BUDGETARY ACCOUNTING AND THE BUDGET PROCESS Budgetary Accounting Charles by icecube

VIEWS: 44 PAGES: 4

									                             BUDGETARY ACCOUNTING
                             AND THE BUDGET PROCESS



Budgetary Accounting
        Charles County utilizes a formal budgetary process as a management control device for the General,
Special Revenue, Capital Projects, and Enterprise Funds. Revenue and expenditure budgets are adopted
using a modified accrual basis. Budgets for Special Revenue Funds are normally established pursuant to the
terms of the related federal and/or state grant awards. The budgeted amounts are displayed as originally
adopted, or as amended by the County Commissioners.


The Budget Process
        The budget process spans approximately nine months with the September distribution of capital
project forms through the formal budget adoption in May. This process is repeated annually. The budget
process is initiated at the top level of government with the adoption of budget calendars that provide general
timeliness for requests and approvals. The calendars encompass both the operating and capital budget
process.


Development, Review, and Adoption
        The capital budget process is scheduled to be completed prior to the operating budget process so that
the operating impact of the projects can be reviewed and integrated with the operating requests. Capital
Improvement Program (CIP) request forms are distributed in September and returned in October by the user
agencies and departments. After a review by the CIP Committee and Planning Commission, the requests are
reviewed by senior management and then with the Board of County Commissioners beginning in January.
The CIP is approved by the Commissioners in March after a public hearing is held.
        The operating budget process begins with a senior management presentation to the commissioners
involving cost of living, consumer prices, preliminary revenue estimates and other significant variables that
may affect the upcoming fiscal year. General guidelines are provided to the Department of Fiscal Services -
Budget Division involving commissioner priorities, from both a fiscal and political policy. Departments and
agencies are then informed of the guidelines and revenue outlook for the coming year. With this information
a comprehensive program review and request is developed during the Fall and early Winter. The Budget
Division makes expenditure recommendations for most of the departments in the Fall. Department budget
requests are then added and reviewed with the departments, agencies, and the County Administrator to
include performance measures and priority setting. Shortly before a public hearing, and continuing
thereafter, commissioner review of all budgets is conducted and final adoption is completed in May or June.

The basis on which the budget is formulated varies depending upon the nature of the operation. The
schedule on the following page summarizes the differences:




                                                  Page 35
                         FUND                                            ASSET        DEBT        CAPITAL
        FUND             TYPE        REVENUES          EXPENSES        DEPR. EXP.    SERVICE      OUTLAY

       General           Govt.       Modified Accr.   Modified Accr.      No           P&I        Expenditure

    Water & Sewer      Proprietary   Modified Accr.   Modified Accr.      No           P&I        Expenditure

       Landfill        Proprietary   Modified Accr.   Modified Accr.      Yes          P&I        Expenditure

    Environmental      Proprietary   Modified Accr.   Modified Accr.      Yes          P&I        Expenditure
       Service

 Inspection & Review   Proprietary   Modified Accr.   Modified Accr.      Yes          P&I        Expenditure

     Golf Course       Proprietary   Modified Accr.   Modified Accr.      Yes          P&I        Expenditure

      Recreation       Proprietary   Modified Accr.   Modified Accr.      Yes          P&I        Expenditure

  Emergency Medical    Proprietary   Modified Accr.   Modified Accr.      Yes          P&I        Expenditure
      Services

   Vending Machine     Proprietary   Modified Accr.   Modified Accr.      Yes           N/A       Expenditure

    Capital Project      Govt.       Modified Accr.   Modified Accr.      No            N/A       Expenditure

   Special Revenue       Govt.       Modified Accr.   Modified Accr.      No            N/A       Expenditure

    Trust & Agency      Fiduciary      No Budget        No Budget         N/A           N/A          N/A

     Debt Service         Debt       Modified Accr.   Modified Accr.      N/A          P&I           N/A



       Due to the self supporting nature of enterprise funds, the accounting basis is not applied in all cases.
Capital outlays are treated as expenditures so that fees can be adjusted to meet cash demands. Principal
payments on long term bonds are also treated as an expenditure for the same reason. Asset depreciation is
budgeted for in the form of a sinking fund for future asset replacement in the Landfill and Recycling funds.
The surplus generated from this non-cash expense is held in reserve for future equipment replacement.

      Governmental fund types and the Debt Service fund are consistent with standard accounting reports.
No formal budget is adopted for the Fiduciary funds.


Operating & Capital Budget Interaction
       An intensive review of the capital budget requests and the five year plans are necessary for two main
reasons. The first reason is to determine the affordability of future debt issuance as it impacts the General
Fund’s ability to retire the debt and to pay the interest cost. Secondly, it is used to review the operating
impacts associated with the completion of the project. How much will the annual debt payments be and what
other costs will result? Additional staff? Higher utility costs? Will there be additional grounds maintenance
costs? Once questions like these can be answered with estimates, then the operating budgets can be finalized
with the adoption of rates, fees or charges.




The Operating and Capital Budgets for FY2008 were scheduled as follows:




                                                      Page 36
                          FISCAL YEAR 2008
                    OPERATING BUDGET CALENDAR
                          CHARLES COUNTY, MD
                                (Adopted July 31, 2006)
                              (Revised December 22, 2006)

Time Line            Action
October 2, 2006      Performance Measurements file sent to departments.

October 17, 2006     Commissioner review of preliminary Revenue estimates and
                     proposed budget factors and targets.

October 31, 2006     All Performance Measurements updates are due to the Department of Fiscal
                     Services.

November 6, 2006     Elected Officials/Agencies receive Operating Budget Request Forms.
                     County Departments are provided either budget forms or on-line access
                     to the budget software for their FY2008 operating requests.

December 8, 2006     County Department and Elected Officials requested budgets returned to
                     Fiscal Services for initial compilation.

January 2, 2007      Agencies requested budgets returned to Fiscal Services.

February 23, 2007    Board of Education and CSM Operating Budget Requests Due.

March 20, 2007       Budget Work Session - Other Enterprise Funds.

March 27, 2007       Budget Work Session - Golf Course Fund & Environmental Service Fund.

April 3, 2007        Budget Work Session - Landfill Fund.

April 17, 2007       Budget Work Session - Water and Sewer Enterprise Fund

April 18, 2007       Advertise for Constant Yield & Budget Public Notice.

April 24, 2007       Budget Work Session - General Fund.

May 1, 2007          Budget Work Session - General Fund.

May 2, 2007          Public Hearing. (confirmed with BOE)

May 8, 2007          Budget Work Session - General Fund.

May 9, 2007          Public Hearing - Constant Yield Tax Rate.

May 15, 2007         Budget Work Session - General Fund.

May 22, 2007         General Fund Tax Rates & Budget Adoption.
                     Budget Adoption of All Other Funds .

June - August        FY2008 Approved Budget Book prepared.

                                       Page 37
                             FISCAL YEAR 2008
                 CAPITAL IMPROVEMENT PROGRAM CALENDAR

                             CHARLES COUNTY, MD
                                 (Adopted July 31, 2006)
                               (Revised December 22, 2006)

Time Line              Action
September 18, 2006     Capital Improvement Program (CIP) forms sent to County
                       Departments and Agencies.

October 13, 2006       CIP requests are returned to Fiscal Services - Budget Division.
                       Operating Impact requests are sent to Public Facilities or Utilities for
                       review.

October 17, 2006       CIP Cashflow files are sent to sent to County Departments and Agencies to
                       determine County’s Bond Size.

October 23, 2006       CIP request forms are sent to the Planning and CIP Review
                       Committee.

October 23, 2006       Operating impact forms returned from Public Facilities and Utilities to Fiscal
                       Services -Budget Division.

November 13-17, 2006   County Administrator review work sessions and final draft completed.

November 13, 2006      Forward material to Planning Commission for review.

November 17, 2006       CIP Cashflow files are returned to Fiscal Services - Budget Division

December 4, 2006       Preliminary BOE project review w/ County Commissioners and BOE

November 27, 2006      Forward County Commissioner letter to IAC for Board of Education CIP.

December 13, 2006      Planning Commission comments returned to Fiscal Services - Budget
                        Division.

January 30, 2007       General Fund Five-Year Financial Plan & CIP review session with the
                       Commissioners.

February 7, 2007        Finalize the General Fund Five-year plan.

February 13, 2007       Water & Sewer Five-Year Financial Plan review with the Commissioners.

March 6, 2007          Finalize the Water & Sewer five-year plans. Landfill Five-Year Financial Plan &
                       CIP review session with the Commissioners.

March 7, 2007          Public Hearing Information for newspaper

March 13, 2007         Recap and final review of the FY 2008-2012 CIP.

March 21, 2007          Public Hearing on Requested CIP

March 28, 2007         Formal Adoption.

                                           Page 38

								
To top