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Appendix I: A Budget Analysis Checklist

When analyzing a jurisdiction's budget you should be alert for:

Revenues

  1. questionable projections in individual revenues for the upcoming fiscal year;

  2. the failure to collect a high enough proportion of property or other taxes because of abatements, exemptions, or lack of enforcement;

  3. user fees that are not covering the total cost of the services provided;

  4. general fund surpluses which should be carried over as revenue available for the next year;

  5. surpluses that have accumulated in self-sufficient or separate funds that should be included in or transferred to the general fund; and,

  6. the possibility of additional revenue from interest on investments.

Expenditures

  1. questionable projections in expenditure items for the upcoming fiscal year;

  2. monies appropriated in the current fiscal year that are unlikely to be spent;

  3. overestimates of wage costs because of turnover and attrition savings;

  4. contingency funds;

  5. capital improvements or purchases paid for out of current fiscal year revenues, rather than through longer-term financing;

  6. unexplained professional services or consulting expenses, especially as related to the contracting out of public services; and,

  7. transfers from the general fund to funds that should be self-sufficient.

The need to question priorities

While an analysis of revenues and expenditures frequently uncovers financial flexibility, a critical review of management's spending priorities may also be necessary.

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