HomeMy Public PortalAbout2120.2 - Business and Financial Services - Management & Budget - Operating Budget Appropriation for Prior-Year EncumbrancesOffice of Business and Financial Services
Management and Budget Section 2120.2
Policies and Procedures Manual Page 1
2120.2 SUBJECT: OPERATING BUDGET APPROPRIATION FOR
PRIOR-YEAR ENCUMBRANCES
:1 OBJECTIVE:
To establish procedures for the re-appropriation of operating budget
encumbrances in the subsequent fiscal year.
:2 AUTHORITY:
This policy is adopted by the City Council, April 11, 2011
: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.
It is the City’s practice that all valid encumbrances with a balance
remaining at fiscal year-end will be carried forward to the ensuing fiscal
year. The purpose of this policy is to provide criteria for determining
which encumbrances are eligible for budget re-appropriation in that
ensuing fiscal year.
B. Re-Appropriation Criteria
In accordance with City Policy, Department Directors, Office Heads, and
Division Managers are responsible for requesting operating budget
appropriations in the fiscal year when expenditures are expected to be
made. No carry-forward of operating budget appropriations to a future
fiscal year for encumbrances will be permitted except for the limited
circumstances contained in this policy.
The following requirements must be met for a budget re-appropriation to
cover an encumbrance carried forward from a prior fiscal year:
Office of Business and Financial Services
Management and Budget Section 2120.2
Policies and Procedures Manual Page 2
1. Operating expenses related to a valid purchase order that is
limited to a one-time item or event and there is a reasonable
expectation that payment will occur early in the next fiscal year.
Eligible items should come primarily from the Contractual
Services Account Group.
2. Re-appropriation for capital outlay (equipment) when an
encumbrance has been approved and a purchase order is issued,
but the equipment has a production lead-time that makes
delivery by the end of the fiscal year impractical. Eligible items
must come from encumbrances in the Capital Account Group.
C. Prohibitions, Restrictions and Exceptions
1. Re-appropriation requests from funds in the Salaries and Wages
or Benefits categories are prohibited.
2. Re-appropriation requests must meet the minimum dollar
threshold of $25,000.
3. Nothing in this policy shall prohibit the carry-forward of
encumbrances or balances remaining in a capital project.
4. Nothing in this policy shall prohibit the carry-forward of
encumbrances in funds with dedicated revenue sources when
such carry-forward is in essence a re-appropriation of restricted
use funding.
D. Responsibilities
1. Purchasing and Materials Management Division Manager
The Purchasing and Materials Management Division Manager,
in consultation with the Chief Financial Officer, shall prepare
and distribute a fiscal year-end calendar that provides dates by
which certain purchasing transactions must be entered in the
financial system in order to be completed and recorded against
the current fiscal year budget.
2. Department Directors, Office Heads, and Division Managers
Department Directors, Office Heads, and Division Managers are
responsible for reviewing the accuracy of program
encumbrances and providing timely notification to the Office of
Business Services and/or Purchasing and Materials Management
when a correction is required. In accordance with the year-end
purchasing schedule, Department Directors must submit a
written request to the Chief Financial Officer for approval to re-
appropriate an operating encumbrance that meets the provisions
of this policy.
Office of Business and Financial Services
Management and Budget Section 2120.2
Policies and Procedures Manual Page 3
3) Chief Financial Officer
The Chief Financial Officer or his/her designee shall review all
requests to re-appropriate operating budget encumbrances to
ensure compliance with this policy. The Chief Financial Officer
shall have prepared a list of eligible requests for review by the
Mayor. If there are valid encumbrances that require re-
appropriation, the Chief Financial Officer shall follow applicable
City policies and procedures relating to the amendment of the
operating budget.
:5 FORMS:
None.
:6 COMMITTEE RESPONSIBILITIES:
None.
:7 REFERENCE:
Procedure adopted by City Council February 26, 2007, Item A5; amended April
11, 2011, Item A-1.
:8 EFFECTIVE DATE:
This procedure effective April 11, 2011.