The Honorable, The Legislature:

This report is transmitted as required by s. 20.002(11)(f), Wisconsin Statutes, (for distribution to the appropriate standing committees under s. 13.172(3), Wisconsin Statutes) and confirms that the Department of Administration has found it necessary to exercise the "temporary reallocation of balances" authority provided by this section in order to meet payment responsibilities and cover resulting negative cash balances during the month of May 2011.

On May 1, 2011, the Medical Assistance Trust Fund cash balance closed at a negative $197.9 million. This negative balance continued through May 31, 2011, when the fund's cash balance closed at a negative $301.2 million. The Medical Assistance Trust Fund cash balance reached its intra-month low of a negative $301.9 million on May 26, 2011.

On May 1, 2011, the Police and Fire Protection Fund cash balance closed at a negative $12.9 million (its intra-month low). This negative balance continued through May 31, 2011, when the fund's cash balance closed at a negative $8.9 million.

On May 1, 2011, the Democracy Trust Fund cash balance closed at a negative $901 thousand (its intra-month low). This negative balance continued through May 31, 2011, when the fund's cash balance closed at a negative $896 thousand.

On May 1, 2011, the Environmental Fund cash balance closed at a negative $10.9 million. This negative balance continued through May 31, 2011, when the fund's cash balance closed at a negative $11.6 million (its intra-month low).

The Medical Assistance Trust Fund, Police and Fire Protection Fund, Democracy Trust Fund and Environmental Fund shortfalls were due to the difference in the timing of revenues and expenditures, were not in excess of the statutory interfund borrowing limitations and did not exceed the balances of the funds available for interfund borrowing.

The distribution of interest earnings to investment pool participants is based on the average daily balance in the pool and each fund's share. Therefore, the monthly calculation by the State Controller's Office will automatically reflect the use of these temporary reallocations of balance authority, and as a result, the funds requiring the use of the authority will effectively bear the interest cost.

Referred to joint committee on Finance.

Senate Clearinghouse Rule 11-020

Submitted by Department of Commerce.

Senate Clearinghouse Rule 11-011