Quick Guide to the Council’s Budget Process
Here you will find a wide range of budget resources including a summary of the proposed FY 2016 Budget, the current spending plan, an explanation of the council’s budget review and adoption process, public hearing schedules and other important budget calendar dates, as well as links to press releases, event announcements and more.
We look forward to even greater citizen engagement and encourage you check back often for timely budget updates.
The Council's Budget Process can seem complex. We are pleased to provide you with this guide, designed to help clarify any questions you may have about the steps involved in putting together the county's spending plan, and the Council's role in the review and adoption of the FY 2016 Budget. Download the following for the Budget Overview of proposed document and the Budget Process:
Budgeting, accounting, reporting and auditing are basic elements of a comprehensive system of financial management. Each of these activities, although performed by separate organizational units of the County government, is nevertheless interrelated.Budgeting
Budgets, prepared by the County Executive with the assistance of the Office of Management and Budget (0MB), are approved by the County Council thereby instituting the fiscal plan for the delivery of public services, the acquisition of public facilities required for such purposes, and the administrative support required for management purposes. In the decision-making process, consideration is given to alternatives and priorities represented by the budget programs and items in order to reach specific objectives related to health, individual and community assistance, public safety, education, economic development, environmental conditions, recreation and effective and efficient management.
Accounting and Reporting
The planning effort represented in the current expense and capital budgets culminates with the adoption of the budgets and is succeeded by implementation of the programs approved and administrative control of funds. The budgetary control exercised by the Office of Management and Budget (0MB) in preparing the agency budgets continues as 0MB monitors the agencies budgets throughout the fiscal year. The Office of Finance also becomes directly involved in the accounting process that tracks financial data on assets, liabilities, revenues, expenditures and encumbrances producing monthly reports which can be reviewed by the agencies and 0MB. The Office of Finance along with 0MB also monitors the receipt of revenues identified in the budget to fund the various programs approved by the Council and the Executive.
In addition to the fiscal monitoring performed by the Office of Finance and 0MB, the County Auditor, appointed by the County Council, is responsible for preparing and submitting to the Council and the Executive a complete financial audit within 6 months after the close of the preceding fiscal year. The complete financial audit is contracted out to an independent certified public accounting firm. The County Auditor heads the Office of Audits and Investigations, which is a division of the Legislative Branch of government. In addition to the annual audit the Council or the Executive may order a special audit of any agency receiving or expending County funds. All records and files pertaining to County funds are at all times open to the inspection of the County Auditor. Working closely with and under the supervision of the Council Administrator, also appointed by the Council, the Auditor and the staff of the Office of Audits and Investigations prepare budget staff reports and assist in the Council’s annual budget review.
The organization of major financial management functions--budgeting, accounting and audits are provided for specifically in the Charter for Prince George’s County. Recognition is given to the importance of these major functions by the establishment of the Office of Management and Budget for formulation and evaluation of the operating and capital budget, the Office of Finance for accounting and reporting; and the Office of Audits and Investigations for internal audit. The Office of Management and Budget and the Office of Finance are established within the Executive Branch of the County government. The Office of Audits and Investigations, responsible for financial, performance and special audits, is a part of the Legislative Branch, and, thereby, maintains the independence essential to the conduct of audits.
Office of Management and Budget -- The Director of the Budget, reports to the County Executive through the Chief Administrative Officer, prepares the operating and capital budget, the capital improvement program, and advises upon request for County funds and upon revenue needs. In the execution phases of budgeting that is, the administration of budgets after adoption, the Director assists the County Executive in exercising control of staffing of agencies and equipment purchases.
Office of Finance -- The Director of Finance, reports to the County Executive through the Chief Administrative Officer, has three major areas of responsibility--accounting, finance and financial systems. In the accounting area, he maintains the system of accounts and prepares periodic financial reports. Coincident with accounting and reporting, he has responsibility for control of appropriations and for the prevention of expenditures, which may exceed an appropriation or is otherwise inappropriate. The Director is responsible for certifying that available funds exist when such certification may be required by law. Functions related to finance, include the collection and billing for all receipts, due the County; deposits, investments and custody of all funds; bond sales and debt management; and conduct of tax sales.
Responsibility for prescribing accounting systems may include systems development and installations, systems modification and systems monitoring to ensure that financial information is produced in accordance with desired objectives. The County presently uses a GEAC financial account system to maintain its system of accounts and control expenditures. The responsibility for maintaining this system rests with the Office of Finance.
Interrelationships -- The interrelationship between budgeting and accounting, even though separated organizationally, may be viewed as a continuous process with the planning process dominating budgets, and the accountability and informational elements dominating accounting. Through the audit process, safeguards are provided to ensure that operations are as approved or that corrective action is taken when necessary.
General Requirements pertaining to the Adoption of the Budget
According to Section 806 of the County Charter, the proposed operating expense budget shall contain: (1) a statement of all revenue estimated to be received by the County during the ensuing fiscal year; (2) a statement of debt service requirements for the ensuing fiscal year; (3) a statement of the estimated surplus if any, and any estimated deficit in any fund required to be made up in the ensuing fiscal year; (3.1) the proposed expenditures of the Legislative Branch as submitted by the Council; (4) an estimate of the expenditures which the County Executive deems necessary for conducting the business of the County to be financed from and not to exceed estimated revenue for the ensuing fiscal year; (5) a statement of the bonded and other indebtedness of the County government; (6) a statement of the proposed contingency reserves; (7) a comparative statement of the actual revenues and expenditures for the last completed fiscal year; the budgeted and estimated revenues and expenditures for the currently ending fiscal year; and the projected revenues and expenditures recommended by the Executive for the ensuing fiscal year; (8) forecast of goods and services that would necessitate competitive biddding for the ensuing fiscal year; and (9) any other material which the County Executive may deem advisable or the Council may require by resolution.
Concurrent with the submission of the proposed annual operating budget, the County Executive shall submit to the County Council a report of all exempt positions pursuant to Section 902(2), (3), (4), (5), (9), and (13) of the Charter. The report shall include the name of the incumbent and compensation for all such positions for the six-month period ending the prior March 1. A second report for the six-month period September 1 shall be submitted not later than September 15 of each year. A similar report shall be filed in the manner prescribed herein by the County Council for the Legislative Branch.
Two Types of County Budgets
There are generally two types of budgets, an annual operating budget and a capital budget. The capital budget refers to the first year of the Six (6) Year Capital Improvement Program. In Prince George’s County, terms used to describe these types of budgets are the Operating Budget and the Six Year Capital Improvement Program (CIP).
The Capital Budget/Capital Improvement Program and Operating Budget are submitted simultaneously as two separate documents by the Executive not later than March 15 each calendar year. The Council reviews both budgets according to the budget schedule shown on Exhibit I and simultaneously acts on both the Capital Budget and Operating Budget in one bill entitled the Annual Budget and Appropriation Ordinance. For the purpose of this handbook the Capital Budget/Capital Improvement Program and the Operating Budget will be discussed separately as the requirements differ for each budget. The rules and requirements pertaining to approval of the budget and adjustments made after adoption are discussed in turn.