Written by: Curtis L. Coonrod, CPA
If you are starting to think about your 2023 budget, you might like to know a way to get a little more money.
The Department of Local Government Finance provides Form 4b, which allows you to calculate the funds available for the coming year.
One item you must take into account is the current year’s unspent appropriations (Line 2 of Form 4b in the current Gateway layout).
That makes sense. Usually, if the money is appropriated to be spent this year, you should not use it for next year’s budget.
However, most years, your local unit does not actually expend its full budget. Now that we are halfway through the 2022 budget year, you may know of items in the 2022 budget that you are certain your unit will not actually expend or encumber.
For example, if your local unit had a vacancy in a job position, the personal services appropriation for 2022 for that position will not be fully expended, even if the vacancy is filled part-way through the year.
A mayor, trustee, or other executive authority can put in writing that certain 2022 appropriations will not be expended. Ideally, for a township, a board resolution should be obtained to confirm it. For a city, town, or county, a council resolution is required. If this paperwork is provided to DLGF, they will usually allow a lower amount on Form 4b for unspent appropriations (Line 2 of Form 4b in the current Gateway layout). That will result in a higher amount available for next year (Line 1 of Form 4b in the current Gateway layout).
If for any reason, DLGF denies the adjustment, they may cut your 2023 appropriations by that amount, but don’t worry. The unspent funds will be in the fund balance in January, and they can be appropriated next year by board resolution or council ordinance.
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This article is intended to provide information of general interest to local government officials in Indiana. The information is not guaranteed to be applicable or appropriate in particular circumstances. Local officials should consult competent professionals before acting on any information contained in this article. We are not attorneys. The advice of a legal nature should be sought only from qualified attorneys.
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