Monday, May 22, 2017

Could this be Templeton??

Finance Committee Policy on One‐Time Revenues: 
It is the primary goal of the Dartmouth Finance Committee to ensure that budgets are fiscally responsible and sustainable; unfortunately, the recent trend has been toward a growing budget gap.  A 2007Massachusetts Department of Revenue audit of the town’s finances pointed to a number of root causes which we seek to address in order to move toward a sustainable long‐term financial outlook for the community. The largest problem area has been the trend of increasing reliance on one‐time revenues to pay for recurrent operating budgets.  These onetime revenues have included transfers from the stabilization fund, transfers from enterprise funds, sales of assets, special state “pothole” appropriations and department turn‐backs (unexpended money) from prior operating budgets.   When these one‐time sources of revenue were applied to recurring operating budgets, budgets increased beyond the amount of recurring revenue.  This required that leaner budgets be adopted, which in turn reduced the size of the turn backs.  The effect snowballed until the gap was critical.    The practice has also placed Dartmouth in a situation where our cash reserves are dangerously low.  Any unexpected expense could not be absorbed without borrowing.  A responsible cash reserve in the stabilization fund also improves the town’s ability to borrow money at favorable rates and allows it to self‐insure for a number of unexpected occurrences—allowing it to carry higher insurance deductibles and consequently lower insurance premiums. To stabilize the budget, the Finance Committee unanimously recommends the following policies: 1. One‐time revenues should only be applied to: Capital improvements, property acquisitions, contributions to the stabilization fund and single year casualties. 2. Budgets established in the spring town meeting should be considered to be “fully funded.”  As a general rule, there should be no supplemental appropriations to departmental operating budgets in the fall town meeting. 3. Departmental turn‐backs available in the fall town meeting should be deposited in the stabilization fund or applied to single year payments of capital improvements.  These purchases should not take on debt schedules that require future appropriations beyond what can be funded from the recurring revenue stream.   It is in nobody’s interest to grow budgets at an unsustainable rate—as we have seen, failure to maintain this financial discipline will quickly lead to painful decisions.  Even by adhering to these recommendations, the rate of increase in some expense categories will place strains on future budgets; but Dartmouth will be in a better position to meet these challenges if it maintains a disciplined approach to the budget process.

posted by Jeff Bennett
As excerpted from the Accountant’s Manual:
 Published by the Massachusetts Municipal Auditor’ and Accountants’ Association.
Below is a summary of the duties of the accountant/auditor:
 Verify that every expense payment is lawful and justified and that funding exists under the appropriate budget line item (MGL c. 41, §52).
 Maintain municipal books, including a general journal, general ledger, and subsidiary ledgers (MGL c. 41 §57).  Maintain detailed records of all debt (MGL c. 41 §57).
 Retain custody of all contracts and surety bonds (MGL c. 41 §57).
 At the close of the fiscal year, receive from each department, board, or committee a list of bills remaining unpaid (MGL c. 41 §58).
 Certify in advance the availability of an appropriation for any construction contract in excess of $2,000 (MGL c. 44 §31C).
 Certify to the assessor’s expenditures, approved in advance, expenses in excess of available appropriations for snow and ice removal (MGL c. 44 §31D).
 At least monthly, prepare reports for officers and department heads that show total appropriations, expenditures, and balances in each appropriation (MGL c. 41 §58).
 Provide notification when an appropriation has been expended or appears likely to become overdrawn (MGL c. 41 §58).
 Furnish the assessors with a written report detailing money received for the preceding fiscal year from sources other than taxes, loans, and trust funds (MGL c. 41 §54A).
 By May 1 each year, notify the assessor in writing of the amount of debt falling due in the next fiscal year and the provisions made to meet debt requirements (MGL c. 44 §16).
 Immediately upon the close of the calendar year, prepare statements detailing the preceding year’s appropriations and expenditures; appropriations for the current fiscal year; expenditures incurred during the first six months; estimated expenditures for the second six months; and estimates for the ensuing fiscal year (MGL c. 41 §60).
 Make an annual report that provides the receipts and expenditures for the past fiscal year from all funds; shows the specific appropriation amounts, expenditures and purposes; states any change in municipal debt; and lists indebtedness incurred and unpaid at the end of the fiscal year (MGL c. 41 §61).
Annually prepare and furnish to the DLS Director of Accounts a 1) Schedule A, 2) statement of public debt, and 3) Balance Sheet (MGL c. 44, §43)

posted by Jeff Bennett