HomeMy Public PortalAbout2100.4 - Business and Financial Services - Management & Budget - Expenditure PolicyOffice of Business and Financial Services
Management and Budget Section 2100.4
Policies and Procedures Manual Page 1
2100.4 SUBJECT: EXPENDITURE POLICY
:1 OBJECTIVE:
To establish policies and procedures guiding administration of City expenditures
practices to ensure financial stability, enhance financial planning, and promote sound
financial management.
:2 AUTHORITY:
This policy is adopted by the City Council November 1, 2010, Item A-2.
:3 DIRECTION:
The Chief Financial Officer, as an appointed official, serves at the pleasure of and
receives direction from the Mayor.
:4 FUNCTIONS:
A. Introduction
City government, as an institution, has multiple partners including citizens,
taxpayers, businesses, visitors, employees, and other governments. As a major
institutional, economic, and service force in the region, it is important that the
City strengthen relationships with its partners by adopting a clear and
comprehensive set of policies and procedures.
Furthermore the integrity of the City of Orlando is of utmost importance, and
adopting a set of policies is a key element to maintain this integrity. The
expenditure objectives and policies stated herein shall provide the framework for
developing and ensuring adherence to the City’s budget.
B. Objective
The City of Orlando will provide the level of expenditure necessary for the
ongoing health, safety, and welfare of its residents, businesses, and visitors. In
order to accomplish this objective, the following statements shall guide the
allocation of resources:
1. The City will identify priority services, establish appropriate service
levels, and administer the expenditure of available resources to assure
fiscal stability and the effective and efficient delivery of service.
2. Essential City services will receive first priority in funding decisions.
Essential City service refers to those activities that protect lives and
property.
3. The City shall require that, to the extent possible, increased demand for
service as a result of growth shall be paid for through taxes and fees
collected as a result of that growth.
Office of Business and Financial Services
Management and Budget Section 2100.4
Policies and Procedures Manual Page 2
4. The budget will be structured so that the City Council and the general
public can readily establish the relationship between expenditures and
the achievement of service objectives. The budget shall be developed
using budget best practices, and annually the City will strive to achieve
the Government Finance Officers Association’s Distinguished Budget
Presentation Award.
C. Policies
1. Appropriation and Control
a. Budgets shall be appropriated by the City Council. The level of
control is established at:
1) Department level for the General Fund
2) Project level for capital improvement projects
3) Fund level for all other funds
b. The level of budgetary control shall not be exceeded.
Departments shall also reduce their expenditures to offset
revenue shortfalls.
c. Appropriations are not guaranteed from one fiscal year to the
next. Each year appropriation levels shall be based on a detailed
review of spending needs, priorities, expected results, and
available funding.
d. At the close of the fiscal year, the Department of Finance shall
prepare a comprehensive annual financial report that contains
statements which compare audited expenses relative to
budgetary appropriations. The report will include an explanation
of each instance in which expenditures exceeded appropriation.
2. Maintenance of Capital Assets
Within the resources available each year, the City will maintain all
physical assets at a level adequate to protect the City’s capital
investment, to minimize future maintenance and replacement costs, and
to maintain current service level.
3. Avoidance of Operating Deficits
The City will take immediate corrective action if at any time during the
fiscal year expenditure projections exceed revenue estimates. Corrective
action may include a hiring freeze or other expenditure reducing
measure.
Office of Business and Financial Services
Management and Budget Section 2100.4
Policies and Procedures Manual Page 3
The following actions shall not be used to balance the budget when an
operating deficit is identified:
a. Expenditure deferrals to the following year
b. Short-term loans
c. Use of one-time revenue
4. Pension Funds
Annually an actuarial study shall be conducted by a private actuary to
determine the current pension contribution that must be made to the
City’s pension plans. The City will not defer the current pension
contribution to future years.
5. Program Review and Productivity
a. Periodically the City shall conduct internal and third-party
reviews of programs for efficiency and effectiveness. Programs
that are determined to be inefficient and/or ineffective shall be
reduced in scope, eliminated, or restructured.
b. Within existing legal authority and contractual obligations, the
City will consider the delivery of services by other public or
private organizations whenever greater efficiency or
effectiveness can be achieved.
c. The City will develop and use technology and productivity
enhancements to avoid increases in personnel costs.
6. Contingencies
a. The City budget shall include a General Fund contingency in
order to accommodate unexpected operational changes,
legislative impacts, or other economic uncertainty that may
affect the City’s operations which cannot be reasonably
anticipated at the time the budget is prepared. Through the
Budget Review Committee Process, City Council approval is
required to use funds budgeted in the General Fund contingency.
b. Contingencies shall be used in funds other than the General Fund
for similar purposes plus, if applicable, designated amounts to
fund future construction projects, reserves, or other operating
purpose.
7. Administrative Costs
a. In all program areas, administrative overhead costs shall be kept
to the minimum necessary to support operations.
Office of Business and Financial Services
Management and Budget Section 2100.4
Policies and Procedures Manual Page 4
b. Except for those funds where it is specifically prohibited or
financially unfeasible, an administrative overhead charge should
be assessed on all funds that utilize the services of the General
Fund.
:5 FORMS
None
:6 COMMITTEE RESPONSIBILITIES
None
:7 REFERENCE
Procedure adopted by City Council February 26, 2007, Item A5; amended November 1,
2010, Item A-2.
:8 EFFECTIVE DATE
This procedure effective November 1, 2010.