Budget too tight?  Here is an idea!

Here is an idea to leverage a little more room in next year's budget.  

Look at current-year spending to date.  Chances are, there are budget lines that are below budget at this point in the year.  For example, you may have had some job position vacancies.  Even a few vacancies for a few weeks can add up to 1% or 2% of your budget which you will not use in the current year.

If you find any such appropriations you will not use in the current year, you may be able to “de-appropriate” them.   Then, your fiscal officer can recompute the amount available next year, and these unused appropriations for the current year can be made available next year.

How can you “de-appropriate” funds?  A mayor can do it by executive order.  A city council can do it by ordinance.  Sometimes it is called a “reduction ordinance.”

A trustee can also reduce the current budget by executive order, but we recommend a board resolution as well.

For a county, agreement between the council and the commissioners or the appropriate elected official or department head, is usually considered necessary.   Ask your local DLGF field representative whether he will accept a de-appropriation.

Whatever means you use, make sure the reduction is taken into account by the fiscal officer in computing next year’s budget.  Also, make sure the reduction is reported to the Department of Local Government Finance.  We recommend attaching the reduction ordinance, resolution or executive order to the budget ordinance when it is filed with the county auditor.

If you have questions or would like further information, please contact us at: Coonrod@CoonrodCPA.com

11/24/09

This article is intended to provide information of general interest to local government officials in Indiana . The information is not guaranteed to be applicable or appropriate in particular circumstances. Local officials should consult competent professionals before acting on any information contained in this article. We are not attorneys. Advice of a legal nature should be sought only from qualified attorneys.