BUDGET CHANGE REQUEST PROCESS
PURPOSE
The intended purpose of the City of Laguna Beach Budget Change Process Policy is to establish a policy and common procedures to be used by departments to propose modifications to their budget to ensure the effective management of the City’s fiscal operations, as authorized by the City Council.
GENERAL POLICY
The City Manager and, when necessary, the City Council, may consider requests for changes in the budget during the fiscal year that have been properly submitted by departments, and which are necessitated by changes in circumstances unforeseen at the time of the original budget approval.
The Department Heads are expected to maintain control of expenditures to properly administer their programs and services. When events occur that require modification in a budget, the Department Directors should take action to request changes in the budget to reflect the changed situation.
BUDGET CONTROL
1) The base level of budgetary control is at the fund level. This means that total appropriations for each fund may not be exceeded at the fund level without appropriate authorization by the City Council.
2) A transfer of funds from account to account within the same department and fund, excluding personnel accounts, capital items and capital improvement projects, for amounts up to $20,000, only require Department Director approval. 3) All other transfers of funds within the same fund require the approval of the Administrative Services Director and City Manager.
4) City Council approval is required for a budget change request that increases total appropriations in any fund and any adjustments related to capital items and capital improvement projects.
PROCEDURES
Budget Adjustments Approved Administratively
A. Prior to making a budget transfer request, department staff are responsible for verifying the account they are requesting for a budget transfer from has sufficient funds available, after considering outstanding encumbrances, to fund the amount of the request. 10 B. The department requesting a budget transfer should complete the Budget Transfer Request Form. The form should include an explanation with a reason necessitating the request and be signed by the Department Director. The completed form should be submitted to the Finance Division’s Administrative Analyst.
C. The Finance Division’s Administrative Analyst will review the Budget Transfer Request Form to verify the information on the form is complete and accurate.
D. When required, the Finance Division’s Administrative Analyst will forward the Budget Transfer Request Form to the Administrative Services Director who will review the request and either approve or deny the request. If the request is not approved, the Administrative Services Director will state their reason(s) and return the form to the initiating department.
If the request is approved, then the Administrative Services Director will sign the form and forward the request to the City Manager for consideration.
E. The City Manager shall review the request and if approved, sign the Budget Transfer Request Form, and return it to the Finance Division’s Administrative Analyst. If the City Manager does not approve the request, they will state their reason(s) and return the form Administrative Services Director who will then communicate the denial to the initiating department.
F. Upon receipt of the Budget Transfer Request Form with the required approvals, the Finance Division’s Administrative Analyst will enter the budget transfer in the City’s Finance system and send an email to the initiating department to notify them the adjustment has been posted.
G. Budget changes approved administratively will be reported to the City Council quarterly.
Budget Adjustments Approved by City Council
A. The department requesting a budget adjustment should consult with the City Manager regarding their intent to request a budget amendment for City Council approval at a future meeting agenda.
B. If the City Manager approves the request, then the initiating department shall prepare the necessary staff agenda report for the City Council meeting. The staff report should include the full account string(s) where the budget amendments are requested. The recommendation and financial analysis sections of the staff report shall be reviewed and approved by the Administrative Services Director.
C. Upon City Council approval, the Finance Division’s Administrative Analyst shall post the budget adjustment in the City’s Finance system and send an email to the initiating department to notify them the adjustment has been posted. 11