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SAN LEANDRO REDEVELOPMENT AGENCY Notes to the Financial Statements For the Year Ended June 30, 2011 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Expenditures are controlled at the fund level for all budgeted departments within the Agency. This is the level at which expenditures may not legally exceed appropriations. Budgeted amounts for the Combined Statement Revenues, Expenditures and Other Financing Sources (Uses) — Budget and Actual include budget amendments approved by the Agency Board. The budgets are adopted on a basis substantially consistent with generally accepted accounting principles (GAAP). Any amendments or transfers of appropriations between object group levels within the same department must be authorized by the City Manager. Any amendments to the total level of appropriations for a fund or transfers between funds must be approved by the Agency Board. Supplemental appropriations financed by unanticipated revenues during the year must be approved by the Agency Board. M. Beginning Balance Restatement During the current fiscal year the Agency determined that land that was purchased in fiscal year ending June 30, 2009, was not recorded in the financial statements. As required by Generally Accepted Accounting Principles, the Agency restated and increased beginning net assets in the amount of $6,500,000. In March 2011 the land was transferred to the City as noted in Note 5 below. NOTE 2 — CASH AND INVESTMENTS Cash and Investments at June 30, 2011, consisted of the following: Cash and investments pooled with the City $10,985,105 Restricted cash and investments 15,387,132 Total cash and investments $26,372,237 The Agency has pooled its cash and investment with the City in order to achieve a higher return on investment. Certain restricted funds, which are held and invested by independent outside custodians through contractual agreements, are not pooled. These restricted funds include cash with fiscal agents. The investments made by the City are limited to those allowable under State status and include the following types of investments: U.S. Government Securities Bankers' Acceptance Commercial Paper Medium -Term Notes Repurchases Agreements Deposits with Banks State of California Local Agency Investment Fund Passbook savings account demand deposits Mutual funds investing in securities of the U.S. government or its agencies 34