The Process of Budget Preparation in Hamilton County Ohio - Case Study Example

Due The process of budget preparation in Hamilton county Ohio involves preparing budget guidelines several months before the start of the fiscal year and is distributed to participants and they are given time tables of stages of submission and informed on any constraints (Bruggen 5). Departments and administrators are supposed to gather information about current operations, future programs, the needs of personnel and equipments and other unusual expenses. During this process, departmental budgets are merged and duly presented to finance committee of the board for consideration. At this stage, new programs and other expenditures are explained and finally the board approves the final budget which moves to the next stage. Last year Hamilton county administration used a budget process that estimated funding levels based on projected resources and priorities. It had provided early notice to the various departments in order to respond well to and plan for budget reductions. The county budget office had released a general cash budget forecast to departments in June which it revised in august in order to alert agencies of the scope of the budget reductions required for 2012 (Bruggen 5-8). Departments then responded to these forecasts in august and were given an opportunity to participate in the public budget working sessions with the board in September. This is done ahead of the release of the county administrators’ recommended budget which takes into account the department’s feedback and the commission’s direction. After this, it is released in October. When the budget is released, the county commission holds public hearings on the general fund budget where they review and build consensus around the budget during the weekly staff meetings before establishing budget levels in November. Passing of the budget is done in November, and it allows departments time to develop and implement budget management plans within the approved funding levels (Bruggen 5). In the preparation of Hamilton county budget, the budget office is the one mandated to release the general revenue fund forecasts/budgets to departments for later revisions (Bruggen 3). This forecast is released in June so as to allow the department’s ample time for revision in august. A budget practice is defined as a procedure that assists in accomplishing a principle and element of the budget process (Calia ET al.3). There are some recommended budget practices published in 1988 by the National Advisory Council on State and Local Budgeting (NACLSB). Calia et al. suggests that some of the recommended practices followed by Hamilton county Ohio include; identifying broad goals, which are contained in the county vision (1). Secondly, developing policy on debt insurance and management debt policy, the third one is developing performance measures, which are an integral part of the budget process which determines resource allocation. The fourth policy is developing mechanisms for budgetary compliance, which occurs through monthly monitoring. The other policy is the development of a process for preparing a budget through developing a budget calendar which is included in the county’s budget book. Developing and evaluating financial options by preparing revenue projections throughout the year. The next policy is making necessary changes adapt a budget whereby the county prepares and presents a recommended budget (Calia et al. 2). The second, last one is monitoring, measuring and evaluating performance through performing monthly projections. Lastly, the county makes adjustments as needed throughout the budget year. In the budget development process, the budget is reviewed several times before it can be approved. Firstly, the budget division staff begins the review of all budget components delivered to them and makes recommendations to be reviewed by the county administrator (Bruggen 5). These recommendations encompass each program, staffing level and requests for new equipment or programs. The second review happens when the budget analyst’s recommendations are completed, and they are reviewed by the assistant county administrator for administrative services. During this stage, it is also reviewed by the deputy director of the Department of Administrative Services (DAS) prior to the county administrators’ review. The budget is reviewed a third time by the county Administrator whereby the Board of County Commissioners (BOCC) then approves the administrators recommendations. Lastly, the budget is presented for a public review and comment whereby the BOCC further discusses the administrators recommended budget or other unresolved issues. The budget administrator is responsible for implementing policies from the county commission, developing and monitoring the capital and operating budgets and representing the commission on various boards and commissions. The budget director’s office is located at 138 Court Street. The accounts and budget guidelines of the county are organized on the basis of funds (Bruggen 3). Fund accounting discriminates revenue according to its intended intentions and is used to demonstrate compliance with legal and contractual provisions. According to Bruggen, the county has over 100 appropriated funds and sub funds, but the main ones are the general fund, special revenue, debt service, enterprise fund and internal service funds(3). The county general fund accounts for resources except those in another fund and requires to be accounted for. Special revenue funds are limited for specific uses. The county has many outstanding revenue funds to account for tax levies and social service programs, among many other limited functions. Debt service funds are only used to account for the principal payment and interest on the county’s indebtedness. Enterprise funds track the activities which Hamilton County recovers some of the costs from parties outside the government. This enterprise funds include stadium operations, parking also the Metropolitan Sewer District. The county’s uses internal service funds to allocate costs to other government funds. The County accounting is performed on an accrual basis that is modified for all the funds except enterprise funds. Revenues are considered in the period when they become measurable and available to meet any obligations. Actions are recorded on the accrual basis of accounting for enterprise funds whereby revenues are recognized when earned and become measurable, and expenses are recognized as they are incurred. Counties in the state of Ohio are on a cash basis required to prepare budgets whereby revenues are considered received and expenses are recognized when incurred (Bruggen 5). The guidelines on the budget and finance policies, the overall budget Process discussions including a description of funds are available on Hamilton’s county online centre Budgeting system and the recommended budget are made available via the online system to all county departments (Rhodes 66). If necessary, meetings with departments and the Administrator are held to refine the budget ahead of its presentation to the Board of County Commissioners (BOCC). The office has also implemented the on base document imaging system where all new contracts and related documents are available online (Rhodes 178). When the budget starts to make its way to the BOCC, county departments begin to assemble their operating budgets. The budget utilizes the “Performance Budgeting” software system. In prior years, departments submitted program sheets, followed by the line item documents. Performance is a fully integrated position budgeting system with departments entering goals/objectives/performance measures as the first step of budget preparation (Rhodes 75). This aspect of the process is followed by the submission of personnel information by departments and the input of non-personnel items. The budget process becomes a paperless budget cycle with all instructions, submissions, revisions and approval transmitted electronically. Additional training is supplied by the budget staff for departments, when requested. It is extremely valuable to involve stakeholders in the budget making process, therefore, during the Hamilton county budget preparation Departments respond to forecasts in writing. They are given a chance to participate in the public budget working sessions with the Board of County Commissioners around September; this is done ahead of the release of County Administrator’s recommended budget (Calia et al. 3). The Administrator’s recommendation takes into account the department’s feedback results and Commission’s direction to formulate a budget that addresses both, and is released in October. The County Commission then holds public hearings on the general fund budget during October and continues to review and build consensus around the budget at its staff meetings before establishing budget levels on November (Bruggen 4). The open budget process and passage date in November allow departments time to develop and implement management plans within approved funding levels. Therefore, during all this process, it is clear that stakeholders are afforded an opportunity to participate in the budget making process where their views are included in the budget (Calia et al. 3). References Dusty Rhodes. Comprehensive Annual Financial Report. 2009. Calia R, Guajardo S and Metzgar J. “Putting the NACSLB Recommended Budget Practices Into Action.” Government Finance Review Apr. 2000. John p. Bruggen. “Hamilton county Ohio.” Budget in Brief. 2011 Read More