Changes to Appropriations, Estimated Revenues, and Reserves

SUBJECT:

CHANGES TO APPROPRIATIONS, ESTIMATED REVENUES, AND RESERVES
NUMBER:

A.2.

DEPARTMENTS & DISTRICTS AFFECTED:

ALL AGENCIES, DEPARTMENTS, AND DISTRICTS GOVERNED BY THE BOARD OF SUPERVISORS
EFFECTIVE: 12/01
signed
_________________________________
David E. Sundstrom, Auditor-Controller
1. POLICY
1.1 Purpose

1.2 Authority

1.3 Definitions 
2. PROCEDURE
2.1 Budget Transfers

2.2 Appropriation of Unanticipated Financing

2.3 Budgeted and Unbudgeted Interfund Transfers

2.4 Appropriation of Reserve Cancellations/Decreases

2.5 Transfers of Appropriations Between General Fund Agencies 

2.6 Appropriation for Contingencies 

2.7 Increases to Reserves 
EXHIBITS
SUBJECT:

CHANGES TO APPROPRIATIONS, ESTIMATED REVENUES, AND RESERVES
NUMBER:

A.2.

DEPARTMENTS & DISTRICTS AFFECTED:

ALL AGENCIES, DEPARTMENTS, AND DISTRICTS GOVERNED BY THE BOARD OF SUPERVISORS
EFFECTIVE: 12/01
signed
_________________________________
David E. Sundstrom, Auditor-Controller
1. POLICY
The following states the County's policy pursuant to State law:
  • Any increases to appropriations and estimated revenues in the County budget must be submitted to the Board of Supervisors ("Board") and approved by a four-fifths vote of the Board.
  • Budget increases in one County fund/agency resulting from receipt of unbudgeted transfers of monies from another County fund/agency must also be approved by a four-fifths vote of the Board, and must be accompanied by a cash transfer from the transferring fund/agency to the receiving fund/agency.
  • Transfers of appropriations between fund/agencies in the County General Fund must be submitted to the Board and approved by a majority vote of the Board. Refer to County Accounting Procedure (CAP) No. A.1., Budget Transfers Within a Fund/Agency.
  • Transfers of appropriations within a fund/agency budget must be submitted to the Auditor-Controller for approval, with the exception of transfers from the salary and benefit account codes, which must also be approved by the County Executive Office (CEO). Refer to CAP No. A.1., Budget Transfers Within a Fund/Agency.
  • Any transfers from Contingency appropriations or from Fund Balance Reserve (Reserve) account codes (excluding the General Reserve, balance sheet reserves, and Reserve for Encumbrances - see Sections 2.7.3 and 2.7.4 below) must be submitted to the Board and approved by a four-fifths vote of the Board.
This policy and procedure applies only to those County funds governed by the County Budget Act, Government Code Sections 29000 through 29144. Funds governed by the County Budget Act include all those Board-governed County funds listed as being covered by appropriations control in the annual "Appropriations Control" letter sent out by the Auditor-Controller in April of each year.
1.1 Purpose
To ensure that changes to the County's budget are made in accordance with applicable State law and County policy.
1.2 Authority
1.2.1 State of California Government Code 
  • Section 25252
    Section 25252 allows the Board to establish and abolish funds as necessary for the transaction of the business of the County, and to transfer money from one fund to another, as the public interest requires. This section also allows the Board, by resolution, to authorize the County Auditor-Controller to perform these functions (also reference Section 1.2.2, Resolution No. 91-1143).
  • Section 29009
    Section 29009 requires that in the Proposed and Final County Budgets, the budgetary requirements shall equal the available financing. In other words, the budget for each fund must be balanced.
  • Section 29084
    Section 29084 allows the Board to establish in the budget an appropriation or appropriations for contingencies, by either one or a combination of the following methods:
    1. Setting aside an amount within a fund not to exceed 15 percent of the total appropriations from the respective fund, exclusive of the amount of the contingency appropriation.
    2. Setting aside an amount in a separate contingency fund, or in the County General Fund, not to exceed 15 percent of the total appropriations contained in the budget, exclusive of all appropriations for bonded debt service and all appropriations for contingencies. The total appropriations on which the 15 percent limitation is based must exclude the total appropriations for each fund having a contingency appropriation established under (a).
  • Section 29086
    Section 29086 requires that the General Reserve, which is Balance Sheet Account Code 9850 in the County's General Ledger, for any particular fund can only be established, cancelled, increased, or decreased at the time of adopting the Final County Budget.
  • Section 29125
    Section 29125 provides that the Board may make transfers and revisions with respect to the appropriations specified in the resolution of adoption of the budget, except with respect to transfers from the appropriation for contingencies (which are covered by Section 29130), by a majority action formally adopted by the Board. Section 29125 also allows the Board to designate a County official to approve transfers and revisions of appropriations within a budget unit, defined as a fund/agency in the County Budget (see Section 1.2.2, Resolution No. 97-415).
  • Section 29130
    Section 29130 requires that any increases in appropriations resulting from transfers from appropriations for contingencies, amounts made available from Reserve account codes, and any unanticipated increases in available financing (such as revenues received in excess of budgeted amounts), must be approved by a four-fifths vote of the Board
1.2.2 Board of Supervisors' Resolutions 
  • Resolution No. 97-415
    Adopted pursuant to Government Code Section 29125, Board Resolution No. 97-415, dated September 16, 1997, delegates to the Auditor-Controller the power and authority to make transfers and revisions of appropriations within a budget unit, with the exception of transfers of appropriations from salary and benefit account codes, which must receive CEO approval. A budget unit is a discrete fund/agency code in the County Budget.
  • Resolution No. 91-1143
    Adopted pursuant to Government Code Section 25252, Board Resolution No. 91-1143, dated October 1, 1991, authorizes the Auditor-Controller to establish and abolish funds/agencies, and to transfer money between funds/agencies in circumstances where both of the following conditions exist:
    1. The Board has authority over the funds; and
    2. The Board has provided for such transfers in the budget that is
      applicable to the period in which the transfers are to be made.
  • Resolution No. 91-260A
    Also adopted pursuant to Government Code Section 25252, Board Resolution No. 91-260A, dated March 19, 1991, authorizes the Auditor-Controller to transfer monies between various funds, as required in the Resolution of Issuance for each of the Mello-Roos Districts, the Trust Indentures for the Orange County Development Agency, and the Trust Indenture for each of the Certificate of Participation bond financing issues.
1.2.3 Accounting Standards and Procedures Manual 
The State Controller's Manual, Accounting Standards and Procedures for Counties, provides definitions and specific accounting treatment for budgetary changes.
1.3 Definitions
1.3.1 Agency
A separate budget unit within a fund that classifies a grouping of expenditure requirements into accounting or organizational units that are deemed necessary or desirable for financial and administrative control purposes. For example, the separate County departments within the County General Fund, Fund No. 100, are each budgeted in a separate agency code: Agency 003 for the Auditor-Controller, Agency 042 for the Health Care Agency, Agency 060 for the Sheriff-Coroner, etc.
1.3.2 Appropriation for Contingencies 
A budgetary provision representing a set-aside by the Board pursuant to Government Code Section 29084 to meet unforeseen expenditure requirements. An Appropriation for Contingencies is recorded in Expenditure Object Code (Object Code) 5200.
1.3.3 Appropriations
A legal authorization granted by the Board to make expenditures and to incur obligations for specific purposes, as provided for in the Board's annual adoption of the County Budget, and as changed thereafter by budget transfers and by changes to the Budget made by the Board. An appropriation is limited in amount and in the time it may be expended. Appropriations in the County Budget are controlled at the major object of expenditure, also called "category" of expenditure, which are:
  • Salaries and Employee Benefits (Object Codes 0100-0490).
  • Services and Supplies (Object Codes 0500-2890).
  • Other Charges (Object Codes 3000-3900).
  • Equipment (Object Code 4000).
  • Land, by Project (Object Code 4100, controlled by Organization Code)
  • Buildings and Improvements, by Project (Object Code 4200, controlled by Organization Code)
  • Other Financing Uses (Object Codes 4700-4809)
  • Residual Equity Transfers (Object Codes 5000-5009)
  • Contingencies (Object Code 5200)
  • Miscellaneous (Object Codes 5300-5500).
In addition, Operating Transfers Out (Object Codes 4800-4809) and Residual Equity Transfers Out (Object Codes 5000-5009) are unique as they are controlled by each Object Code rather than the object category.
1.3.4 Available Financing 
The sum of all sources of funding that can be utilized to meet the budget requirements for a fund for the fiscal year. Available financing consists of:
  • Fund balance available (FBA), plus
  • Estimated revenues, plus
  • Reserve cancellations or decreases, plus
  • Mid-year cancellations of prior year encumbrances.
The total budgeted available financing must equal the total budgeted financing requirements, which consist of appropriations plus increases to reserves.
1.3.5 Budget Transfers 
Transfers of appropriations or estimated revenues between different object codes or revenue source codes within a fund/agency. Refer to CAP No. A.1., Budget Transfers Within a Fund/Agency.
1.3.6 Encumbrances
Reserves against appropriations representing commitments made by the County to unperformed (executory) contracts (see Definition 1.3.11 below), purchase orders, and other obligations for receipt of goods and services. Encumbrances represent the estimated amount of expenditures ultimately to result if unperformed contracts and purchase orders in process are completed. Encumbrances are recorded when contracts and purchase orders are entered into, in order to ensure that sufficient appropriations will be available to pay vendors and contractors when the goods and services are actually received. Refer to CAP No. A.3., Encumbrances, for a detailed description of the encumbering process.
1.3.7 Estimated Revenues 
The budgeted financing sources, exclusive of FBA and reserve cancellations, expected to be received or accrued during the fiscal year to finance the budgeted appropriations.
1.3.8 Fund
A separate fiscal and accounting entity with a self-balancing set of accounts in which cash and other financial resources, all related liabilities and equities or fund balances, and changes to those accounts, are recorded and segregated to carry on specific activities. Separate funds are normally established only when required by the State Constitution, State statute, Federal law, court order, other applicable laws, Federal or State regulations, or Board policy. For example, the County General Fund, Fund 100, is a fund comprised of a number of subsidiary agencies, or departments. Other examples of separate County funds are the Road Fund No. 115, the Orange County Library Fund No. 120, and the Orange County Flood Control District Fund No. 400.
1.3.9 Fund Balance Available (FBA) 
The unreserved, undesignated, unencumbered year-end carryover amount remaining in a fund that can be utilized as a financing source for the following year's budgeted appropriations. The fiscal year-end FBA carried over into the next budget year is generally equal to:
FBA from the beginning of the year
Plus: Revenues received and accrued during the year
Reserve cancellations
Encumbrance cancellations (current and prior year)
Less: Expenditures paid and accrued during the year
Encumbrances entered into during the year
Reserves increased or added during the year.
1.3.10 Reserve
An amount set aside in a fund for a specific purpose. A reserve is not available for financing budget requirements, and can only be made available for appropriation by a specific action of the Board by four-fifths vote, pursuant to Government Code Section 29130.
1.3.11 Reserve
An amount set aside in a fund for a specific purpose. A reserve is not available for financing budget requirements, and can only be made available for appropriation by a specific action of the Board by four-fifths vote, pursuant to Government Code Section 29130.
1.3.12 Unperformed (Executory) Contracts 
A contract that has not yet been fully completed or performed, or a contract, the obligation (performance) of which relates to the future.
2. PROCEDURE
2.1 Budget Transfers 
Budget transfers of appropriations within a fund/agency (i.e., within a distinct budget unit or department/agency) must be submitted to the Auditor-Controller on an Expense Budget Transfer Form (refer to Exhibit I). If a transfer is being made from any of the Salaries and Employee Benefits objects to any other expenditure category, the Expense Budget Transfer Form must be submitted to the CEO first for approval. Budget transfers of estimated revenues within a fund/agency must be submitted to the Auditor-Controller on a Revenue Budget Transfer Form (refer to Exhibit II).

Transfers of appropriations between agencies or from the Appropriation for Contingencies cannot be processed on an Expense Budget Transfer Form, and transfers of estimated revenues between agencies cannot be processed on the Revenue Budget Transfer Form.

Refer to CAP No. A.1., Budget Transfers Within a Fund/Agency, for more detail on completing and submitting the Expense Budget Transfer Form (Exhibit I) and the Revenue Budget Transfer Form (Exhibit II).
2.2 Appropriation of Unanticipated Financing 
2.2.1 Appropriation of Unanticipated Revenue 
If during the fiscal year a particular program or department/agency receives revenues in excess of its budgeted revenues, and if the department/agency desires to expend the excess revenues, and has no other appropriations available, then, with CEO approval the department/agency must either submit an Agenda Item Transmittal (AIT) Form (refer to Exhibit III) to the Clerk of the Board, requesting that the Board appropriate the unanticipated revenues, or submit the request to the CEO for inclusion in a Quarterly Budget Report. Unless there is an urgent need for the additional appropriations, these types of budget changes should generally be included in a CEO Quarterly Budget Report to the Board. At a minimum, the AIT, or request to the CEO, should contain the following information (in addition to the standard information required for an AIT):
  • A complete description of the unanticipated revenue source and the particular program or project which it is funding.
  • An explanation as to why the revenues are being received in excess of the budgeted estimate, and that no other appropriations are available to fund the new budgetary requirement.
  • Recommended Actions directing the Auditor-Controller to increase the estimated revenue in the appropriate revenue source codes and to increase the appropriations in the appropriate object codes, in accordance with Government Code Section 29130 with the following conditions:
    • The revenue source codes and object codes must be identified, including: Fund-Agency-Revenue Source and Sub-Revenue Code, Object Code, Activity and, if required, Organization Code.
    • Increases to appropriations in the Land Account (Object Code 4100) and the Buildings and Improvements Account (Object Code 4200) must also specify the Organization Code for the particular capital project.
    • The total of the recommended estimated revenue increases must always equal the total of the recommended appropriations increases.
    • The Recommended Actions must include language stating that Government Code Section 29130 requires a four-fifths vote of the Board.
    Whenever possible, actions to appropriate unanticipated revenue should be included in one of the CEO's regular Quarterly Budget Reports to the Board.
2.2.2 Budget Changes Due to Actual Fund Balance Available in Excess of or Less Than Budget 
The County's Final Budget is adopted each year at the end of June utilizing estimated FBAs for each County fund, because the actual FBAs will not be known until all year-end accruals are made and the books close in early August. In November each year, the CEO files the First Quarter Budget Report with the Board, which, among other budgetary actions, contains all budgetary changes necessary to balance all County funds to their FBAs. Before the First Quarter Budget Report is filed, the CEO contacts all departments which control funds outside the County General Fund (excluding Enterprise Funds and Internal Service Funds) to determine which expenditure, estimated revenue, or reserve account codes will be used to balance the financing requirements for each fund to actual FBA and final estimated revenues.

The Recommended Actions in the First Quarter Budget Report directing the Auditor-Controller to increase or decrease appropriations, estimated revenue, and/or reserve account codes to balance to final FBA must include the following information:
  • The Object Codes, Revenue Source and Sub-Revenue source codes, as well as required Organization and Activity codes, and/or Reserve account codes with appropriate Reporting Category code, must be identified.
  • Increases or decreases to appropriations in the Land Account (Object Code 4100) and the Buildings and Improvements Account (Object Code 4200) must also specify the Organization Code for the particular capital project.
  • The total of the recommended appropriations/estimated revenue/reserve increases or decreases for each fund must equal the total increase or decrease in FBA.
  • A statement that the appropriation increases and reserve increases must be approved by a four-fifths vote of the Board as required by Government Code Section 29130.
2.3 Budgeted and Unbudgeted Interfund Transfers 
2.3.1 Budgeted Interfund Transfers 
Budgeted interfund transfers may be processed at any time during the fiscal year, either by journal voucher or by a memo authorizing the Auditor-Controller to process a journal voucher to make the transfer. Appropriations for transfers between funds that are included in the County's Final Budget are shown in the Operating Transfers Out accounts (Object Codes 4800-4809) and the Residual Equity Transfers Out accounts (Object Codes 5000-5009) in each appropriate fund. Each fund receiving a transfer contains an equal amount of estimated revenue in the Operating Transfers In accounts (Revenue Source Codes 7810-7819) and Residual Equity Transfers In accounts (Revenue Source Codes 7900-7909).
2.3.2 Unbudgeted Interfund Transfers 
The Board must approve interfund transfers not contained in the Budget, and any increases to budgeted interfund transfers in excess of the amounts contained in the Budget. The department responsible for the fund/agency that will be making the unbudgeted interfund transfer must submit an AIT to the Board, or a request to the CEO for inclusion in a Quarterly Budget Report, containing, in addition to the standard AIT requirements, the following information:
  • An explanation of the necessity for the unbudgeted interfund transfer, or transfer in excess of the budgeted amount, including the purpose for which the transferred funds will be expended.
  • Recommended Actions to direct the Auditor-Controller to make the following budgetary and transfer entries:
    • Decrease appropriations by the required amount in another specific object code of the transferring fund, and increase appropriations by the same amount in the appropriate Interfund Transfers Out or Residual Equity Transfers Out account code in the transferring fund. (This action provides the necessary appropriations to make the interfund transfer from the transferring fund.)
    • Make an Operating Transfer or Residual Equity Transfer, as appropriate, of cash from the transferring fund to the receiving fund, specifying the Transfer Out account code to be used in the transferring fund and the Transfer In account code to be used in the receiving fund. (This action actually move the funds, in cash, from the transferring fund to the receiving fund and records the corresponding expenditure in the transferring fund and revenue in the receiving fund.)
    • Increase estimated revenues in the appropriate Operating Transfer In or Residual Equity Transfer In account code in the receiving fund, and increase appropriations in an equal amount in whatever object codes are required to be increased in the receiving fund. (This action appropriates the unbudgeted Transfer In revenue in the receiving fund so that it can be expended.)
    • All of the account codes in the Recommended Actions Section of the AIT must be specified as to Fund, Agency, Object and Revenue Source and Sub-Revenue Codes, plus required Organization and Activity codes.
    • The appropriate 2-digit Sub-Object and Sub-Revenue Source Codes must be specified for the Transfer In and Transfer Out account codes (refer to the County of Orange Chart of Accounts Manual for details on coding Operating Transfers and Residual Equity Transfers).
    • The budgetary entries in the transferring and receiving funds must balance and the Transfers Out must equal the Transfers In.
  • A statement that the appropriations and estimated revenue increases must be approved by a four-fifths vote of the Board as required by Government Code Section 29130.
Whenever possible, unbudgeted interfund transfer actions should be included in one of the CEO's regular Quarterly Budget Reports to the Board.
2.3.3 Restrictions on Appropriation Transfers Between Funds 
Government Code Sections 29130, 29125, and 29009 require that the transfer of appropriations from one County fund to another must be approved by the Board as described in Section 2.3.2 above. Appropriations may not be transferred between funds without Board approval for the following reasons:
  • A simple transfer of appropriations from one fund to another fund without the required interfund transfer does not provide a source of revenue or other financing to support the additional appropriations in the receiving fund.
  • A transfer of appropriations without the required interfund cash transfer leaves the receiving fund with no cash to make the necessary expenditures and results in a cash deficit in the receiving fund.
2.4 Appropriation of Reserve Cancellations/Decreases 
2.4.1 Budgeted Reserve Cancellations/Decreases 
Generally, cancellations or decreases of amounts in fund balance reserve account codes should only be requested as part of the budget process. The budgeted cancellation or decrease of an amount in a reserve account code provides additional financing for the appropriation requirements of the fund in which the reserve is cancelled or decreased. The Auditor-Controller records budgeted reserve cancellations and decreases in the budget/accounting system after the Board adopts the Final Budget.
2.4.2 Unbudgeted Reserve Cancellations/Decreases 
Except for the General Reserve, Balance Sheet Account Code 9850, (see Section 2.4.3 below), in order to cancel or decrease a fund balance reserve mid-year, an AIT must be filed with the Board containing the following information (in addition to the standard AIT requirements):
  • A description of the reserve account code being cancelled or decreased, and the purpose for which the reserve was originally established.
  • An explanation of the necessity for making the reserve available for appropriation mid-year.
  • A description of the purpose for which the cancelled or decreased reserves will be used.
  • Recommended Actions to direct the Auditor-Controller to decrease or cancel the reserve account code by a specific amount, to increase FBA by the same amount, and to appropriate the increased financing in specific object codes, in accordance with Government Code Section 29130, with the following conditions:
    • The reserve account codes to be cancelled or decreased must be identified by Fund-Agency-Balance Sheet Account-Reporting Category, and the increased appropriations must be identified by Fund-Agency-Object Code, plus required Organization and Activity Codes.
    • The total of the increased appropriations in the object codes must equal the total of the reserve cancellations and decreases.
  • A statement that the appropriation increases must be approved by a four-fifths vote of the Board as required by Government Code Section 29130.
Whenever possible, unbudgeted reserve cancellation/decrease actions should be included in one of the CEO's regular Quarterly Budget Reports to the Board.
2.4.3 General Reserve Cancellations/Decreases 
As provided in Government Code Section 29086, the General Reserve of each County fund, Balance Sheet Account Code 9850, can only be cancelled or decreased at the time of the adoption of the Final County Budget (except in the case of a legally declared emergency). Therefore, no mid-year changes are allowed to the General Reserve Account code of any County fund.
2.5 Transfers of Appropriations Between General Fund Agencies 
2.5.1 Prior Approval by CEO 
Requests for transfers of appropriations between agencies in the General Fund must be approved by the CEO before submission to the Board for approval. Transfers of appropriations between General Fund agencies will be approved by the CEO only if there are no unanticipated revenues or other sources of financing or other available appropriations in the requesting department's/agency's budget to fund the required appropriations.
2.5.2 Approval by Board 
Once approval is obtained from the CEO, the department/agency must prepare an AIT for submittal to the Board, containing, in addition to the standard AIT requirements, the following:
  • A detailed description of the reason for the budget overrun being addressed by the transfer of appropriations from another agency.
  • An explanation that there are no unanticipated sources of financing to fund the required appropriation, and that there are no other available appropriations in the applicable agency to fund the budget overrun.
  • An explanation of why appropriations are available in the transferring agency, why the appropriations can be made available to the receiving agency, and why the transfer will not adversely impact the transferring agency's budget.
  • Recommended Actions directing the Auditor-Controller to decrease appropriations in the agency which is transferring appropriations, and to increase appropriations in the agency which is receiving the appropriations with the following conditions:
    • The object codes must be identified by Fund-Agency-Object Code, plus required Organization and Activity codes.
    • The total of the amounts of the increased appropriations must equal the total of the amounts of the decreased appropriations.
    Whenever possible, transfers of appropriations between General Fund agencies should be included in one of the CEO's regular Quarterly Budget Reports to the Board.

    Appropriations cannot be transferred from an agency within the General Fund to another County fund, unless approved by the Board as an unbudgeted interfund transfer as described in Section 2.3.2 above.
2.5.3 Transfers of Estimated Revenues Between General Fund Agencies 
If for some reason there is a need to transfer budgeted estimated revenue amounts between agencies within the General Fund, for example, because responsibility for a particular revenue source is moved from one County agency to another due to a change in State law or regulation, the same procedures as specified in Sections 2.5.1 and 2.5.2 above should be followed. The specific Revenue Source and Sub-Revenue Source codings and amounts must be detailed, and the decreases in the transferring agency's estimated revenues must equal the increases in the transferee agency's estimated revenues. An explanation as to the reason for the estimated revenue transfer must be included on the AIT. Any associated appropriation transfers must also be included with the information specified in Section 2.5.2.

Whenever possible, transfers of estimated revenues between General Fund agencies should be included in one of the CEO's regular Quarterly Budget Reports to the Board.

Estimated revenues cannot be transferred from an agency within the General Fund to another County fund, unless approved by the Board as part of an unbudgeted interfund transfer as described in Section 2.3.2 above.
2.6 Appropriation for Contingencies 
2.6.1 General Fund Appropriation for Contingencies 
2.6.1.1 Prior Approval by CEO 
All requests for a transfer of appropriations from the General Fund Appropriation for Contingencies (Object Code 5200) must receive prior approval from the CEO before being submitted to the Board. Transfers of appropriations from the General Fund Appropriation for Contingencies are only approved by the CEO as a last resort, and only if the requesting department:
  • Has no other unanticipated sources of financing to appropriate, and
  • Has no other appropriations within its own budget to cover the budget overrun, and
  • Has no appropriations available in another agency within the General Fund that it controls, to cover the budget overrun.
2.6.1.2 Approval by Board 
After approval has been obtained from the CEO, the transfer from the General Fund Appropriation for Contingencies must be submitted to the Board on an AIT containing, in addition to the standard AIT requirements, the following:
  • A description of the budgetary requirement causing the need for a transfer from the Appropriation for Contingencies.
  • A detailed explanation of why other appropriations are not available to fund the budgetary requirement.
  • A statement that no sources of financing in excess of budget are available to be appropriated to meet the budgetary requirement.
  • A statement that no available appropriations in any other agency within the General Fund controlled by the department are available to fund the budget overrun.
  • Recommended Actions to direct the Auditor-Controller to decrease appropriations in General Fund Appropriation for Contingencies Account, Fund 100-Agency 099-Object Code 5200, and to increase appropriations in the appropriate agency object codes, in accordance with Government Code Section 29130 with the following conditions:
    • The object codes to be increased must be identified by Fund 100 -Agency Number-Object Code, with required Organization and Activity codes.
    • The total amount transferred from Contingency must equal the total of the increased appropriations in the specific object codes being increased.
    • The Recommended Actions must include language stating that Government Code Section 29130 requires a four-fifths vote of the Board.
    Whenever possible, transfers of appropriations from the General Fund Appropriation for Contingencies should be included in one of the CEO's regular Quarterly Budget Reports to the Board.

    General Fund Contingency Appropriations cannot be transferred to a fund outside the General Fund unless approved by the Board as an unbudgeted interfund transfer as described in Section 2.3.2 above.
2.6.2 Other Fund Contingencies 
Transfers from the Appropriation for Contingencies, Object Code 5200, within any other County fund must also be submitted to the Board on an AIT and approved by a four-fifths vote, pursuant to Government Code Section 29130. The same information noted above in Section 2.6.1.2 for General Fund Contingency transfers must be contained on the AIT, except that the fund and agency codes will be the appropriate codes for the particular fund/agency for which the contingency transfer is being requested.

Whenever possible, transfers of appropriations from a fund's Appropriation for Contingencies should be included in one of the CEO's regular Quarterly Budget Reports to the Board.

An Appropriation for Contingencies in each County fund may only be utilized within that fund. It cannot be transferred to any other County fund.
2.7 Increases to Reserves 
2.7.1 Budgeted Reserve Increases 
Increases to reserves of fund balance are normally provided for in the annual County Budget at the request of the department/agency responsible for the fund in which a reserve is being increased. Increases to reserves should be included in the budget submittal to the CEO. The reserve increase must include the description and the Reporting Category number of the specific reserve being increased. After the Board adopts the Final Budget, the Auditor-Controller books the reserve increases into the appropriate General Ledger fund balance reserve account codes.
2.7.2 Unbudgeted Reserve Increases 
Mid-year requests for increases to reserves must be pre-approved by the CEO, and should be included in one of the CEO's Quarterly Budget Reports to the Board, for specific approval by the Board. There must be a source of financing for the reserve increase, which can be:
  • Unanticipated revenues in excess of budgeted amounts.
  • Reduction to an expenditure appropriation.
Actions to increase reserves must include the following information:
  • Reasons for the increase to the reserve and the planned uses for the
    reserve.
  • Description of the sources of financing for the reserve increase.
  • Recommended Actions directing the Auditor-Controller to:
    • Decrease specific Object Code appropriations by specified amounts, or increase specified Estimated Revenue Source and Sub-Revenue account codes by specified amounts. The required Organization and Activity codes must also be specified.
    • Increase specific Fund Balance Reserve account codes by specified amounts, identified by description, Balance Sheet Account Code, and Reporting Category Number.
    • The total of the amounts of decreased appropriations and/or increased estimated revenues must equal the total of reserve increases.
2.7.3 General Reserve 
As provided in Government Code Section 29086, the General Reserve of each County fund, Balance Sheet Account Code 9850, can only be established or increased at the time of the adoption of the Final County Budget. Therefore, no mid-year changes are allowed to the General Reserve of any County fund
2.7.4 Balance Sheet Reserves 
Reserves of fund balance are established to offset balance sheet account codes that represent assets not available to be appropriated and spent by a fund. For example, a fund that has loaned cash to another fund or to a third party on a long-term basis (longer than one fiscal year) must establish a reserve of fund balance to prevent that amount of cash from being appropriated and spent for another purpose. Examples of fund balance reserves to offset balance sheet account codes are:
  • Fund Balance Reserved for Debt Service (Balance Sheet Account
    Code 9814).
  • Fund Balance Reserved for Loans (Balance Sheet Account Code 9816).
  • Fund Balance Reserved for Prepaid Costs/Expenses (Balance Sheet
    Account Code 9818).
  • Fund Balance Reserved for Inventory of Materials and Supplies (Balance
    Sheet Account Code 9819).
  • Fund Balance Reserved for Land and Improvements Held for
    Resale (Balance Sheet Account Code 9823).
  • Fund Balance Reserved for Imprest Cash Funds (Balance Sheet
    Account Code 9829).
  • Fund Balance Reserved for Encumbrances (Balance Sheet Account
    Code 9900).
Refer to the County's Chart of Accounts Manual for further information and requirements on balance sheet account reserves.

These reserves are automatically booked each year by the Auditor-Controller to match the balances of the associated balance sheet account codes. No department/agency or Board action is required to change these reserve balances.
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