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Heads Up – Budget Amendments


December 4, 2014 by Toni Nelson
Category: Budgets and Budgeting

Heads Up – Budget Amendments

Now that cities, towns, and counties are wrapping up their budgets for the coming year, it’s time to turn our attention back to the current budget and the last month or so of activity.  I say “or so” because of the open period that is used by the majority of you.

You ask, what is the “open period”?

For cities and towns, the open period refers to the period of time between December 31 (fiscal year end) and January 20th of the following fiscal year.  RCW 35.33.151/35A.33.150 states in part:

…the accounts for budgetary control for each fiscal year shall be kept open for twenty days after the close of such fiscal year for the purpose of paying and recording claims for indebtedness incurred during such fiscal year.

For counties, the open period is a bit different. RCW 36.40.200 states in part:

All appropriations shall lapse at the end of the fiscal year: PROVIDED, That the appropriation accounts may remain open for a period of thirty days, and may, at the auditor’s discretion, remain open for a period not to exceed sixty days thereafter for the payment of claims incurred against such appropriations prior to the close of the fiscal year.

You will note that for cities and towns the RCW states that you “shall” hold open your budget for the first 20 days of the new year which is interpreted by the State Auditor’s Office to mean that you will hold open your budget, while the RCW for counties states that you “may” leave the budget open which provide counties with the option to hold the budget open for 30 days or, if required by the county auditor, up to a maximum of 60 days.

Now you may ask why I went into all this detail about the open period when the article is supposed to be about budget amendments. I did this because the RCWs associated with the adoption of the budget and its amendments lapse at fiscal year end; therefore, any amendments must be adopted by December 31st. There has been some confusion in the past over this issue but RCW 35.33.121/35A.33.120  states in part that appropriations are for the “fiscal year” :

The expenditures as classified and itemized in the final budget shall constitute the city’s or town’s appropriations for the ensuing fiscal year… [T]he expenditure of city or town funds or the incurring of current liabilities on behalf of the city or town shall be limited to…the total amount appropriated for each fund in the budget for the current fiscal year.

As you can see, this can set the stage for a few complications. Our remaining budget appropriations may look good, but do we know what the open period expenditures will be and is our remaining budget sufficient to meet those expenditures?

Each year at this time we receive calls and emails about passing budget amendments. A budget amendment is required anytime that your jurisdiction’s budget appropriation is going to be exceeded. A budget appropriation can be adopted in several different ways: some entities adopt at the fund level, while others may adopt at the department level, and for others it may be a combination of both.

A budget amendment may or may not be needed in your jurisdiction. To make this determination you will need to review the year-to-date financials to see if your current expenses and liabilities are less than your budgeted appropriations. As part of this review process, you will need to additionally estimate the remaining expenditures for the year including your open period. For many, the open period will include year-end obligations such as fourth quarter payroll tax and benefit liabilities, state excise tax liability, and maintenance and operations obligations incurred during the month of December.

Once you have determined your remaining expenditure obligations, you will need to compare them to your remaining available budget appropriation. If you adopt your budget at the fund level, your focus will be on the bottom line, but if you budget at the department level, your focus will shift to the appropriation provided for that department and/or activity. Should you discover that there is an insufficient appropriations balance remaining to meet these obligations, a budget amendment will be necessary and you will need to schedule to adopt it prior to the end of the year (December 31st).

For counties the process is the same with just enough of a difference that it’s worth noting. Budget amendments are provided for under RCW 36.40.100, RCW 36.40.140, and RCW 36.40.195 and the limitation on expenditures is found in RCW 36.40.130, but perhaps the most significant difference is the timing of adopting a supplemental budget.  Should you discover that a supplemental budget resolution is needed, RCW 36.40.100 requires a publication notice for the meeting that will adopt the resolution.

Now the final question, can we adopt a budget amendment in a special meeting? And the answer is generally “yes.” There can be exceptions for local code or for certain classifications of cities such as second class.

So you would think that budget amendments are a straightforward analysis, but there are so many variables involved that it may not be as clear as you hoped.  If this is the case and you need some assistance with your evaluation, please send me an email tnelson@mrsc.org or call (206) 625-1300 and I’ll do my best to help you come to a conclusion.

The month of December tends to go by quickly, so review your remaining budget, anticipate open period expenditures, and amend if needed but remember to do so no later than the last day of the fiscal period (December 31st).


MRSC is a private nonprofit organization serving local governments in Washington State. Eligible government agencies in Washington State may use our free, one-on-one Ask MRSC service to get answers to legal, policy, or financial questions.

About Toni Nelson

Toni has over 24 years of experience with Local Government finance and budgeting. Toni's area of expertise include "Cash Basis" accounting and reporting, budgeting, audit prep and the financial issues impacting small local government.

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