Budget Authority

 

Why now? To effectively manage church funds, there must be a meeting of the minds (agreement) on what authority the budget carries. As we look to bolster our fiscal accountability, we should concurrently shore up some areas where we have operated on individual presumptions for decades. I have included various perspectives for consideration, including my draft and a prompt for yours.

From the Federal Perspective. Budget Authority (BA) is the authority provided by law to enter into obligations that will result in immediate or future outlays. It may be classified by the period of availability, by the timing of congressional action, or by the manner of determining the amount available.

Family Budget (many, not all). This is a strict to-the-penny layout of how every cent with be allocated. There is no debate or discretion to alter the budget, well, until the first time someone uses the phrase, but we need it. Typically, this is a set-the-numbers within the expected income, and hope it works, and there is nothing unexpected ahead. Multiple revisions are often needed.

Cavalier Budget. Words and numbers are used for the sake of display, but at best, they are a guide. This is often the first draft of a family budget when the family is reluctant to do the budgeting work.

From the Oklahoma Municipal League.

Budgets, Do I really have to have one? Who is responsible for creating the budget? Are there legal deadlines?

Who is responsible for creating the budget? Are there legal deadlines?

Developing a Budget is a never-ending process. It begins the moment you begin your fiscal year and ends, only to begin again.

There are two basic budget options for Oklahoma municipalities. The Municipal Budget Act (11.O.S. §§ 17-201 through 17-216) and the Estimate of Need Law ( 68 O.S. §§ 3001 through 3033 & 62 O.S. § 461). You will need to determine which one is Applicable to your municipality.

It will depend on your form of government on who prepares the budget.

Aldermanic form of Government - Mayor prepares the budget

Council-Manager form of Government - City Manager prepares the budget

Strong-Mayor form of Government - Mayor prepares the budget

Town form of Government - Council prepares the budget

The legal deadlines for municipalities under the Municipal Budget Act are as follows:

Chief Executive Officer must submit the budget to the Governing Body thirty (30) days prior to the beginning of the fiscal year. (June 1st)

Governing Body must hold a public hearing on the proposal no later than fifteen (15) days prior to the beginning of the fiscal year. (June 15th)

Notice of the date, time and place of the hearing together with the proposed budget summary shall be published in a newspaper of general circulation in the municipality not less than five (5) days before the date of the hearing. (June 11th)

Governing Body must adopt budget by resolution at least seven (7) days prior to the beginning of the fiscal year. (June 24th)

Adopted budget must be filed with the State Auditior & Inspector and Municipal Clerk on or before the first day of the fiscal year. (July 1st)

Within fifteen (15) days after filing with the State Auditor & Inspector, any taxpayer may protest alleged irregularities.

The legal deadlines for municipalities under the Estimate of Need Law are as follows:

Governing Body must begin preparing Estimate of Need and report of revenues, the first Monday in August. (1st Monday in August)

Excise Board convenes July 1, to set schedule for public meetings. (July 1st)

Prepare Estimate of Needs. (by September 1st)

Submit financials and needs of estimate to county excise board.

Incorporated towns by August 22^nd. Cities by August 27th

Publication affidavit filed at least 5 days after budget filing.

 

Presbytery Budget is formulated by committee input (generally formed in the summer meetings), the moderator, and the finance committee.  Committee requests should be as detailed as practical. Unlike the local church sessions, the finance committee will apportion the budget expense among the several congregations of the presbytery.

 

For the Church Budget (Tom’s Draft)

The budget is the authority for designated individuals to obligate and expend funds. It is in effect for a prescribed period, typically 12 months. It may be changed or modified by the same authority that established it (in this case the session).

The budget organization is the line item. Many line items are the sum of other line items. Budget amendments typically are addressed by the line items affected and the total. While funds may be obligated absent the presence of funds, all expenditures are subject to the availability of funds.

It is binding upon those authorized to expend funds, but recognizes that sometimes, the dynamic nature of the organizational mission creates gaps in reconciliation, and expenses may unintentionally exceed the authorized funds. The overspending need not result in punitive action, but further expenditure must cease until more funds are authorized.

To best manage a budget, Fund Administrators (FA) should be assigned where possible. All expenditure within a specific line item should be routed through and approved by the FA. In the small church, the FA expends most of the funds authorized by the budget line item.

Funds may not be moved from one line item to another unless approved by the session, even when the same FA manages both/all. Some purchases involve multiple line items. In those cases, FAs need to be especially attentive to those obligations and expenditures within their purview while coordinating with other FAs. In practice, most FAs are just managing a check register as they are also the exclusive expender of the funds authorized.

Your Draft