The Budget as a Financial Plan

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The Budget as a Financial Plan
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Include and describe all funds that are subject
to appropriation

• Provide a narrative or graphic overview of the
  budgetary fund structure
• Indicate which funds are appropriated
• Provide a description of each individual major
  fund included within the document?
• Indicate if additional or fewer funds are
  included in the audited financial statements

A major fund reflects more than 10 of total
appropriated revenues or expenditures.
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II. Proprietary Funds Proprietary Funds
account for those external and internal
business-type activities that are provided on a
basis consistent with private enterprise. They
are accounted for on a cost of service or
capital maintenance basis. Proprietary Funds
include the following two (2) fund types 1.
Enterprise Funds account for activities, such as
water and water reclamation services that are
similar to those provided by private enterprise,
and whose costs are paid from user charges or
from revenue sources other than general
governmental revenue. Orange Countys Enterprise
Funds consist of the Convention Center, Solid
Waste System, and the Water Utilities System.
Orange County
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Indian River County
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Present a summary of major revenues and
expenditures, as well as other financing sources
and uses, to provide an overview of the total
resources budgeted by the organization.(Mandator
y Criterion)

• Include an overview of revenues other sources
  and expenditures and other uses of all
  appropriated funds?
• Present revenues and other sources and
  expenditures and other uses (1) together in a
  single schedule, (2) in separate but
  adjacent/sequential schedules, or (3) in a matrix

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Present a summary of major revenues and
expenditures, as well as other financing sources
and uses

• Present revenues by major type in this schedule
  (e.g., property taxes, intergovernmental revenue,
  sales taxes, fees and charges)
• Present expenditures by function, organizational
  unit, or object in this schedule

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City of Miramar
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Include summaries of revenues and other
financing sources, and of expenditures and
other financing uses for the prior year actual,
the current year budget and/or estimated current
year actual, and the proposed budget
year.(Mandatory Criterion)

• Present 3 years on the same schedule for revenues
  and other sources and expenditures and other
  uses, or on adjacent/sequential pages
• Present this information for appropriated funds
  in total

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Include summaries for the prior year actual,
the current year budget and/or estimated current
year actual, and the proposed budget year.

• Present this information at a minimum for each
  major fund and for other (i.e., nonmajor) funds
  in the aggregate
• For biennial budgets, provide the fourth year
  (the second budget year)

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Village of Palmetto Bay
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(No Transcript)
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City of Fort Walton Beach
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Describe major revenue sources, explain the
underlying assumptions for the revenue estimates,
and discuss significant revenue
trends.(Mandatory Criterion)

• Provide descriptions for revenue sources that
  represent at least 75 of total revenues
• Describe methods used to estimate revenues (e.g.,
  trend analysis or estimates from another
  government or consulting firm)?
• Describe trends and underlying assumptions if
  revenues are projected based on trend information

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(No Transcript)
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DOR forecasts
Consensus forecast
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Examples of insufficient disclosure of revenue
estimation methodology
Fiscal year 2007 is conservatively
budgeted Historic trends are anticipated to
continue Taxes are estimated to increase
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Include projected changes in fund balances, as
defined by the entity for appropriated
governmental funds included in the
budget)(Mandatory Criterion)

• Define fund balance
• Present fund balance information for the budget
  year or years
• Provide a schedule showing beginning fund
  balances, increases and decreases (separately),
  and ending fund balances for governmental funds
• At a minimum, present this information for each
  governmental fund and for non-major governmental
  funds in the aggregate

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Include projected changes in fund balances

• Discuss causes/consequences if fund balance of
  any major fund or the aggregate of nonmajor funds
  is anticipated to increase/decline by more than
  10
• If no governmental funds, the same is applied for
  the entity as a whole, the main operating fund,
  and each significant fund
• In a biennial budget, present the change in fund
  balance/fund equity separately for each year

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Fund Balance The excess of fund assets over
liabilities. These unspent funds can be included
as revenue in the following years budget. A
negative fund balance is sometimes referred to as
a deficit.
Polk County
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City of Boca Raton
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City of Holly Hill
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Include budgeted capital expenditures, whether
authorized in the operating budget or in a
separate capital budget.(new Mandatory
Criterion)

• Define capital expenditures
• Indicate the total dollar amount of capital
  expenditures for the budget year(s)
• Describe significant nonroutine capital
  expenditures along with dollar amounts
  (Information in a separate CIP does not satisfy
  this criterion.)
• Clearly state if the entity has no significant
  nonroutine capital expenditures

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Hillsborough County
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Pictures spice up the presentation
Hillsborough County
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City of Tampa
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Describe if and to what extent significant
nonroutine capital expenditures will affect the
entitys current and future operating budget and
the services that the entity provides.

• Describe and quantify anticipated operating costs
  associated with these capital expenditures (e.g.,
  additional personnel costs, maintenance costs,
  utility costs)
• Describe and quantify anticipated savings or
  revenues expected to result from capital
  expenditures (e.g., reduced utility costs, lower
  maintenance costs, lower personnel costs)

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Hillsborough County
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Include financial data on current debt
obligations, describe the relationship between
current debt levels and legal debt limits, and
explain the effects of existing debt levels on
current operations.(Mandatory Criterion)

• Describe the entitys debt policy and any debt
  limits
• Show the principal and interest payments for the
  fiscal year

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Orange County
Disclosure of no statutory debt limit on general
obligation bonds.
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Hillsborough County
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Hillsborough County
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Explain the basis of budgeting for all funds,
whether cash, modified accrual, or some other
statutory basis.

• Define the basis of budgeting
• Clearly state if the basis of budgeting matches
  the basis of accounting
• Describe differences if they are not the same
  (e.g., treatment of depreciation, encumbrances,
  capital outlays, compensated absences, change in
  fair market value of investments, fund structure,
  component units.

Check GFOA recommended practice on Relationship
Between Budgetary and Financial Statement
Information (1999)
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Explain the basis of budgeting

• This is one of the most misunderstood criteria
• Some entities confuse basis of budgeting with
  basis of accounting. The criterion was reworded
  from budgetary basis of accounting to try to
  address the confusion.
• Many entities dont seem to recognize that there
  are differences. An observation cities and
  counties rarely budget consistent with GAAP.

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This table is part of a two-page disclosure in
Hillsborough Countys budget document on
differences between the basis of budgeting and
the basis of accounting.