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BUDGETARY CONTROL

The Town Manager serves as the Budget Officer, as mandated by state statute. Annual budget ordinances

are adopted each fiscal year and amended as required. The General Fund, Municipal Service District Fund

(MSD), Stormwater Fund, and Retirement Funds are on an annual budgetary basis. Capital Reserve Funds

are consolidated and reported in the General Fund as per GASB 54 as is the MSD Fund. All Capital Project

Funds operate on a multi-year budgetary basis. Multi-year budgets span more than one fiscal year and are

adopted and amended as required via project ordinances. Budgetary control is exercised at the

departmental level by the adoption of the budget by Town Council, and at the line item within each fund as

an internal best practice. All unencumbered budget appropriations, except Capital Reserve and Capital

Project Fund budgets, lapse at year-end.

The Budget Officer may designate a person(s) to carry out budgetary responsibilities. The Budget Officer

and/or designee must approve transfers within functions. The Budget Officer and/or designee may also

approve cross function transfers within the same fund. All transfers must comply with the Adopted Budget

Ordinance and the Town’s internal Budget Adjustment Policy. Budget amendments requiring additional

appropriations must receive Town Council approval in the form of a Budget Ordinance Amendment unless

the Annual Budget Ordinance authorizes otherwise. As required by North Carolina law, the Townmaintains

encumbrance accounts, which are considered to be “budgetary accounts.” Encumbrances outstanding at

year-end represent the estimated amounts of the expenditures ultimately to result if unperformed contracts

in process at year-end are completed. Encumbrances outstanding at year-end do not constitute

expenditures or liabilities because the commitments may be honored during the subsequent year (Purchase

Order Rollover).

Emergency Appropriat ions :

Upon a declaration by the Council that there exists a public emergency affecting life, health,

property, or the public peace, the Council may make emergency appropriations. If

unappropriated revenues are not available to meet such circumstances, the Council is

authorized to borrow enough funds to satisfy the emergency.

Balanced Budget :

According to North Carolina General Statute, local governments are required to present

and operate under an annual balanced budget ordinance. A budget ordinance is balanced

when the sum of estimated net revenues and appropriated fund balances is equal to

expenditure appropriations.