Appendix I: A Budget Analysis Checklist
When analyzing a jurisdiction's budget you should be alert for:
Revenues
- questionable projections in individual revenues for the upcoming fiscal year;
- the failure to collect a high enough proportion of property or other taxes because of abatements, exemptions, or lack of enforcement;
- user fees that are not covering the total cost of the services provided;
- general fund surpluses which should be carried over as revenue available for the next year;
- surpluses that have accumulated in self-sufficient or separate funds that should be included in or transferred to the general fund; and,
- the possibility of additional revenue from interest on investments.
Expenditures
- questionable projections in expenditure items for the upcoming fiscal year;
- monies appropriated in the current fiscal year that are unlikely to be spent;
- overestimates of wage costs because of turnover and attrition savings;
- contingency funds;
- capital improvements or purchases paid for out of current fiscal year revenues, rather than through longer-term financing;
- unexplained professional services or consulting expenses, especially as related to the contracting out of public services; and,
- 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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