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IX. DEFERRED REVENUE <br />At fiscal year end, any portion of revenue invoiced (not necessarily received) during the fiscal <br />year being closed out that represents charges or prepayment for materials and/or services <br />for the upcoming fiscal year shall be reclassified from a revenue account to a deferred <br />revenue account (liability). In the new fiscal year the deferred revenue shall be reclassified <br />to a revenue account. (EXAMPLE: On June 1, 19X1, a city is invoiced $48,000 which <br />represents charges for the 12-month period June 1, 19X1 to May 31, 19X2. The amount to <br />be reclassified to deferred revenue would be $44,000, representing 11/12ths of the total <br />amount. In July 19X1, the $44,000 would be reclassified to revenue.) Reclassification <br />entries shall be made by Auditor-Controller Agency Accounting units, or for those <br />agencies/departments/districts without such a unit, the agency/department/district shall notify <br />the Auditor-Controller of the amounts to be reclassified. <br />X. COST RECOVERY <br />All County agencies/department/districts shall include all costs of providing contracted <br />services in contract rates. Including all direct costs, allocated indirect costs such as <br />departmental and County (CWCAP) overhead, and cost of capital financing. <br />XI. EXISTING CONTRACTS <br />Billing terms and provisions contained in existing contracting entity agreements (existing as <br />of the date this policy is approved by the Board of Supervisors) shall remain in effect for the <br />life of the contract. However, when these existing contracts are renegotiated, they shall <br />contain the billing provisions as set forth in this policy. <br />XII. DEVIATIONS FROM POLICY <br />Deviations from this policy shall be approved by the Board of Supervisors. Proposed <br />deviations by agencies/departments/districts shall be submitted to the CEO for concurrence <br />in advance of filing an Agenda Item Transmittal (AIT) with the Clerk of the Board. The CEO, <br />or his/her designee, shall advise the agency/department/district of approval or disapproval of <br />the proposed deviations. If a County agency/department/district submits a contract to the <br />Board of Supervisors for approval, and the billing provisions in the contract deviate from this <br />policy, the agency/department/district shall specifically advise the Board of Supervisors in <br />the AIT of the deviation, the reason for the deviation, and of the CEO's recommendation <br />relative thereto. <br />Page 4 of 4 <br />25F-18