The city should improve the monitoring of expenditures against the approved budget by establishing a centralized process to regularly monitor and report to the city administrator and the city council on the status of the budget.
On February 4, 2014, the City Council adopted the Budget Policies and Procedures Manual, which includes a section that specifically requires the Finance Director to provide quarterly budget reports to the City Council that compare budgeted to actual revenues and expenditures. The policy requires significant deviations to be explained. (See page 4 of Budget Policies and Procedures Manual.)
The Finance Director provides quarterly budget updates to the City Council at its regular, public meetings. The updates include current status, year-end forecasts, and recommended budget amendments where appropriate. City Department Heads receive budget reports in advance of the briefings to City Council and are asked to provide explanations for deviations of 10% or greater.
We followed up with the city to determine whether it formalized requirements through a policy, ordinance or resolution. In response, the city indicated that its finance director is drafting a budget policy to supplement the city charter requirements. The proposed policy will be submitted to the city council for adoption before preparation of the 2014-15 budget.
The city indicates that the finance director will present the quarterly budget report to the city council for the 2nd quarter of fiscal year 2012-13 and that future reports will contain more detailed information on current status, year-end forecast, and recommend budget revisions, where appropriate. The city also indicates that departments will receive quarterly budget reports in advance of the presentations to the city council and provide explanations for deviations of 10 percent or more, and that information will be provided to the city administrator for follow up and corrective action.
The city's response indicates the actions are planned, but not yet implemented in its regular practices. No date for implementation is given.
The city instituted quarterly budget reports to the city council beginning in May 2012. The city states that the budget presentation to city council outlined the budget requirements, process, and contents and reported the status of revenues and expenditures for the first quarter. The next quarterly budget report was scheduled for a September 2012 city council meeting. However, the city did not address whether it has developed a process for city executives to regularly report the budget status of their departments to the city administrator. (See 2013-406, p. 196)
Agency responses received after June 2013 are posted verbatim.