Budget Process

Overview
The Town's budgets are adopted as required by the North Carolina General Statues. An annual budget is adopted for the General Fund, Special Revenue and the Enterprise Funds. Project ordinances are adopted for Capital Project funds and proprietary capital improvements. All budgets are prepared using the modified accrual basis of accounting.

Budgetary control is executed at the department level or by project. The Town Manager is authorized by the budget ordinance to transfer appropriations between functional areas within a fund without limitation and may transfer appropriations up to $50,000 between financial areas within a fund with an official reporting to the Board. During the year, several amendments to the original budget are necessary, the effects of which are not material.


Procedures
The Town's budget process begins in November, at which time the CIP materials and instructions are distributed to the departments. All departments receive their operating budget materials and instructions in February.

Department Directors are responsible for estimating departmental expenditures. The Finance Director will make the determination of the revenue projections. The budget reflects the service priorities of the Board and the Citizens of the Town of Wake Forest. The service needs of the community are determined by public hearings and feedback through the Mayor and the Board of Commissioners. After final service priorities have been established and agreed upon, a balanced funding plan is formulated. Through careful assessment of funding requirements and financing methods, a proposed budget document is organized into final format and submitted to the Board for their consideration and approval.

The Board reviews the proposed budget with the Town Manager and staff during the Town's work session. A copy of the proposed budget is also filed with the Town Clerk for public review and also on the Town's website. A public hearing is scheduled prior to the formal adoption of the budget. Adoption of the budget by the Board of Commissioners establishes the legal authority to incur expenditures in the ensuing fiscal year. All annual appropriations lapse at fiscal year-end.


Budget Calendar
A budget calendar is included in the North Carolina General Statutes which prescribes the last day on which certain steps of that budget procedure are to be performed. The following schedule lists the tasks to be performed and the date by which each is required to be completed.


November

  • Distribute CIP budget materials to the Department Directors.

  • CIP Public Hearing on capital needs held.

December

  • Complete and return CIP budget request to Finance Department.

  • Meet with Department Directors to review CIP budget requests.

February

  • Public Hearing to receive input on CIP budget.

  • Adoption of the CIP update.

  • Distribute budget packages to Department Directors.

  • Public Hearing to receive input on budget needs.

March

  • Complete and return budget request to Finance Department.

April

  • Meet with Department Directors to review budget requests.

  • April 30 – Each Department Director will transmit to the budget officer the budget requests and the revenue estimates for their department for the budget year.

April – May

  • Finalize proposed budget.

May

  • Present proposed budget to Board of Commissioners

  • Public Hearing on budget proposal.

June

  • Conduct budget work sessions with Board of Commissioners

  • Adopt Budget Ordinance

June 1 – The budget and the budget message shall be submitted to the governing board. The public hearing on the budget shall be scheduled at this time.

July 1 – The budget ordinance shall be adopted by the governing board.


Town of Wake Forest Budgeted Funds
The accounts of the Town are organized and operated on the basis of funds and account groups. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts comprised of assets, liabilities, fund equity, revenues, and expenditures or expenses as appropriate. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements. The account groups are not funds but are a reporting device used to account for certain assets and liabilities of the governmental funds that are not recorded directly in those funds.

The following fund categories, further divided by fund type are subject to appropriation:

  • Governmental Funds are used to account for governmental functions. Governmental funds include the following fund types:
    • General Fund - The General Fund is the general operating fund of the Town. The General Fund accounts for all financial resources except those that are required to be accounted for in another fund. The primary revenue sources are ad valorem taxes, state grants, and various other taxes and licenses. The primary expenditures are for public safety, street maintenance and construction, sanitation services, and general governmental functions.
    • Special Revenue Fund - The Special Revenue Fund accounts for specific revenue sources that are legally restricted to expenditures for specified purposes. The Town maintains three Special Revenue Funds, the Downtown Municipal Service District Fund, the Police Department Special Funds and the IDC Futures Fund.
  • Proprietary Funds include the following fund type:
    • Enterprise Funds - Enterprise Funds account for those operations (a) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that the periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The Town has one Enterprise Fund: the Electric Fund.

In accordance with North Carolina General Statutes, all funds of the Town are budgeted and maintained during the year using the modified accrual basis of accounting. The governmental fund types are presented in the financial statements on this same basis. Under the modified accrual basis, revenues are recognized in the accounting period when they become susceptible to accrual (i.e., when they are "measurable" and "available") to pay the liabilities of the current period. In addition, expenditures are recorded when the related fund liability is incurred, if measurable, except for unmatured principal and interest on general long-term debt, which is recognized when due, and certain compensated absences and claims and judgments, which are recognized when the obligations are expected to be liquidated with expendable available financial resources.

Proprietary funds are presented in the financial statements on the accrual basis of accounting. Under this basis, revenues are recognized in the accounting period when earned and expenses are recognized in the period they are incurred.