A Look at the Budget Process

by Office of Management and Budget staff Catherine Fitzgerald, Heather Gala, Dan Hayes and Nicholas Pietrzak
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The Henrico County Board of Supervisors recently approved the County’s operating budget for the 2019-2020 fiscal year, but do you know the process involved in getting to that point?  The budget process, overseen by the Office of Management and Budget (OMB), takes almost a full year to develop and demonstrates a carefully thought out procedure. The first step in the process, estimating revenues that are expected for the next fiscal year, begins in August and helps develop a budget that is balanced among resources.

The budget moves to the department level in October when OMB develops target budgets for each county department.  This target budget provides funding for all current positions in the County and funding for operating and capital outlay items, which are based on the prior year approved budget.  In November, county departments receive the County Manager’s budget call which contains the budget policy, special budget instructions, various revisions to the budget manual, a budget calendar, and the target allocation. Departments then review and adjust their target allocations based on their expected spending for the upcoming fiscal year.  When expected expenditures exceed the target allocation, departments must submit a request for additional funding.  Each request for additional funding must be prioritized and prepared with detailed justification to support the need for additional funding.

Once budget submissions have been received, they are reviewed by OMB.  As a result of this review, a narrative for each department is created. Once these narratives are created, department requests are presented to the Executive Budget Review Committee. This Committee holds hearings in the last week of January through the first week of February to discuss budget submissions with departments.  The Executive Budget Review Committee consists of the County Manager, Deputy County Managers, Director of Finance, Director of Human Resources, one department director (on a rotating basis), and OMB staff. Representatives from each department are present at the time their budget is reviewed and they make presentations and answer questions relative to their budget requests. OMB finalizes recommendations based on the Executive Review Committee results and a balanced budget is recommended by the County Manager to the Board of Supervisors as the Proposed Budget in early March.

The Legislative Budget Review Committee is comprised of the County’s Board of Supervisors, who represent each of the County’s five magisterial districts. The purpose of the proposed budget is to present to the legislative body and the public a comprehensive picture of proposed operations for the budget year, expressed in both verbal and statistical terms. During the hearings, the Board of Supervisors examines all line items in each of the department’s budgets and all associated operational premises.  This gives departments the opportunity to be face to face with the Board of Supervisors, letting them know their accomplishments in support of County operations and services.

Once the Board of Supervisors has received the County Manager’s proposed budget, a date is set for the public hearing on the Budget (held in April).  The Code of Virginia requires that the County advertise a synopsis of the budget in the newspaper and that one or more public hearings be held before the Board adopts the budget. The Board of Supervisors adopts the Annual Fiscal Plan during April and sets tax levies for the Calendar Year.

Following adoption of the budget by the Board of Supervisors, the Annual Fiscal Plan is compiled, published, and distributed.  The budget adoption process concludes in June each year prior to the start of the new fiscal year when the Board of Supervisors appropriates funding for the Annual Fiscal Plan, as is required by the Code of Virginia.

The entire budget process is a huge collaborative effort that is continually fluid with checks and balances.  Every County employee performs some duty or service that impacts the budget and has investment in the budget process.  There are many opportunities for employees to be involved and learn more during the budget process.  If you are interested, ask your department about their process and how you can be involved.  Employees can also come to the public hearings to get a better overview of the budget for the entire County and all the budget documents are available online for review.  OMB works throughout the budget process to assist departments with their budget needs.  The intensive budget process, the OMB budget procedure and the work of each department are all responsible for giving Henrico County the positive reputation for being fiscally responsible.