REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
June 27, 2023
FROM
JACQUELYN GREENE, Director, Preschool Services Department
MATTHEW ERICKSON, County Chief Financial Officer, County Administrative Office
SUBJECT
Title
General Fund Loan for California State Preschool Program Expenses
End
RECOMMENDATION(S)
Recommendation
Authorize a $1,812,349 loan from the County General Fund to the Preschool Services Department to provide temporary funding of expenses for the California State Preschool Program, pending reimbursement from the California Department of Education, for the period of July 1, 2023 through December 31, 2023.
(Presenter: Jacquelyn Greene, Director, 383-2005)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Provide for the Safety, Health and Social Service Needs of County Residents.
FINANCIAL IMPACT
This item impacts Discretionary General Funding (Net County Cost). The County General Fund’s unreserved fund balance will decrease by the amount of the loan; these funds will not be available in the County General Fund for appropriation until repaid. The Preschool Services Department (PSD) will repay the total of $1,812,349 loan, plus interest, to the County General Fund no later than December 31, 2023. The interest amount will be calculated based on the County Treasurer’s Investment Pool rate and validated by the Auditor-Controller/Treasurer/Tax Collector (ATC). The loan interest is an allowable expense for the California State Preschool Program (CSPP) funded by the California Department of Education (State).
BACKGROUND INFORMATION
CSPP revenue is received as reimbursements from the State after services have been rendered. Historically, the State has issued partial reimbursements on an inconsistent basis, which creates an insufficient cash flow to cover CSPP expenses. As a result, PSD has requested an annual loan from the County General Fund, since 2013, to ensure adequate funding for CSPP expenses. Establishing the loan aids in maintaining federal compliance and allows PSD to pay for CSPP expenses incurred until reimbursements are received from the State.
CSPP is a combination of State Preschool, Pre-Kindergarten, Family Literacy, and General Child Care center-based programs. The program includes both part-day and full-day options that provide a core class curriculum that is developmentally and culturally appropriate for the children served. The program also provides parent education, referrals to health and social services for families, and staff development opportunities to employees. CSPP services are provided to eligible children whose parents are working, attending school, or enrolled in a job-training program, and families referred by child protective services. PSD provides CSPP services to approximately 805 children and their families in the central valley, high and low desert.
On an annual basis, PSD completes an assessment of CSPP revenue and then obtains Board of Supervisors’ (Board) approval to utilize County General Funding to provide temporary funding needed, pending reimbursement from the State. The previous year’s loan, approved by the Board on June 14, 2022 (Item No. 40), was in the amount of $1,000,000, for the period of July 1, 2022 through December 31, 2022. PSD repaid this loan, plus interest in the amount of $6,919.57, on November 30, 2022.
The current loan request for temporary funding in 2023 was calculated to be $1,812,349 upon PSD’s completion of a cash flow analysis. This loan amount will fund operations for three months while waiting for State funding. It is anticipated PSD will receive the first payment from the State in September 2023. Upon approval by the Board, ATC will record the General Fund loan and execute a cash transfer of $1,812,349 to PSD. PSD will repay the total $1,812,349 loan, plus interest, to the County General Fund no later than December 2023.
Based on the State’s reimbursement schedule, PSD will continue to complete a cash flow analysis at the beginning of the fourth quarter of each fiscal year, and if necessary, request Board authorization for a loan from the County General Fund. The loan will provide temporary funding for CSPP expenses pending State reimbursement and to meet the federal grants regulations for a predetermined period of time. Per Title 2 of the Code of Federal Regulations Part 200, Subpart D, agencies must ensure federal funds have been used according to the Federal Statutes, regulations, and the terms and conditions of the Federal award.
PROCUREMENT
N/A
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Adam Ebright, Deputy County Counsel, 387-5455) on May 25, 2023; Auditor-Controller/Treasurer/Tax Collector (Vanessa Doyle, Chief Deputy Controller, 382-3195) on June 1, 2023; Finance (Amanda Trussell, Principal Administrative Analyst, 387-5423, and Yvette Calimlim, Administrative Analyst, 386-8392) on May 31, 2023; and County Finance and Administration (Robert Saldana, Deputy Executive Officer, 387-4376 and Cheryl Adams, Deputy Executive Officer, 388-0238) on June 11, 2023.