Monitoring the Budget Process

The most important step of the budget process follows adoption: monitoring revenues and expenditures for the budget year. A few basic practices will help you adequately monitor the income and expenditures of your city.

First, devise a monthly report in order to give elected officials and department heads a current picture of the city’s finances.

Second, during the course of the fiscal year, prepare a quarterly or mid-year budget review. This will help with the third most important aspect of the monitoring process: budget amendments. Even the best budget will miss a line item. T.C.A. § 6-56-209 allows the governing body to authorize the budget officer to transfer funds from one appropriation to another within the same fund, subject to any limitations established by the governing body. Any transfers must be reported to the governing body at its next regular meeting and entered into the minutes. The law also permits budget amendments when transfers are insufficient to align appropriations with actual expenditures. Under T.C.A. § 6-56-208, the budget ordinance may be amended in the same manner as any other ordinance. A public hearing is not required for a budget amendment.

It is impossible to overemphasize the need for budget monitoring. Without it, the budget process is incomplete and may place the city in a tenuous financial position.