Financial budgeting is a planning tool that enhances local government accountability and service delivery, and sets out their legal expenditure authority. Legislation establishes requirements and deadlines for adoption of financial plans, and a local government may amend its plan during the year for unexpected expenditures.
Local governments must annually adopt a financial plan in accordance with the Local Government Act and the Community Charter. The planning period for the financial plan must include the current fiscal year and the next four fiscal years (five-year plan). At a minimum, the plan must include:
A local government must not budget for a deficit (planned expenditures and transfers to funds cannot exceed planned revenues, transfers from funds, and other cash contributions). However, if actual expenditures and net transfers from the previous year exceed that year's revenues and contributions, the resulting deficiency must be carried forward to the current year's financial plan as an expenditure.
Municipalities must adopt their financial plans before they adopt their annual tax rate bylaws (which must be adopted before May 15 each year). Regional districts must show their accounting for each service separately and must adopt their financial plans by March 31 of each year. The earlier date for regional districts is to provide them time to prepare their annual tax requisitions for their member municipalities and the Provincial Surveyor of Taxes.
Prior to adopting the financial plan a local government must undergo public consultation. The level of public consultation is not defined in legislation, and may include opportunities for citizens to review, comment and pose questions regarding the financial plan at a local government meeting.
Proposed expenditures for a local government may include the amounts required:
Proposed revenue sources may include:
Proposed transfers between funds may include the:
The financial plan establishes a local government's expense authority. Thus, a local government cannot make an expenditure that is not included in the financial plan. If an unexpected expenditure arises in the year, the financial plan must be amended prior to the expenditure taking place. This amendment requires the local government to undergo public consultation prior to adopting the amendments.
If an emergency expenditure arises that was not contemplated in the financial plan, a local government may make an expenditure for the emergency but must, as soon as practicable, amend the financial plan to include the expenditure and the funding source for the expenditure.
A local government should have established procedures to authorize emergency expenditure and provide a report for such an expenditure to the municipal council or regional district board at a regular meeting.
Contact your local government if you have questions or comments about the financial plan and budget.
Contact us if you have questions about local government financial budgeting.