

350,000 $ 55,985,328

5,526,025 306,021 $ 61,450,612

Total Fund Balance.

The budget for fiscal year 08/09 was developed with the 5 year fiscal plan as a guide with total revenues budgeted at $ 29,194,456 and total expenditures at $34,373,626 allowing for use of $5,179,170 of fund balance. Contacting the Commissions Financial Management This financial report is designed to provide the public with an overview of the Commissions financial operations and condition. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to: First 5 Riverside, 2002 Iowa Avenue, Suite 100, Riverside, California 92507.

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BASIC FINANCIAL STATEMENTS

First 5 Riverside Riverside County Children & Families Commission Statement of Net Assets June 30, 2008

Governmental Activities ASSETS Cash and Investments in County Treasury Imprest Cash Accounts Receivable Interest Receivable Due from Other Governments Prepaids Capital Assets, Net of Accumulated Depreciation Total Assets LIABILITIES Accounts Payable Accrued Wages and Benefits Due to Other Governments Deferred Revenue Compensated Absences: Payable Within One Year Payable After One Year Total Liabilities NET ASSETS Invested in Capital Assets, Net of Related Debt Restricted for: Proposition 10 Programs Healthy Kids Program Retention Incentives for Early Care and Education Providers Program Total Net Assets $

59,628,462 306,021 78,088 543,072 4,721,954 8,281 77,894 65,363,772

3,110,426 162,312 162,490 400,038 127,432 88,555 4,051,253

77,894 61,234,481 36 108 61,312,519

The accompanying notes are an integral part of this statement.

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First 5 Riverside Riverside County Childrens & Families Commission Statement of Activities Year Ended June 30, 2008
Program Revenues Operating Capital Grants and Grants and Contributions Contributions $ 28,544,042 $ 28,544,042 $ $ 0 Net (Expense) Revenue and Change in Net Assets $ 3,183,347 3,183,347

Functions/Programs Governmental Activities: Child Development Total Governmental Activities

Expenses $ 25,360,695 $ 25,360,695

General Revenues: Investment Income Miscellaneous Total General Revenues Change in Net Assets Total Net Assets - Beginning, Unadjusted Prior Period Adjustments Total Net Assets - Ending

2,544,547 267,479 2,812,026 5,995,373 55,879,674 (562,528) $ 61,312,519

The accompanying notes are an integral part of this statement. 12

First 5 Riverside Riverside County Children & Families Commission Balance Sheet - Governmental Funds June 30, 2008
General

Fund ASSETS Cash and Investments in County Treasury Imprest Cash Accounts Receivable Interest Receivable Due from Other Governments Prepaids Total Assets LIABILITIES AND FUND BALANCE Liabilities: Accounts Payable Related Party Payables Accrued Wages and Benefits Due to Other Governments Deferred Revenue Total Liabilities Fund Balance: Reserved for: Prepaids Obligations First 5 California Initiatives Unreserved: Designated Undesignated Total Fund Balance Total Liabilities and Fund Balance $ 59,628,462 306,021 78,088 543,072 4,721,954 8,281 $ 65,285,878

650,019 2,460,407 162,312 162,490 400,038 3,835,266

8,281 3,195,142 9,651,215 42,763,928 5,832,046 61,450,612 $ 65,285,878

The accompanying notes are an integral part of this statement.

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First 5 Riverside Riverside County Children & Families Commission Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets June 30, 2008

Fund Balance of Governmental Funds Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital assets used for governmental activities are not reported as assets in the governmental funds. Compensated absences liability is not reported in the fund financial statements Net Assets of Governmental Activities

61,450,612

77,894 (215,987) $ 61,312,519

The accompanying notes are an integral part of this statement.

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First 5 Riverside Riverside County Children & Families Commission Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Year Ended June 30, 2008
General

Fund REVENUES Prop 10 Tobacco Tax Prop 10 School Readiness Prop 10 Child Care Retention Prop 10 Special Needs Prop 10 Healthy Kids Miscellaneous Investment Income Total Revenues EXPENDITURES Current: Salaries and Benefits Professional and Specialized Services Services and Supplies Capital Outlay Total Expenditures Net Change in Fund Balances Fund Balance - Beginning of Year, Unadjusted Prior Period Adjustments Fund Balance - End of Year $ $ 25,404,439 1,971,177 566,388 234,715 367,323 267,479 2,544,547 31,356,068

2,349,643 22,165,268 794,079 19,266 25,328,256 6,027,812 55,985,328 (562,528) 61,450,612

The accompanying notes are an integral part of this statement.

15

First 5 Riverside Riverside County Children & Families Commission Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended June 30, 2008

Net Change in Fund Balance - Total Governmental Funds Amounts reported for Governmental Activities in the Statement of Net Assets are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This activity is reconciled as follows: Cost of Assets Capitalized Depreciation Expense Compensated absences expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. This amount represents the net change in the compensated absences liability. Change in Net Assets of Governmental Activities

6,027,812

19,265 (39,037)

(12,667) $ 5,995,373

The accompanying notes are an integral part of this statement.

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First 5 Riverside Riverside County Children & Families Commission Southern California Alliance for Learning and Results (SCALAR) - Agency Fund June 30, 2008

ASSETS Cash and Investments in County Treasury Total Assets LIABILITIES Due to SCALAR Project Total Liabilities

$ $

150,000 150,000

$ $

150,000 150,000

The accompanying notes are an integral part of this statement.

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NOTES TO FINANCIAL STATEMENTS

First 5 Riverside Riverside County Children & Families Commission Notes to Financial Statements Year Ended June 30, 2008
NOTE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 DESCRIPTION Summary of Significant Accounting Policies Cash and Investments Due From Other Governments Capital Assets Grantee Payables Compensated Absences Revenue Special Funding Fund Balance Designations Lease Obligation Related Party Transactions Program Evaluation Defined Benefit Pension Plan Other Post Employment Benefits (OPEB) Risk Management Prior Period Adjustment PAGE 19 - 20 21 - 23 24 24 24 25 25 25 - 26 26 27 27 27 28 28 29 29

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First 5 Riverside Riverside County Children & Families Commission Notes to Financial Statements Year Ended June 30, 2008
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A) Reporting Entity The Riverside County Board of Supervisors established First 5 Riverside, also known as Riverside County Children and Families Commission (the Commission) in 1999 under the provisions of the California Children and Families Act of 1998 (Act). The Commission provides support for all children, prenatal through five years, and their families to improve early childhood development. The Commission is funded through cigarette tax revenue generated as a result of the California approval of the Proposition 10 Act (Prop 10) in November 1998. A governing board of nine members, which are appointed by the County Board of Supervisors, administers the Commission. The membership consists of one member of the County Board of Supervisors, the County Public Health Officer, one member from local government, the Director of the County Mental Health Department, the Director of the County Department of Public Social Services, one member of local education, two members from community based organizations that have a mission or program with the emphasis on children and families related to early childhood development and the Executive Director of the Riverside County Child Care Consortium Board of Directors. The Commission is discretely presented as a component unit of the County of Riverside, California. The Commission is among those leading the State in implementing comprehensive and integrated systems for children to thrive in supportive, nurturing and loving environments; enter school healthy and ready to learn and become productive and well adjusted as members of society. The Commission developed a strategic plan to guide activities and funding for the period of July 2006 through June 2011. The Commissions primary goals are: 1) to foster a healthy community and provide access to affordable, comprehensive and preventive mental and physical health services, 2) to expand the availability of quality, accessible and affordable Child Care services and 3) to educate Riverside County residents about the life long implication of optimal development through age 5. B) Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements (i.e., the Statement of Net Assets and the Statement of Activities on pages 11 and 12) are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Contributions to local grantee organizations are recognized as expenditures when criteria for grant payments are met by the grantee organization. The Statement of Net Assets presents the Commissions financial position in a net asset approach. The Statement of Activities reports the change in net assets in a net program cost format to demonstrate the degree to which the expenses of the Commission are offset by its program revenues. Governmental fund financial statements, presented after the government-wide financial statements, are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. Revenues are generally considered to be available when they are collected within 90 days of the end of the current fiscal period. Revenues from reimbursement type programs are considered available when they are collected within one year of the end of the current fiscal period in order to properly match revenues with related expenditures. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable.

19

First 5 Riverside Riverside County Children & Families Commission Notes to Financial Statements Year Ended June 30, 2008
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued B) Measurement Focus, Basis of Accounting, and Financial Statement Presentation - Continued The government reports the following major government fund: The general fund is the governments primary operating fund. It accounts for all financial resources of the general government. Additionally, the government reports the following fund type: The agency fund is used to account for funds held on behalf of the Southern California Alliance for Learning and Results (SCALAR). C) Accounting and Reporting Policies The accounting policies of the Commission conform to accounting principles generally accepted in the United States of America as applicable to governments. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for governmental accounting and financial reporting principles. D) Budget, Budgetary Process and Encumbrances The Commission adopts an annual budget, which can be amended by the Commission throughout the year. The basis used to prepare the budget is the same as the basis used to reflect actual revenues and expenditures. E) Cash and Investments Investments are valued at fair value. Fair value is defined as the amount that the Commission could reasonably expect to receive for an investment as a current sale between a willing buyer and seller and is generally measured by quoted market prices. F) Capital Assets Capital assets owned by the Commission are capitalized at historical cost. Depreciation is charged to operations using a straight-line method, based on the average useful life of the asset. The estimated useful life of their property and equipment is five years. G) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates. H) Restricted Resources When both restricted and unrestricted resources are available for use, it is the Commissions policy to use restricted resources first, and then unrestricted resources as they are needed.

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First 5 Riverside Riverside County Children & Families Commission Notes to Financial Statements Year Ended June 30, 2008

2)

CASH AND INVESTMENTS Cash and Investments are classified in the accompanying financial statements as follows:

Cash and Investments in County Treasury Imprest Cash Total Cash and Investments At June 30, 2008, Cash and Investments consisted of the following: Riverside County Investment Pool Equity in Pooled Cash and Investments Imprest Cash Total Cash and Investments Investments Authorized by the California Government Code

59,628,462 306,021 59,934,483

59,628,462 306,021 59,934,483

The Commission is authorized under California Government Code to make direct investments, however, the Commission has not adopted an investment policy and thus does not maintain policies for exposure to interest rate risk, credit risk, and concentration of credit risk. However, under the California Government Code they are authorized to make investments in the following: Maximum Percentage Of Portfolio None None None None 40% 40% 30% None 20% of base value 30% 20% 20% None 20% None None None Maximum Investment In One Issuer None None None None 30% 10% None None None None 10% 10% None None None None None

Authorized Investment Type Local Agency Bonds U.S. Treasury Obligations State of California Obligations U.S. Agency Securities Bankers Acceptances Commercial Paper Negotiable Certificates of Deposit Repurchase Agreements Reverse Repurchase Agreements and Security Leading Agreements Medium - Term Notes Mutual Funds Money Market Mutual Funds Collateralized Bank Deposits Mortgage Pass-through Securities County Pooled Investment Funds Local Agency Investment Fund (LAIF) JPA Pools (Other Investment Pools)

Maximum Maturity 5 years 5 years 5 years 5 years 180 days 270 days 5 years 1 year 92 days 5 years N/A N/A 5 years 5 years N/A N/A N/A

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First 5 Riverside Riverside County Children & Families Commission Notes to Financial Statements Year Ended June 30, 2008

2)

CASH AND INVESTMENTS - Continued Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The Commission manages its exposure to declines in fair values by investing in the Riverside County Investment Pool (Pool). The Pool limits its weighted average maturity (WAM) by policy to 1.5 years. At June 30, 2008 the Pools WAM was 1.22 years. Information about the sensitivity of the fair values of the Commissions investments to market interest rate fluctuations is provided by the following table that shows the distribution of the Commissions investments by maturity: Weighted Average Maturity

Investment Type Riverside County Investment Pool Equity in Pooled Cash and Investments Total

Fair Value

$ $

59,628,462 59,628,462

1.22 years

Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code and the actual rating as of the year end for each investment type.

Investment Type Riverside County Investment Pool Equity in Pooled Cash and Investments Total

Minimum Legal Rating

Rated Aaa

$ $

59,628,462 59,628,462

N/A

$ $

59,628,462 59,628,462

Concentration of Credit Risk The California Government Code places limitations on the amount that can be invested in any one issuer. There were no investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total investments as of June 30, 2008.

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First 5 Riverside Riverside County Children & Families Commission Notes to Financial Statements Year Ended June 30, 2008

2) CASH AND INVESTMENTS - Continued Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code does not contain legal requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local government units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. As of June 30, 2008, the amount of the Commissions deposits with financial institutions in excess of federal depository insurance limit, held in a collateralized account where the collateral is not held specifically in the name of the Commission, as described above, was $206,021. As of June 30, 2008, the Commission did not have any investments held by a broker-dealer (counterparty). Investment in Riverside County Investment Pool The Riverside County Treasurer maintains a cash and investment pool for all funds of the County and other agencies for which the County treasury is the depository. Interest earned on the pooled funds is allocated and credited to these funds quarterly. Interest is apportioned to the Commission based on the average daily balances on deposit with the Riverside County Treasurer. The Commission is voluntary participant in the pool regulated by the California Government Code, under the oversight of the Treasurer of the County of Riverside. The fair value of the Commissions investment in this pool is reported in the accompanying financial statements at amounts based upon the Commissions pro-rata share of the fair value provided by the County of Riverside for the entire pool portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by the pool, which are recorded on an amortized cost basis. Imprest Cash The Commission maintains a revolving checking account used for the Commissions business. The authorized expenditures include all necessary operating expenses other than salary/benefit expenses and funded agency contract reimbursements.

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First 5 Riverside Riverside County Children & Families Commission Notes to Financial Statements Year Ended June 30, 2008

3) DUE FROM OTHER GOVERNMENTS Due from other governments represents amounts due to the Commission from the California Children and Families Commission (State Commission) for Prop 10 related revenues. The amounts due at June 30, 2008, were as follows: Prop 10 Revenue For: May 2008 June 2008 Child Care Retention Initiative Healthy Kids Initiative Total Due from Other Governments $

2,043,459 2,156,813 344,922 176,760 4,721,954

4) CAPITAL ASSETS Capital assets activity for the year ended July 30, 2008, is shown below: Beginning Balance Machinery and Equipment Accumulated Depreciation $ 320,664 $ (222,998) 97,666 $ Ending Balance 338,660 (260,766) 77,894

Increases 19,265 $ (38,720) (19,455) $

Decreases (1,269) $ 952 (317) $

Governmental Activities Capital Assets, Net $

In accordance with GASB 34, the immaterial loss on the disposal of a capital asset is shown as an adjustment to the current periods depreciation expense in the accompanying statement of activities. Depreciation expense for the year ended June 30, 2008 totaled $38,403.

5) GRANTEE PAYABLES The Commissions primary expenditures consist of funding to various governmental and non-profit agencies that provide services directly to children ages 0-5 and their families. The Commission generally advances a portion of the funding each quarter. The grantees are required to file quarterly cost reports detailing how much of the funding was used. At year-end a payable generally exists depending on the actual level of expenditures by the grantee. If the funds advanced exceed the actual expenditures a receivable is recorded, and if the funds advanced fall short of the actual expenditures a payable is recorded, up to the amount of funding allocated. At June 30, 2008, $3,029,840 was owed to grantees and is included in accounts payable.

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First 5 Riverside Riverside County Children & Families Commission Notes to Financial Statements Year Ended June 30, 2008

6) COMPENSATED ABSENCES Compensated absences represent liability for unpaid vacation leave, holidays and other compensated absences with similar characteristics. Changes in the liability for the 2007-08 fiscal year are summarized as follows: Beginning Balance Compensated Absences $ 203,320 $ Ending Balance - $ 215,987 $ Amount Due in 2008-09 127,432

Increases 12,667 $

Decreases

7) REVENUE The Commission receives a proportionate share of Proposition 10 money from the State Commission based on the number of live births in the County in comparison to the number of live births statewide. This fund is identified in the Riverside Countys accounting records as the Prop 10 Children and Families Commission (Fund Number 51475). The Commission also receives Special Funding as explained under Note 8. Proposition 10 revenue for fiscal year ending June 30, 2008 is comprised of: Proposition 10 Revenues School Readiness Initiative Child Care Retention Initiative First 5 California Special Needs Initiative Healthy Kids Initiative Total $ 25,404,439 1,971,177 566,388 234,715 367,323 28,544,042

8) SPECIAL FUNDING The Commission received special funding in the amount of $1,971,177 for School Readiness Initiative, $566,388 for Child Care Retention Initiative, $234,715 for First 5 California Special Needs Initiative, and $367,323 for Healthy Kids Initiative for the fiscal year ending June 30, 2008. Below is a description of the programs: School Readiness Initiative: The Commission took a proactive leadership role in working with the State Commission to develop and implement a statewide School Readiness Initiative, providing over $400 million of combined State and local funding over a four-year period to implement school-linked programs that enhance the physical, cognitive, social and emotional readiness of children to succeed in school. The Commission administers this fund, which is used to account for the revenues received and expenditures made for school readiness programs. Child Care Retention Initiative: The Riverside CARES program supports and promotes the retention and improvement in the quality of center and family home child-care providers for children from 0 to 5 years. The Commission administers this fund, which is used to account for the revenues received and expenditures made for child-care retention programs.

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First 5 Riverside Riverside County Children & Families Commission Notes to Financial Statements Year Ended June 30, 2008

8) SPECIAL FUNDING - Continued First 5 California Special Needs Initiative: The Lake Elsinore Unified School District Special Needs Project builds upon and expands universal access to comprehensive screening, assessments, and services. The target is 0-5 children with, or at-risk of, a disability and their families. Services will promote inclusion in preschool and community programs, i.e., home visitation, to promote optimal early childhood development. Healthy Kids Initiative: The Healthy Kids program in partnership with Inland Empire Health Plan (IEHP), the County Board of Supervisors, California Kids, and First 5 Riverside collaborated efforts to ensure that the children of Riverside County families with incomes at or below 350% of the Federal Poverty Level will be covered by medical/dental insurance. The special funding money can only be used only for purposes specified under the funding agreements. The balance sheet and revenues and expenditures financial statements for the special funding programs are presented as other supplementary information in this report.

9) FUND BALANCE DESIGNATIONS Designated fund balances represent the portions of the fund balance that have been committed for programs, projects and activities to be conducted in the future according to a documented plan, budget or financial forecast formally approved by the Commission. As a result, these funds are unavailable for uses other than the purposes for which they were designated, except by formal action of the Commission Board. Designation Amount

Designations Local Initiative Programs: Facilities Playground Initiative Health Contracts Education Local School Readiness Childcare Contract Mental Health Initiative Total Local Initiative Programs Sustainability Fund Supplement Prop 10 Revenues for Contract Awards per 5 year Strategic Plan Total $

49,858 16,000 548,610 977,044 1,224,506 2,470,833 5,286,851 26,734,998 10,742,079 42,763,928

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First 5 Riverside Riverside County Children & Families Commission Notes to Financial Statements Year Ended June 30, 2008

10) LEASE OBLIGATION The Commission leases office facilities under an operating lease. The lease is cancelable, but subject to certain conditions and penalties. The original lease term of five years was extended during 2008 for an additional three years subject to the same terms contained in the original lease. Monthly rental payments were $20,728 as of April 2008. Pursuant to the terms of the lease agreement, 2% annual rent increase shall occur each April 1st. Total costs for the lease were $246,083 for the year-ended June 30, 2008. Year Ending June 30, 2009 2010 2011 $ Amount 249,981 254,985 194,094 699,060

11) RELATED PARTY TRANSACTIONS The required composition of the Board of Commissioners includes members from the County and other local governments, including local schools, community based organizations which serve children, the Riverside County Child Care Consortium, and including local schools of Riverside County Superintendent of Schools. Many of the program funded by First 5 Riverside are operated by organizations represented by the Commissioners. Commissioners must abstain from voting on issues directly related to their respective organizations. The following is a summary of expenditures and the related payables at June 30, 2008 for each related party: Expenditure Amounts $ 2,113,173 210,929 2,590,880 1,526,472 1,364,980 476,835 1,320,770 4,896,869 14,500,908

Organization Riverside County Child Care Consortium YMCA of Riverside City and County Riverside County Community Health Agency Riverside County Department of Public Health Riverside County Department of Mental Health Carolyn E. Wylie Center for Children, Youth, and Families Nuview Union School District Riverside County Superintendent of Schools Total

27

First 5 Riverside Riverside County Children & Families Commission Notes to Financial Statements Year Ended June 30, 2008
11) RELATED PARTY TRANSACTIONS - Continued Organization Riverside County Child Care Consortium Carolyn E. Wylie Center for Children, Youth and Families Nuview Union School District Riverside County Superintendent of Schools YMCA of Riverside City and County Payable Amount $ 597,134 33,109 391,464 1,438,397 303 2,460,407

$ 12) PROGRAM EVALUATION

In accordance with the Standards and Procedures for Audits of California Counties Participating in the California Children and Families Program, issued by the California State Controller, the Commission is required to disclose the amounts expended during the fiscal year on program evaluation. Program evaluation costs pertain to those activities undertaken to support the collection, production, analysis and presentation of evaluation information for Commission management, Commissioners and other interested parties. For the year ended June 30, 2008, the Commission expended $525,838 for program evaluation.

13) DEFINED BENEFIT PENSION PLAN The employees working at the Commission are considered employees of the County. The County employees participate in the County of Riversides defined benefit pension plan administered by the State of California Public Employees Retirement System (PERS), an agent multiple-employer public employee retirement system that acts as a common investment and administrative agent for California cities and governmental jurisdictions, which participate in this retirement plan. The Commission reimburses the County for pension plan costs. Rates for the Countys contributions are set by the State based upon annual experience of County members and on periodic actuarial valuations. The contributions rate for the Commission is established by the County of Riverside. With the exception of management employees, the Commission contributes the full amount of the employees 8 percent share of contributions after five years of CalPERS qualifying experience. The Commission contributes the full amount of the management employees 8 percent share of contributions from their date of hire. For the fiscal year ended June 30, 2008, the Commission was required to contribute $322,218 and 19.8% of payroll to the County of Riverside for the plan. Information is not available separately for the Commission as to the funding policy, annual pension cost, and required supplementary information related to funding progress and trend information. Refer to the Countys basic financial statements for further information. The Commissions actual and County required reimbursements for the current year and two preceding years were as follows: Annual Required Percentage of Contributions (ARC) ARC Contributed Fiscal Year Ending 6/30/2008 6/30/2007 6/30/2006 $ $ $ 28 332,218 332,781 290,153 100% 100% 100%

First 5 Riverside Riverside County Children & Families Commission Notes to Financial Statements Year Ended June 30, 2008

14) OTHER POST EMPLOYMENT BENEFITS (OPEB) GASB Statement No. 45 In June 2004, the GASB issued Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. This Statement establishes standards for the measurement, recognition, and display of OPEB expense/expenditures and related liabilities (assets), note disclosure, and, if applicable, required supplementary information (RSI) in the financial reports of state and local governmental employers. This statement is effective as of June 30, 2008. Because the Commissions employees are actually employees of the County, the Countys financial statements include the required information and disclosures relating to the other post employment benefits. The County allocates certain OPEB costs to the Commission, and requests reimbursements accordingly.

15) RISK MANAGEMENT The Commission purchases commercial insurance through Alliant Insurance Services, Inc. (Alliant) for general liability claims. Under this policy Alliant provides general liability coverage of up to $5,000,000 per claim and in aggregate. The employees at the Commission are considered to be employees of the County of Riverside and are covered by the Countys Workers Compensation policy. During the year ending June 30, 2008, the Commission had no settlements exceeding insurance coverage for these categories of risk. For the past three years, settlement or judgment amounts have not exceeded insurance coverage.

16) PRIOR PERIOD ADJUSTMENT The following prior period adjustments are reported in the accompanying financial statements: To reclassify to deferred revenue, revenue recognized in a prior period but unearned To record a liability related to an overpayment of funds recognized as revenue in a prior period, that must be returned to the State of California $ $ 400,038

162,490 562,528

29

REQUIRED SUPPLEMENTARY INFORMATION

First 5 Riverside Riverside County Children & Families Commission Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - General Fund Year Ended June 30, 2008

Budgeted Amounts Original Final REVENUES Prop 10 Tobacco Tax Prop 10 School Readiness Prop 10 Child Care Rentention Prop 10 Special Needs Prop 10 Healthy Kids Miscellaneous Investment Income Total Revenues EXPENDITURES Current: Salaries and Benefits Professional and Specialized Services Services and Supplies Capital Outlay Total Expenditures

Actual Amounts

Variance with Final Budget Positive (Negative)

$ 23,000,000 1,765,499 566,250 250,000 500,000 190,250 1,500,000 27,771,999

$ 23,000,000 1,765,499 566,250 250,000 500,000 190,250 1,500,000 27,771,999

$ 25,404,439 1,971,177 566,388 234,715 367,323 267,479 2,544,547 31,356,068

$ 2,404,439 205,678 138 (15,285) (132,677) 77,229 1,044,547 3,584,069

2,642,445 27,912,104 1,016,715 22,500 31,593,764

2,642,445 27,912,104 1,016,715 22,500 31,593,764

2,349,643 22,165,268 794,079 19,266 25,328,256

292,802 5,746,836 222,636 3,234 6,265,508

Net Changes in Fund Balance Fund Balance, Beginning, Unadjusted Prior Period Adjustments Fund Balance, Ending

$ (3,821,765)

$ (3,821,765)

6,027,812 55,985,328 (562,528) $ 61,450,612

$ 9,849,577

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OTHER SUPPLEMENTARY INFORMATION

First 5 Riverside Riverside County Children & Families Commission School Readiness Program - Balance Sheet June 30, 2008

ASSETS Cash and Investments in County Treasury Accounts Receivable Total Assets LIABILITIES AND FUND BALANCES Liabilities Accounts Payable Salaries and Benefits Payable Due to Other Governments Deferred Revenue Total Liabilities Fund Balance Reserved for: School Readiness Initiatives Total Liabilities and Fund Balances

$ 1,076,175 9,619 $ 1,085,794

529,134 3,751 162,490 400,038 1,095,413

(9,619) $ 1,085,794

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First 5 Riverside Riverside County Children & Families Commission Schedule of Revenues, Expenditures and Changes in Fund Balances School Readiness Program Year Ended June 30, 2008

REVENUES Prop 10 School Readiness Total Revenues EXPENDITURES Current: Salaries and Benefits Professional and Specialized Services Services and Supplies Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers in from Prop 10 Commission Fund Total Other Financing Sources (Uses) Net Changes in Fund Balance Fund Balance, Beginning, Unadjusted Prior Period Adjustments Fund Balance, Ending

$ 1,971,177 1,971,177

52,065 2,435,467 793 2,488,325

(517,148)

90,649 90,649 (426,499) 979,408 (562,528) $ (9,619)

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First 5 Riverside Riverside County Children & Families Commission Retention Incentives for Early Care and Education Providers Program - Balance Sheet June 30, 2008

ASSETS Due from Other Governments Total Assets LIABILITIES AND FUND BALANCES Liabilities Deficit Cash Accounts Payable Total Liabilities Fund Balance Reserved for: Retention Incentives for Early Care and Education Providers Program Total Liabilites and Fund Balance

$ $

344,922 344,922

151,137 193,677 344,814

108 $ 344,922

33

First 5 Riverside Riverside County Children & Families Commission Schedule of Revenues, Expenditures and Changes in Fund Balances Retention Incentives for Early Care and Education Providers Program Year Ended June 30, 2008

REVENUES Prop 10 Child Care Retention Total Revenues EXPENDITURES Current: Professional and Specialized Services Total Expenditures Net Changes in Fund Balance Fund Balance, Beginning Fund Balance, Ending

566,388 566,388

566,280 566,280 108 $ 108

34

First 5 Riverside Riverside County Children & Families Commission Special Needs Program - Balance Sheet June 30, 2008

ASSETS Cash and Investments in County Treasury Total Assets LIABILITIES AND FUND BALANCE Liabilities Deficit Imprest Cash Accounts Payable Total Liabilities

$ $

18,040 18,040

139 17,901 18,040

35

First 5 Riverside Riverside County Children & Families Commission Schedule of Revenues, Expenditures and Changes in Fund Balances Special Needs Program Year Ended June 30, 2008

REVENUES Prop 10 Special Needs Total Revenues EXPENDITURES Professional and Specialized Services Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers in from Prop 10 Commission Fund Total Other Financing Sources (Uses) Net Changes in Fund Balance Fund Balance, Beginning Fund Balance, Ending

234,715 234,715

250,000 250,000

(15,285)

1,642 1,642 (13,643) 13,643 $ -

36

First 5 Riverside Riverside County Children & Families Commission Healthy Kids Program - Balance Sheet June 30, 2008

ASSETS Due from Other Governments Total Assets LIABILITIES AND FUND BALANCE Liabilities Deficit Cash Total Liabilities Fund Balance Reserved for: Healthy Kids Program Total Liabilities and Fund Balance

$ $

176,760 176,760

176,724 176,724

36 $ 176,760

37

First 5 Riverside Riverside County Children & Families Commission Schedule of Revenues, Expenditures and Changes in Fund Balances Healthy Kids Program Year Ended June 30, 2008

REVENUES Prop 10 Health Kids Total Revenues EXPENDITURES Current: Professional and Specialized Services Total Expenditures Net Changes in Fund Balance Fund Balance, Beginning Fund Balance, Ending

367,323 367,323

367,287 367,287 36 $ 36

38

First 5 Riverside Riverside County Children & Families Commission Affordable Building for Children Development - Packard Foundation June 30, 2008

ASSETS Total Assets LIABILITIES AND FUND BALANCE Total Liabilities $ $ -

39

First 5 Riverside Riverside County Children & Families Commission Schedule of Revenues, Expenditures and Changes in Fund Balances Affordable Building for Children Development - Packard Foundation Year Ended June 30, 2008

REVENUES Miscellaneous Revenue Total Revenues EXPENDITURES Current: Salaries and Benefits Total Expenditures Net Changes in Fund Balance Fund Balance, Beginning Fund Balance, Ending

65,000 65,000

65,000 65,000 $ -

40

First 5 Riverside Riverside County Children & Families Commission Low Income Investment Funding - Packard Foundation June 30, 2008

ASSETS Cash and Investment in County Treasury Total Assets LIABILITIES Deficit Imprest Cash Total Liabilities

$ $

10,000 10,000

$ $

10,000 10,000

41

First 5 Riverside Riverside County Children & Families Commission Schedule of Revenues, Expenditures and Changes in Fund Balances Low Income Investment Funding - Packard Foundation Year Ended June 30, 2008

REVENUES Total Revenues EXPENDITURES Current: Professional Services Total Expenditures Net Changes in Fund Balance Fund Balance, Beginning Fund Balance, Ending

10,000 10,000 (10,000) 10,000 $ -

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First 5 Riverside Riverside County Children & Families Commission Schedule of Local Match Expenditures for State Initiative Programs Year Ended June 30, 2008

State Initiative Programs School Readiness Retention Incentives for Early Care and Educaion Providers Special Needs Healthy Kids Total Local Match Expenditures

$ 1,387,836 2,221,991 250,000 2,223,593 $ 6,083,420

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COMPLIANCE SECTION