Budget Checks Guidelines

These guidelines are primarily to assist Finance budget analysts in reviewing and processing various budget documents received from departments.  Portions of these guidelines may also be helpful to departments.

Finance staff are responsible for reviewing the following documents:

  1. Planning Estimate Worksheets (including back-up calculations)
  2. Schedule 10s (three years)
  3. Schedule 10Rs
  4. Fund Condition Statement Turnaround Document
  5. Supplementary Schedules: 
    1. Operating Expenses (DF Form 300)
    2. Federal Funds/Reimbursements (DF Form 301)
    3. Equipment (DF Form 302)

Do Not Post changes to the Detail of Appropriations and Adjustments (RWA) report.  Manually post changes to the Schedule 10s, and Financial Operations will generate the RWA Report to be used.

Do Not Post changes to the Fund Condition Statement (FCS).  Manually post changes to either the Schedule 10s (for expenditure changes), the Schedule 10Rs (for revenue changes), or the automated FCS “turnaround document” (for information not captured in the other two systems).  Financial Operations will generate the FCS report that will tie to the rounded RWA expenditures

Planning Estimates

  1. Understand the reason for all Planning Estimate (PE) adjustments posted.  Request back-up documentation from your departments for every PE adjustment, if necessary.
  2. Check last year’s Governor’s Budget, Salaries and Wages (footnotes) and Final Change Book to help identify additional adjustments, e.g., one-time costs or limited-term issues that need to be backed out.
  3. Check that all appropriate one-year costs are backed out in the budget year.  The “BCP Flag” report, the most recent one-time issue drill, PDS reports may be helpful in identifying these issues.  Keep a list of new one-time costs, which you approve when building your budget; send a copy to the department in January and keep it to be used the following year.  Identify one-time costs and explain items in the system.  Ditto for limited term positions/programs that are expiring.
  4. Build in full-year costs for programs established mid-year in the current year.
  5. Cite financial legislation by chapter/year of enactment and include a short descriptive title.
  6. Back out funding for continuously vacant positions per Government Code 12439 for both current and budget years, as appropriate.
  7. Update the PE System.  Be sure entries are on the proper line.  Use appropriate agenda groups, as directed in Finance Memos, e-mail instructions, etc.  Do not assume that departments have placed entries on the proper lines.  Run PE Reports and verify input.

Planning Estimate Reports

  1. Tie PE reports to the department’s PEs (suggest the use of PE Summary and Proof Listing reports).
  2. Run the Budget Summary Reports (we suggest the Decision Agenda Summary) and tie/reconcile the expenditures to the Schedule 10s department summary page by fund.  Timing differences are acceptable.
  3. A difference of $1,000 between PEs and Schedule 10s due to rounding is permitted.

Schedule 10s

  1. Check that a DF-38 (Schedule 10—Missing Record Report) is prepared and inserted into the Schedule 10s for each financial legislation appropriation affecting the department for which a Schedule 10 record does not exist.  Check for correct format and information.  The reference code (middle three digits of the Item number) indicates that it is a non-Budget Act appropriation (e.g., 501 instead of 001 or 601 instead of 101), and should match the journal entry received by the department from the SCO.
  2. Check that adjustments identified in Finance Memos or Budget Letters have been incorporated into the Schedule 10s.  For example, adjustments are required in many Schedule 10s each year to account for Leg Claims (9670) and Section 3.60 (PERS) adjustments.
  3. Budget year Schedule 10s cannot have any adjustments.  The initial authorized and total expenditures are equal.  Check that any changes posted in pencil have been reflected in the Revised Appropriation Totals.
  4. For continuous appropriations (usually statutory non-budget act items), check that the department has adjusted the authorized appropriation amount to equal the expenditures.  Most continuous appropriations do not show savings or carryovers.
  5. Most federal funds do not show savings or carryovers.  Adjust the revised authorized amount to equal the expenditures by adding a negative budget adjustment equal to the savings amount reflected.
  6. There may be rounding differences between the Schedule 10s (whole dollars) and the RWA Report and between the Schedule 10s and the PEs.  However, the fiscal statements within the budget spreadsheet must match exactly to the RWA Report, e.g., the total State Operations expenditures on the Expenditures by Category (Summary by Object) must equal the RWA Report.
  7. Check that the funding display in the 3-Yr Expenditures and Positions (Summary of Program Requirements) matches the SPR Report exactly.

RWA Report

Note:  This fiscal statement has been automated using the Schedule 10s.  Use the RWA Report to cross tie and verify the expenditures reported in the other fiscal statements.  The RWA tab of the budget spreadsheet includes a roll-up of the detailed RWA Report.  Only the totals from the RWA Report by fund and character should be listed on the RWA tab of the spreadsheet. 

  1. Check that the totals by character in the Detail of Appropriations and Adjustments (Reconciliation with Appropriations) match the totals in the Expenditures by Category (Summary by Object).
  2. Check that the totals for all characters in the Detail of Appropriations and Adjustments (Reconciliation with Appropriations) equal the expenditure totals in TOTALS, POSITIONS AND EXPENDITURES (All Programs) in the 3-Yr Expenditures and Positions (Reconciliation with Appropriations).
  3. For Capital Outlay, check that the TOTALS, EXPENDITURES, ALL FUNDS (Capital Outlay) line equals the TOTALS, EXPENDITURES, ALL PROJECTS line in the Summary of Projects.

Schedule 10Rs

  1. Check for reasonableness of the dollars.  Compare estimates of revenues to actual revenues in past years.
  2. Verify the correct authority is listed for each transfer and loan.
  3. Check the Uniform Codes Manual (UCM) code for each revenue type to verify that it is listed correctly.  Revenues have unique codes.  Special fund revenues begin with 1, non-governmental fund revenues with 2 or a higher number.  Transfers from other funds are coded FOXXXX, where XXXX equals the fund code number.  Transfers to other funds are coded TOXXXX, where XXXX equals the fund code number.
  4. If you have changes to your 10Rs after you receive your first RWA/FCS documents back from Financial Operations, hand-deliver updated 10Rs to Bill Steffenhagen or Alice Black for posting/system update prior to submitting your budget folder for review.  Verify your 10R information against the FCS e-mail you receive from Financial Operations after your budget is processed.

Fund Condition Statements

  1. For each fund condition displayed in a department’s budget, the new automated FCS will ensure that the RWA Report feeds the Total Expenditures line in the FCS from the Total Expenditures line in each RWA for the fund, by character.  (The FCS contains expenditure lines for State Operations, Local Assistance, Capital Outlay, and Unclassified categories.)
  2. Remember that the automated FCS reflects point-in-time data reported by departments through the Schedule 10s, Schedule 10Rs, and “turnaround documents”.
  3. Communicate expenditure and revenue data with appropriate fund/program coordinators.  If you are a fund/program coordinator, communicate (via e-mail) your need for specific expenditure or revenue data.  Run reports for specific funds from BUDDS/PE and Schedule 10 files.  Check with Financial Operations if you have fund coordination questions.
  4. Ensure that you have a positive or zero fund balance in each fund at the end of budget year.  Negative budget year fund balances are not allowed.

3-Yr Expenditures and Positions (Summary of Program Requirements)

  1. Check that the Personnel Years shown in the TOTALS, POSITIONS AND EXPENDITURES (All Programs) line tie to those shown in the Totals, Personal Services line in the Expenditures by Category (Summary By Object).
  2. Check that the sum of the expenditures shown in the TOTALS, POSITIONS AND EXPENDITURES (All Programs) equals the TOTALS, EXPENDITURES, ALL FUNDS for each fiscal year.
  3. Check that the expenditures for that program equal the total program expenditures on the Detailed Expenditures by Program (Program Budget Detail), if displayed.
  4. Check that the TOTALS, EXPENDITURES, ALL FUNDS line equals the Totals, Expenditures line in the Detailed Expenditures by Program (Program Budget Detail).
  5. Check that the total expenditures by fund equal the total expenditures by fund in the automated RWA Report.

Detailed Expenditures by Program (Program Budget Detail)

  1. Check that element level detail, if displayed, sums to the total.
  2. Check that the Totals, Expenditures () equals the TOTALS, EXPENDITURES, ALL FUNDS () on the Detail of Appropriations and Adjustments (Reconciliation with Appropriations), where () equals State Operations, Local Assistance, Capital Outlay, or Unclassified.

Expenditures by Category (Summary by Object)

  1. The Authorized Positions line equals the TOTALS, AUTHORIZED POSITIONS shown at the end of Schedule 7A (Salaries and Wages spreadsheet) as well as the Totals, Authorized Positions line in the Changes in Authorized Positions.
  2. The Total Adjustments line equals the Total Adjustments line in the Changes in Authorized Positions.
  3. Tie the State Operations and Local Assistance total expenditures to the TOTALS, EXPENDITURES, ALL FUNDS in the Detail of Appropriations and Adjustments (Reconciliation with Appropriations).
  4. Review Operating Expenses and Equipment (OE&E).  Identify any significant increases or decreases in line items between the current and budget year.  Understand the reason for these changes.  Check DF Form 302 (Equipment) and the DF Form 300 (Operating Expenses) for more detailed information on changes.  Generally, unless approved through BCPs, the dollar amount shown for total operating expenses should only increase in the budget year by the allowed price increase factor (e.g., 2 percent) if such a factor is approved by Finance.
  5. Compare the OE&E totals in your spreadsheet to the display shown in the last Governor’s Budget.  In particular, check the past year actuals in the spreadsheet against the mid-year amounts in the last budget.  When actuals differ significantly from mid-year numbers, ask the department why.  This enables you to determine how and why departments move money around, and whether they are using it for legitimate purposes.  You should recommend the deletion of amounts not used for authorized purposes.
  6. Calculate the department's salary savings’ percentage.  If a significant change has occurred, determine why.  If your department indicates that unfunded merit salary adjustments or worker’s compensation costs are pushing up their salary savings, ask for backup data on those amounts.  Determine whether some of the increase in salary savings could be instead distributed to the Staff Benefits line or OE&E.

Personnel Years

  1. Update the Department Positions and Personnel Years in the BUDDS/PE System.  To do this, go to the BUDDS main menu and select F2.  Enter the changes needed to bring the totals for each year to the correct amounts.  Prior to approved BCPs, Total Positions should equal the sum of Authorized Positions plus Total Adjustments and Total Personnel Years should equal this calculated number less Estimated Salary Savings.
  2. The TOTALS, AUTHORIZED POSITIONS (personnel years and expenditures) shown at the end of the department’s Salaries and Wages spreadsheet (Schedule 7A) MUST agree with the Totals, Authorized Positions line of the Changes in Authorized Positions and the Authorized Positions line of the Expenditures by Category.
  3. The Authorized Positions and Total Adjustments lines in the Expenditures by Category (Summary by Object) and Changes in Authorized Positions must be equal.
  4. The total personnel year amounts shown in the Totals, Personal Services line in the Expenditures by Category (Summary by Object) MUST equal those in the TOTALS, POSITIONS AND EXPENDITURES (All Programs) in the 3-Yr Expenditures and Positions (Summary of Program Requirements).

Supplementary Schedules of Federal Funds/Reimbursements

  1. Check that the total amount of federal funds in the Supplementary Schedule of Federal Funds ties to the Total Expenditures for Fund 0890 in the 3-Yr Expenditures and Positions (Summary of Program Requirements).  Check that the amounts for State Operations and Local Assistance tie to the TOTALS, EXPENDITURES line for Fund 0890 in the RWA Report.
  2. Check that the amount of reimbursements shown for State Operations and Local assistance tie to the amounts shown in the RWA Report.
  3. Run a Decision Agenda Summary report from BUDDS/PE and check the amount of reimbursements shown.  The amounts shown in this report should tie to the amounts in the Supplementary Schedule.
  4. Review the Supplementary Schedules for completeness.  Do they reflect all recent changes, such as Section 28.00s or budget revisions?  Do they reflect federal grants approved in prior years and continuing in the current and budget years?  Ditto for interagency contracts.  Ask department staff if these factors have been taken into account.  By including funding in the budget year, you can avoid processing Section 28.00s later.

Employee Compensation

  1. Check the department’s calculations.  Make sure they have followed the instructions in the Employee Compensation Budget Letter.  Request the department’s backup calculations to check its work.

Other Checks

  1. Read and edit/correct the Budget Narrative sections in Data Capture.
  2. Check the Authority citations.  Have the department update if new legislation has been enacted that is not within the area of the existing citations.
  3. Check that Section 28.00 and 28.50 adjustments for which notification has been sent to the Legislature are included.  Update Schedule 10s and PEs, as appropriate.
  4. Verify the formatting requirements detailed in the Governor's Budget Checklist.
  5. Keep a list of problems you encounter in checking the budget spreadsheet and supporting documents.  Specify the problems clearly.  Give a copy to the department to facilitate corrections.

(FO PPBA, October 2005)

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