Budget Checks Guidelines for Preparation of the Governor’s Budget
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 budget analysts are responsible for reviewing
documents presented in these guidelines, which are covered in the following
III. Schedule 10s
(three year expenditures)
IV. Detail of Appropriation and Adjustments Report
V. Schedule 10Rs
VI. Fund Condition Statement
VII. 3-Year Expenditures and Positions
Expenditures by Program
IX. Expenditures by Category
XI. Supplementary Schedules of Federal Funds/Reimbursements
XII. Employee Compensation/Retirement
XIII. Other Checks
- Analyze and understand the reason and authority for all Planning
Estimate (PE) adjustments posted. Request back-up documentation from your
departments for every PE adjustment, if necessary.
- 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 funding/positions that need to be
- Check that all appropriate one-year costs in the current
year are backed out in the budget year. The “BCP Flag” report and PDS
reports may be helpful in identifying these issues. Keep a list of new
one-time costs that are approved when building the 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. Do the same for
limited-term positions/programs that are expiring.
- Build in full-year costs in budget year for programs
established mid-year in the current year (when it was budget year), and
prior approved BCPs that had only ramping-up costs.
- Cite financial legislation by chapter/year of enactment
and include a short descriptive title.
- Back out funding for continuously vacant positions per
Government Code 12439 for both current and budget years, as appropriate.
- Ensure that reappropriations and carryovers are reflected on
the proper lines. If past year Schedule 10s reflect carryovers, ensure
that they are properly budgeted in the planning estimates in current and/or
- 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.
II. Planning Estimate Reports
- Tie PE reports to the department’s PEs (suggest the use of
PE Summary and Proof Listing report).
- Run the Schedule 10 Reconciliation Report to tie/reconcile
the expenditures to the Schedule 10s department summary page by fund. Differences
due to the timing of data input to the systems are acceptable. However,
final numbers must match in both systems.
- A difference of $1,000 between current year PEs and
Schedule 10s due to rounding is permitted.
III. Schedule 10s
- Review and analyze Schedule 10s to determine the
reasonableness of dollar amounts, (e.g., are dollar amounts consistent
with past trends and patterns? If not, why?)
- Verify Past Year Schedule 10s reconcile with department’s
year-end financial statements (compare to Report 6).
- Check that a DF-38 (Schedule 10—Missing Record Report) is
prepared for each financial legislation appropriation affecting the
department for which a Schedule 10 record does not exist. Check for
correct format and information.
- Verify all adjustments are accurately reflected (including
adjustment title, amount, scheduling, etc.).
- 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. If you have
unanticipated costs for current year that may need funding via a 9840 item
or supplemental appropriations bill, please make sure the Cash Management
Section is aware of those issues and that you have posted those
adjustments to your documents.
- Budget year Schedule 10s cannot have any adjustments. The
initial authorized and total expenditures must equal. Check that all
approved changes have been incorporated into initial authorized and
revised appropriation totals.
- 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.
- Most federal funds do not show savings or carryovers.
Adjust the revised authorized amount to match the expenditures by adding a
negative budget adjustment (#910 adjustment).
- There may be rounding differences between the Schedule 10s
(whole dollars) and the Detail of Appropriations and Adjustment (DAA) Report,
and between the Schedule 10s and the PEs. However, the fiscal statements
within the budget spreadsheet must match exactly to the DAA Report, e.g.,
the total State Operations expenditures on the Expenditures by Category
must equal the DAA Report.
- Check that the funding display in the 3-Yr Expenditures
and Positions matches the 3-Year Expenditure by Fund Report exactly.
- Complete the General Fund Expenditure Reconciliation form.
Request a copy of the General Fund financial statements from your
department for the year just ended (past year) and provide to the Cash
Management Section (either a scan or hardcopy).
IV. Detail of Appropriation and Adjustments Report (DAA)
is created from the Schedule 10s. Use the DAA Report to cross tie and
verify the expenditures reported in the other fiscal statements. The DAA tab
of the budget spreadsheet includes a roll-up of the detailed DAA Report. Only
the totals from the DAA Report by fund and character should be listed on the DAA
tab of the spreadsheet.
- Check that the totals by character in the DAA Report match
the totals in the Expenditures by Category.
- Check that the totals for all characters in the DAA Report
equal the expenditure totals in TOTALS, POSITIONS AND EXPENDITURES (All
Programs) in the 3-Yr Expenditures and Positions.
- 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.
V. Schedule 10Rs
1. Check for
reasonableness of the dollars. Compare estimates of revenues to actual
revenues in past years. Note reason for large year over year changes, as
2. Verify that past
year amounts reconcile with department’s year-end financial statements (compare
to Report 4 for revenues and Report 6 for transfers and loans).
3. Verify the
correct authority is listed for each transfer and loan.
4. Check the Uniform
Codes Manual (UCM) for each revenue type to verify that it is listed
correctly. Revenues have unique codes. General Fund and special fund revenues
begin with 1; nongovernmental cost fund revenues begin with 2 (please note that
10Rs are not required for nongovernmental cost funds). Transfers from other funds are coded FOXXXX, where XXXX equals the fund code of the fund
providing the cash. Transfers to other funds are coded TOXXXX, where
XXXX equals the fund code of the receiving fund. Loan and Loan repayments use
the same coding as transfers, but should include verbiage noting “loan” or
“loan repayment” in the authority.
5. Coordinate with
other fund owners to ensure transfer to and transfer from amounts reflected on
their Schedule 10Rs tie to their counterpart’s Schedule 10Rs.
6. Remember to add
loan repayments that are scheduled for the new budget year. Since loan
repayments may not be scheduled in the past or current year, it’s easy to
forget that loan repayments for budget year need to be added. Cash Management
will distribute a list to units detailing all budget year loan repayments to
avoid this problem.
7. If changes to a 10R
are needed after the first DAA Report/FCS documents are received from Financial
Operations (FO), hand-deliver updated and initialed/approved 10Rs to FO prior
to submitting your budget folder for review.
8. Check that all
proposed Budget Bill items for revenue transfers and loans have been listed on
9. Compare loans
and loan repayments for consistency with information submitted on loan drills
to the Cash Management Section.
10. Verify SMIF interest amounts
included on Schedule 10Rs appear reasonable as compared to the Quarterly SMIF
Allocation Recap Worksheet provided by the Cash Management Section.
11. Analysts for Administering
Orgs must gather information from departments receiving revenues for that fund.
12. Complete the General Fund
Revenue Reconciliation form.
VI. Fund Condition Statements (FCS)
- Verify the fund administrator has submitted a past year
fund reconciliation package including a cover memo, certification form(s)
(DF-117), Detailed Fund Balance Report(s) (DF-303) and supporting
financial reports. For shared funds, a consolidated DF-303 is included.
- Remember that the FCS reflects point-in-time data reported
by the fund administrator (prior year adjustment, Schedule 10, Schedule
10Rs, and additional non-add detail) and fund users (only Schedule 10s).
- Verify the beginning balance for the past year matches the
amount reflected in the previous Governor’s Budget for that fiscal year.
- The Total of Prior Year Adjustments from the DF-303 ties
to the prior year amount posted in the Fund Condition Statement. In
general, the prior year adjustment should not be zero.
- Check that the past year ending fund balance agrees with
the year-end financial statements and DF-303. (Shared funds use
- Verify the revenue trend is consistent with program
- Verify revenue and transfers tie to 10Rs for special
- Verify that past year revenues and transfers tie to DF-303.
- 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. For expenditures, run reports for specific funds from BUDDS/PE and
Schedule 10 files. Check with FO if you have fund coordination questions.
- For each fund condition displayed in a department’s budget,
the expenditures are fed from the Total Expenditures line in each DAA
Report for the fund, by character. (The FCS contains expenditure lines
for State Operations, Local Assistance, Capital Outlay, and Unclassified
categories.) Make the sure numbers tie to the Schedule 10s.
- Verify past year expenditures tie to the DF-303.
- The expenditure amounts should include all approved
Capital Outlay project expenditures (BL 12-25).
- In the rare event prior or past year
revenues, transfers, or expenditures in the fund condition statement will
include changes due to budget/policy adjustments made by Finance (e.g.,
pending legislation), and the amounts were not included in year-end
financial statements, the impact will be reflected on the applicable past
year Schedule 10 or the Schedule 10R, and the Fund Condition
Statement. The Schedule 10 or Schedule 10R must include the annotation
“Budget/policy adjustments made by Finance” , and be accompanied by a full
explanation for this situation and amount. Additionally, the Fund
Condition Statement for any fund affected by budget/policy adjustments
made by Finance in the prior/past year must be manually marked-up to
contain an extra non-add line in the appropriate section displaying the
impact of the adjustment and entitled “Budget/policy adjustments made by
- Ensure the budget year has a
positive or zero fund balance for each fund. Negative ending fund
balances in the budget year are not allowed.
VII. 3-Yr Expenditures and Positions
- Check that the Positions 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.
- 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.
- Check that the expenditures for that program equal the
total program expenditures on the Detailed Expenditures by Program, if
- Check that the TOTALS, EXPENDITURES, ALL FUNDS line equals
the Totals, Expenditures line in the Detailed Expenditures by Program.
- Check that the total expenditures by fund equal the total
expenditures by fund in the automated DAA Report.
VIII. Detailed Expenditures by Program
- Check that element level detail, if displayed, sums to the
- Check that the Totals, Expenditures equals the TOTALS,
EXPENDITURES, ALL FUNDS on the DAA Report. Also check that the total
State Operations, Local Assistance, and Unclassified lines in the Detailed
Expenditures by Program equals the same lines in the DAA.
IX. Expenditures by Category
- 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.
- The Total Adjustments line equals the Total Adjustments
line in the Changes in Authorized Positions.
- Tie the State Operations and Local Assistance total
expenditures to the TOTALS, EXPENDITURES, ALL FUNDS in the DAA Report.
- 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 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.
- Compare the OE&E totals in your spreadsheet to the
display shown in the last Governor’s Budget. Specifically, 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
- Update the Department Positions 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.
- The TOTALS, AUTHORIZED POSITIONS 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
- The Authorized Positions and Total Adjustments lines in
the Expenditures by Category and Changes in Authorized Positions must be
- The total position amounts shown in the Totals, Personal
Services line in the Expenditures by Category MUST equal those in the
TOTALS, POSITIONS AND EXPENDITURES (All Programs) in the 3-Yr Expenditures
XI. Supplementary Schedules of Federal Funds/Reimbursements
- 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. Check that the amounts
for State Operations and Local Assistance tie to the TOTALS, EXPENDITURES
line for Fund 0890 in the DAA Report.
- Check that the amount of reimbursements shown for State
Operations and Local Assistance ties to the amount shown in the DAA Report.
- 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.
- 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? Do the same for interagency
contracts. Ask department staff if these factors have been taken into
XII. Employee Compensation/Retirement
- Check the department’s calculations. Make sure they have
followed the instructions in the Employee Compensation/Retirement Budget
Letters and all similarly highlighted cells in the Employee Compensation
Excel workbook include matching numbers. Request the department’s backup
calculations to check the accuracy of the reported amounts.
- Since employee compensation adjustments are for the
current year, ensure the total salaries used for calculations are less
than or equal to the current year of the Salaries and Wages being
developed (see annual employee compensation/retirement Budget
Letters). HR Net (through CalHR, formerly called PIE) is also
available with more detailed information on filled positions and
classifications at a department.
- Confirm correct items of appropriations and funds are
identified on all applicable worksheets, and the correct fund split is
- Ensure all reimbursements include a “501” to “600”
reference code (not 001) on all applicable worksheets (i.e. 1234-501-0995).
- Ensure the scheduling worksheets show current year in
whole dollars, rounded to the dollar (i.e., $1,592) and budget year in
whole dollars, rounded to thousands (i.e., $2,000).
- Confirm the split of one-party, two-party, and family
health enrollments is consistent with department back-up (i.e., 100% of
department’s employees should not be in the family plan).
XIII. Other Checks
1. Read and
edit/correct the Budget Narrative sections in Data Capture.
2. Check the authority
citations. Have the department check the citations section annually and update
the citations section of the Budget Narrative if new legislation has been
enacted or abolished.
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. Verify the Detailed
Budget Adjustments display is accurately reflecting information from PDS. (No
missing issues or extra issues.)
6. 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, and meet with them to discuss, if necessary.