Item:
Title
Budget Ordinance Amendment No. 25BCC034 FY 2024-25 Encumbrance Rollover - Increasing Multiple Funds Budgeted Expenditures and Revenues by a total of $20,595,966.63
Body
Date of BOCC Meeting: October 28, 2024
Request for Board Action:
Agenda Text
The Board is requested to approve Budget Ordinance Amendment No 25BCC034 for FY 2024-25 amending the expenditure and revenue budgets for multiple funds by a total of $20,564,764.16 for the outstanding encumbrances at fiscal year-end FY 2023-24. Encumbrances outstanding at fiscal year-end represent obligations/commitments entered by the County for either services not yet completed or performed, or goods not yet received. This money must be restricted in the fund balance within the equity section of the balance sheet for FY 2023-24 to honor these obligations/commitments once completed and/or received. These encumbrances outstanding at year-end do not represent expenditures or liabilities. These encumbrances outstanding are included in the amount reported as “Restricted Stabilization by State Statute” in the fund balance section of the Balance Sheet in the Annual Comprehensive Financial Report (ACFR).
According to generally accepted accounting principles (GAAP), governmental type funds are the only funds to record encumbrances in the ACFR. However, during the fiscal year, the County maintains encumbrances (purchase orders and service contracts) for all fund types (governmental and proprietary) to ensure funds are set aside for obligations and commitments appropriately at the time that they are ordered and/or entered into.
Because these encumbrances lapse at year-end and are re-appropriated in the subsequent fiscal year, they do not affect unassigned fund balance. It is merely a re-appropriation in the subsequent fiscal year of funds for obligations and commitments for goods and services already ordered but not yet received in the prior fiscal year. Encumbering these funds is a statutory requirement.
Therefore, authorization is requested to amend the following funds’ budgets in FY 2024-25 to honor the outstanding purchase orders and service contracts as of the end of FY 2023-24:
General Fund (1001010000) $ 17,837,942.88
Risk Management Fund (1001020000) $ 130,649.94
Public Art Fund (1001050000) $ 4,000.00
Benefits Plan Fund (1001500000) $ 41,528.69
Stormwater Fund (5005500000) $ 718,159.49
Sewer Utility Fund (6006600000) $ 1,863,684.73
Total $ 20,595,966.63
Alignment with Strategic Plan: This request relates to the following elements of the Durham County DCO Forward 2029: Efficient, Effective Government
Resource Persons: Crystally Wright, Interim Chief Financial Officer; Keith Lane, Budget and Management Services Director
County Manager’s Recommendation: The County Manager recommends that the Board approve Budget Ordinance Amendment No. 24BCC034 FY 2024-25 Encumbrance Rollover - Increasing Multiple Funds Budgeted Expenditures and Revenues by a total of $20,564,764.16
Signature
County Manager: ____________________________