Budget and Financial Planning
Phone: 913-715-0605
111 S. Cherry St., Suite 2300, Olathe, KS 66061
It is the policy of the Board of County Commissioners (BOCC) to promote efficiency and effectiveness in the management and operation of County programs and the utilization of available financial resources by the adoption of a balanced annual operating budget for the fiscal year. It is the responsibility of all elected officials, agency directors, department directors, governing boards, and employees to exercise good stewardship in the management of public funds and resources according to applicable statutes, BOCC policies, County procedures, and approved budgets.
Responsibilities:
The BOCC shall plan for the orderly operation of the County by the adoption of a balanced annual operating budget of anticipated revenues and proposed expenditures for the fiscal year. The proposed expenditures are presented in broad categories (personal services, contractual services, commodities, etc.) and, upon adoption of the budget, become appropriations of monies for that stated purpose. Use of funds shall be as appropriated unless transfers, amendments, or revisions are approved.
The County Manager is responsible for recommending a prudent, balanced annual operating budget to the BOCC for adoption.
The Director of Budget and Financial Planning is responsible for:
The Director of Treasury and Financial Management and the Director of Budget and Financial Planning are responsible for preparing periodic financial reports that monitor actual financial results as compared to the annual operating budget.
Elected officials, governing boards, agency directors, and department directors are responsible for:
Resolution No. 122-02
Revision Number: 015-14
Date of Last Review: Adopted 12-19-02, Revised 04-03-14
The County Manager shall establish the budget calendar for the next operating budget cycle. The budget calendar shall comply with applicable statutes regarding adoption of the annual budget, and shall include the following provisions:
Resolution No. 122-02
Revision Number: 015-14
Date of Last Review: Adopted 12-19-02, Revised 04-03-14
It is the policy of the BOCC to maintain a Multi-Year Budget Projection of revenues, expenditures, and reserves. The projection shall be reviewed during the annual operating budget cycle and shall be updated periodically due to changes in policy, legislation, and the economy. The projection will cover a minimum of five years.
Definitions:
The Multi-Year Budget Projection is a forecasting model that includes estimates of revenues, expenditures, and reserves for the County’s budgeted funds. The forecasting model is prepared to illustrate the impact of potential policy decisions on the County’s fiscal condition and to provide an advance warning of potential fiscal problems.
Responsibilities:
Resolution No. 122-02
Revision Number: 015-14
Date of Last Review: Adopted 12-19-02, Revised 04-03-14
The Director of Budget and Financial Planning is responsible for coordinating and evaluating the estimation of major revenue sources included in the annual operating budget. Revenues shall be estimated using a conservative approach to avoid budget shortfalls during the fiscal year.
If a revenue shortfall is anticipated after the annual operating budget is adopted, the County Manager shall submit a recommended plan to the BOCC, as soon as practical but not to exceed 90 days following receipt of notice from the Director of Budget and Financial Planning, to balance the estimated revenues and expenditures.
Responsibilities:
The County Manager shall establish financial procedures that define the County’s major revenue sources.
Restricted Revenues:
It is the policy of the BOCC that revenues restricted by either statute or BOCC direction shall be expended in accordance with the specified intent.
The County’s major revenue sources are defined as the following revenues:
The Director of Budget and Financial Planning is responsible for appointing a Revenue Coordinator from the Budget and Financial Planning Department. The Revenue Coordinator is responsible for coordinating the annual revenue estimating process for the County’s major revenue sources.
The annual revenue estimating process for the County's major revenue sources will include a Revenue Estimating Committee. This committee will be comprised of the following positions:
The Revenue Estimating Committee will meet periodically to review major revenue trends and to provide a revenue forecast for the annual budget and the Multi-year Budget Projection.
Resolution No. 122-02
Revision Number: 015-14
Date of Last Review: Adopted 12-19-02, Revised 04-03-14
It is the policy of the BOCC to attempt to reduce the County’s degree of reliance on ad valorem taxes (i.e., property taxes) for annual operating revenues by pursuing appropriate fees for services rendered. Reasonable fees for goods and services shall be based on the following criteria: (i) BOCC policies (ii) cost of service provided, (iii) community standards, and (iv) applicable laws, rules and regulations.
Fees will be set taking into account the full cost of service, both direct and indirect, the primary beneficiary of the service, prevailing market conditions when appropriate, and specific policy direction of the BOCC. The full cost of services will be calculated in a method consistent with current cost accounting principles and will include overhead, or indirect costs, of both the department and the County, as well as direct costs.
The portion of the full cost of services included in the fee rate structure will reflect the beneficiaries of the services. Fee rates for services solely benefitting individuals should be set to recover the full costs for those services. Services benefitting the community rather than individuals should be funded by taxes rather than fees. For services that benefit both individual recipients and the community, the portion of fees and taxes should approximate the apportionment of the benefits. An exception would be made for those County programs and services that are designed to support or incent participation by the public and thus may not have cost recovery as a primary objective. Agencies and departments shall regularly review their fee schedules in order to meet these criteria.
Fees for service will be reviewed for adjustments annually and included for the BOCC’s consideration in the annual budget process. Market conditions and inflationary cost increases will be reviewed to determine necessary annual increases and large increases in a single year shall be avoided if at all possible. Full cost calculations will be performed every three to five years to ensure the accuracy of services’ cost basis.
Resolution No. 122-02
Revision Number: 015-14
Date of Last Review: Adopted 12-19-02, Revised 04-03-14
It is the policy of the BOCC that one-time (non-recurring) and unpredictable revenues shall not be used to fund on-going expenditures. On-going expenditures shall be funded with on-going sources of revenue. However, reserves may be used on a short-term basis to offset the impact of economic downturns, so long as adjustments are made to restore the structural balance of the operating budget within one to two fiscal years. (see Section #110 for more information on reserves).
At a minimum, potential uses for one-time and unpredictable revenues (including excess reserves) will be reviewed on an annual basis by the BOCC as part of the operating budget cycle. If necessary, the BOCC and appropriate governing board will review potential uses for one-time and unpredictable revenues outside of the annual operating budget cycle which, if approved, will require special appropriation for expenditure. In addition, reserves in excess of the amount established by policy may be retained, and not expended, by the County at the discretion of the BOCC.
Definitions:
Reserves are the difference between the current assets (cash, accounts receivable, investments, etc.) and the current liabilities (salary and wages payable, accounts payable, etc.) of each County fund. Reserves are also known by other names, such as rainy day funds, and contingency funds. See Section #110 for more information on reserves.
Excess reserves are amounts that exceed the target level for reserves established by BOCC policy. Excess reserves may exist due to one-time revenues, unpredictable revenues, expenditures being less than originally budgeted, the accumulation of resources for capital asset replacement, and/or the accumulation of resources for prepayment of outstanding debt.
One-time revenues are the result of a unique or special event (sale of a building, auction revenues, excess reserves, etc.).
Unpredictable revenues are the increment of a volatile revenue source, which is above the amount that can normally be expected to be collected during a fiscal year.
Resolution No. 122-02
Revision Number: 015-14
Date of Last Review: Adopted 12-19-02, Revised 04-03-14
The County seeks to maintain or improve existing credit ratings through strong financial management, including the avoidance of operating deficits and short-term borrowing for operations. It is the policy of the BOCC that the County’s annual adopted operating budget will avoid the following situations for the combined budgets of the General Fund and the Special Revenue Funds:
If any of the events listed above is reflected in the actual audited financial statements, the BOCC and County Manager shall review and address the situation(s) in a timely manner.
Agencies and departments shall notify the County Manager and Budget and Financial Planning Department of any potential budgetary problems (i.e., projected revenue shortfalls and/or projected expenditures greater than budget) as soon as practical, but no later than 90 days prior to the end of the fiscal year.
Definitions:
A current operating deficit occurs when total revenues are less than total expenditures during a given fiscal year. For the purposes of the deficit calculation, total expenditures exclude one-time expenditures that have been approved by the BOCC and are funded through use of reserves (examples would include one-time capital expenditures such as capital projects in the County’s Capital Improvement Program).
Responsibilities:
The County Manager is responsible for monitoring financial operations, reviewing the reason(s) for operating deficits, and addressing operating deficits in a timely manner.
Elected officials, agency directors, department directors, agency budget managers, and department budget managers are responsible for managing their annual budgets and working with the Budget and Financial Planning Department to anticipate potential problems. By anticipating potential problems, delays in processing financial transactions due to insufficient budgetary appropriations can be avoided.
Resolution No. 122-02
Revision Number: 015-14
Date of Last Review: Adopted 12-19-02, Revised 04-03-14
It is the policy of the BOCC to budget and appropriate sufficient funds in each budget year to pay the estimated and expected expenditures occurring during that fiscal year for the payout of accrued vacation and sick leave to employees who have retired or otherwise terminated their employment with the County in good standing.
Such funds shall be included in the Countywide (non-departmental) budget within the General Fund and shall be available for use in making such payments on behalf of all departments and agencies.
Responsibilities:
The County Manager shall establish procedures that define the eligibility criteria for vacation and sick leave payouts.
Elected officials, agency directors, and department directors are responsible for notifying the Director of Human Resources of any known separations or retirements that will occur in the upcoming fiscal year. The Director of Human Resources is responsible for compiling this separation/retirement information and providing the relevant information to the Director of Budget and Financial Planning and the Director of Treasury and Financial Management.
Resolution No. 122-02
Revision Number: 015-14
Date of Last Review: Adopted 12-19-02, Revised 04-03-14
Since the annual operating budget is formulated well in advance of its execution, the BOCC recognizes that it may be necessary to amend the budget of a County fund. If unexpected or unfunded expenditures must be made, department directors are expected to manage their available resources, economize, and reevaluate priorities before requesting a budget amendment.
lt is the policy of the BOCC to amend a fund’s budget for emergencies, federal and state mandates, or other circumstances which could not be anticipated, and only if sufficient funds are available; a budget may not be amended simply because additional revenues become available.
The BOCC may authorize an amendment of any current fiscal year budget, at the fund level, after giving public notice and holding a public hearing as required by state statute (K.S.A. 79-2929a).
Definitions:
A budget amendment is defined as an increase in the published budget authority, at the fund level, for the current fiscal year operating budget. By statute, any budget amendments require formal approval by the BOCC.
Published budget authority, at the fund level, is defined as the total of budgeted expenditures and budgeted reserves for a given County fund.
Responsibilities:
The County Manager is responsible for recommending budget amendments to the BOCC.
The Director of Budget and Financial Planning is responsible for coordinating agency and department budget amendment requests and ensuring compliance with applicable state budget laws and County budgetary policies and procedures.
Elected officials, agency directors, and department directors are responsible for submitting, explaining, and justifying budget amendment requests. Elected officials, agency directors, department directors, agency budget managers, and department budget managers are responsible for managing their annual budgets and working with the Budget and Financial Planning Department to anticipate potential problems. By anticipating potential problems, delays in processing financial transactions due to insufficient budgetary appropriations can be avoided.
Resolution No. 122-02
Revision Number: 015-14
Date of Last Review: Adopted 12-19-02, Revised 04-03-14
Since the annual operating budget is formulated well in advance of its execution, the BOCC recognizes that it may be necessary to revise the budget of a County agency or department. If unexpected or unfunded expenditures must be made, department directors are expected to manage their available resources, economize, and reevaluate priorities before requesting a budget revision.
The County Manager may authorize budget revisions to reallocate budgeted expenditures between departments within the General Fund without the formal approval of the BOCC whenever:
If a reallocation will materially alter any specific departmental budget or potentially conflict with a policy direction of the BOCC, then prior to authorizing any revision, the County Manager will provide notice to the BOCC.
The County Manager may authorize budget revisions to reallocate budgeted expenditures within an agency or department.
The County Manager may authorize budget revisions to increase the current fiscal year expenditure budget for the General Fund in a cumulative amount up to $250,000, funded from the General Fund reserve, without approval of the BOCC. Any budget revisions, on a cumulative basis, which increase the General Fund expenditure budget by greater than $250,000, funded from the General Fund reserve, require approval of the BOCC.
The County Manager may authorize budget revisions to increase the current fiscal year expenditure budget for a County fund, except the General Fund, in a cumulative amount up to $100,000, funded from the reserve in the relevant County fund, without approval of the BOCC. Any budget revisions, on a cumulative basis, which increase the expenditure budget for a County fund, except the General Fund, by greater than $100,000 require approval of the BOCC.
The County Manager may authorize the increase of the current fiscal year expenditure budget for any County fund in any amount if the increase is funded from unanticipated grant revenue, state contract revenue, or reimbursement revenue. The County Manager may authorize the increase of the current fiscal year expenditure budget for certain structured accounts that are 100% funded from fees.
Budget revisions may not increase the total published budget authority of any County fund. These types of requests must be handled according to Section 120.10 Unexpected or Unfunded Expenditures – Budget Amendments.
The County Manager may authorize the reallocation of existing budgeted full-time equivalent positions (FTEs) between departments. The County Manager may not increase the total number of FTEs authorized in the operating budget. The BOCC must approve any increase in the authorized FTE count.
Definitions:
A budget revision is defined as a change in current fiscal year budget expenditure authority for any County agency or department that does not result in an increase in the published budget authority of any County fund.
A budget revision may involve changes in the expenditure categories (personal services, contractual services, commodities, capital outlay, etc.) within a single agency or department budget. A budget revision may also involve increasing an agency or department budget and decreasing another agency or department budget or reserve amount within the same County fund.
Published budget authority, at the fund level, is defined as the total of budgeted expenditures and budgeted reserves for a given County fund.
Responsibilities:
The Director of Budget and Financial Planning is responsible for coordinating agency and department budget revision requests and ensuring compliance with applicable state budget laws and County budgetary policies and procedures.
Elected officials, agency directors, and department directors are responsible for submitting, explaining, and justifying budget revision requests. Elected officials, agency directors, department directors, agency budget managers, and department budget managers are responsible for managing their annual budgets and working with the Budget and Financial Planning Department to anticipate potential problems. By anticipating potential problems, delays in processing financial transactions due to insufficient budgetary appropriations can be avoided.
Resolution No. 122-02
Revision Number: 015-14
Date of Last Review: Adopted 12-19-02, Revised 04-03-14
It is the policy of the BOCC to establish accounts, when appropriate and necessary, to track project-related revenues and expenditures. These project accounts, which may have financial transactions that occur in multiple fiscal years, shall be appropriated by the BOCC in a separate action or included in the annual budget adopted by the BOCC. Such funds are considered appropriated for a specific project and cannot be used for any other purpose unless the project is closed and the funds are re-appropriated. The BOCC shall review existing project accounts during the annual budget process.
Definitions:
A capital project account is for the construction, improvement, or acquisition of capital assets. A capital project account may have financial transactions that occur in multiple fiscal years.
A non-capital project account is for infrequent and/or unusual activities that may have financial transactions that occur in multiple fiscal years. These project accounts may or may not include on-going activities of the County. Examples include studies, asset replacement accounts (for assets that do not meet the definition of a capital asset, but are replaced less frequently than an annual basis), and other variable expenditures (such as costs for storm-related cleanup).
Responsibilities:
The BOCC is responsible for the authorization of all project accounts.
The County Manager is responsible for recommending the establishment of proposed project accounts. Recommendations may occur in the annual budget process or in a separate process.
The Director of Budget and Financial Planning is responsible for coordinating agency and department project account requests, and ensuring compliance with applicable state budget laws and County budgetary policies and procedures.
Elected officials, agency directors, and department directors are responsible for submitting, explaining, and justifying project account requests and for managing budgetary resources in a prudent manner.
Resolution No. 122-02
Revision Number: 015-14
Date of Last Review: Adopted 12-19-02, Revised 04-03-14
It is the policy of the BOCC that open encumbrances for outstanding purchase orders less than $25,000 lapse at the end of the fiscal year. Open encumbrances for outstanding purchase orders equal to or greater than $25,000 will continue as an obligation of the prior year budget for a maximum of twelve (12) months. The Director of Budget and Financial Planning may extend this twelve (12) month maximum for individual purchase orders.
Definitions:
An encumbrance is a commitment of budgeted funds to purchase an item or service prior to actual payment and prior to actual delivery of the item or service. Generally, an encumbrance is created after a contractual obligation has been incurred.
Procedure 120.13 Encumbrances
Resolution No. 122-02
Revision Number: 015-14
Date of Last Review: Adopted 12-19-02, Revised 04-03-14
111 S Cherry St, Olathe, KS 66061 | 913-715-5000 | TDD: 800-766-3777
© Johnson County, KS, USA 2018
