2001-2 Budget Requirements
January 12, 2001
TO: Counties, Cities, Villages, Townships, Authorities, and Other Municipal Agencies
FROM: Richard L. Baldermann, Administrator Local Audit and Finance Division
SUBJECT: Budget Requirements
Public Act 493 of 2000 amended certain budgeting related sections of the Uniform
Budgeting and Accounting Act and were given immediate effect. The
1. Clarified the definition of an authority or other organization subject to
budgetary requirements and added public school academies to the definition;
2. Remove the fiscal officer definition and references thereto since the
chief administrative officer already has the responsibilities in the Act;
Remove debt service funds as funds that need a budget; and
4. Remove capital
budgeting and informational summaries from the requirements for the recommended
budget since the next section of the act does not require the information to be
in the final budget document.
Section 2d(4) of the Act (MCL 141.422d) defines a "local unit" that is
required to comply with the budget requirements as follows:
As used in sections 14 to 20a, "local unit" means any of the following:
(a) A village
(b) A city
(c) A school district
intermediate school district(e) A public school academy established under part
6a of the revised school code, PA
451 of 1976, MCL 380.501 to 380.507
(f) A township
(g) A county
(h) A county road commission
(i) An authority or organization of
government established by law that may expend funds of the authority or
organizationAuthorities or organizations of government established
by law would include:
a) Authorities or organizations of government
established by act of the legislature; and
b) Authorities or
organizations of government formed by a local unit or local units under the
Cooperation Act of 1967 (MCL 124.501 et al) or other shared
Section 2a(4) of the Act defines a "budget" as:
. . . a plan of financial operation for a given period of time, including
an estimate of all proposed expenditures from the funds of a local unit and the
proposed means of financing the expenditures. Budget does not include any of the
(a) A fund for which the local unit acts as a trustee or agent.
internal service fund.
(c) An enterprise fund.
(d) A capital project
(e) A debt service fund.Section 16(1) of the Act requires
a general appropriations act:
. . . for all funds except trust or agency, internal service, enterprise,
debt service or capital project funds for which the legislative body may pass a
special appropriation act.Therefore, a budget and general appropriations
act are required for the general fund and each special revenue fund.
Section 15 of the Act (MCL 141.436) requires that the recommended budget
include at least the following:
(a) Expenditure data for the most recently completed fiscal year and
estimated expenditures for the current fiscal year. The recommended budget for the general fund and
special revenue funds must include for each fund:
(b) An estimate of the
expenditure amounts required to conduct, in the ensuing fiscal year, the
government of the local unit, including its budgetary centers.
data for the most recently completed fiscal year and estimated revenues for the
current fiscal year.
(d) An estimate of the revenues, by source of revenue,
to be raised or received by the local unit in the ensuing fiscal year.
The amount of surplus or deficit that has accumulated from prior fiscal years,
together with an estimate of the amount of surplus or deficit expected in the
current fiscal year. The inclusion of the amount of an authorized debt
obligation to fund a deficit shall be sufficient to satisfy the requirement of
funding the amount of a deficit estimated under this subdivision.
estimate of the amounts needed for deficiency, contingent, or emergency
(g) Other data relating to fiscal conditions that the chief
administrative officer considers to be useful in considering the financial needs
of the local unit.
· Actual expenditures for the most recently
completed fiscal year;
· Estimated expenditures for
the current fiscal year (to be arrived at by using actual expenditures to date
and estimating expenditures to the end of the fiscal year);
· An estimate of the expenditures in the next fiscal year;
· Actual revenue for the most recently completed
· Estimated revenue for the current
fiscal year (to be arrived at by using actual revenue to date and estimating
revenue to the end of the fiscal year);
estimate of the revenue in the next fiscal year;
Beginning and ending fund balance for each year;
The Department of Treasury will amend the Uniform Budget Manual during this
If you have questions or need further assistance, please call (517) 373-3227
or write our office: Michigan Department of Treasury, Local Audit and Finance
Division, P.O. Box 30728, Lansing, Michigan 48909-8228.