the municipal secretary desktop reference manual - Southwestern ...

FINANCIAL MANAGEMENT STANDARDS
FOR SMALL MUNICIPALITIES
FACTOR: THE MUNICIPAL BUDGET/FISCAL PLAN: PLANNING AND PROCESS
Standards
1. Budget preparation is the responsibility of an appointed official who has a general
understanding of, or who has been trained, in the area of budgeting and municipal
financial management practices.
Commentary
It is an error to believe that anyone can prepare the municipal budget. Skill and knowledge on the
part of the budget preparer are essential if elected officials are to have a budget that will provide
accurate information, in a format that will clearly let them assess the fiscal condition of the
municipality and spending priorities. Spending and revenue projections, based on incomplete or
faulty information or data, can rarely result in good decisions.
2. The annual budget contains a budget message which, among other things, draws
attention not only to positive situations but also to areas of concern.
Commentary
Ideally, for areas of fiscal concern (such as: drop in revenues, tax increases, or personnel needs for
which funds are not available), the budget message should not only call attention to these matters but
also provide commentary and, where appropriate, alternatives for resolving the problem together
with specifics on the recommended approach in the proposed budget. The budget documents should
be suitable for use by government officials, the public, and the media. It is a critically important
communication device.
3. The budget is comprehensive, covering all governmental, proprietary and fiduciary
funds for each fiscal year. The budget, as an essential element of financial planning,
control, and evaluation, presents projected revenues and expenditures for both capital
and operating areas for all funds.
Commentary
This comprehensive approach to budgeting is essential in monitoring the fiscal health of the
municipality and in communicating what it plans to do. Any other approach can result in an
inaccurate and incomplete picture of expenditures and revenues and, thus, hinders good fiscal
planning. Projected expenditures for the capital budget and revenue projects should come from the
multi-year fiscal plan.
4. There are established procedures, including a budget calendar, which guide budget
preparation and adoption. The procedures prescribe format and data requirements
(such as a statement of need, work volume, cost data and proposed benefits) for budget
submissions and include a stipulation that at least one public hearing on the budget be
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