1. WELCOME BUDGET MANAGERS AND CHIEF FISCAL OFFICERS
OSBM
State Budget Manual Update July 1, 2007
WELCOME BUDGET MANAGERS AND CHIEF FISCAL OFFICERS
State Budget Manual Update Meeting
June 2007 1

2. State Budget Manual Update Meeting, June 2007
OSBM
State Budget Manual Update July 1, 2007
State Budget Manual Update Meeting, June 2007
Welcome
Purpose of Meeting
Updated Budget Manual
Incorporates changes from HB914, State Budget Act
Includes policies since July 2006
Improves format
Adds links to related information

3. State Budget Manual Update Meeting, June 2007
OSBM
State Budget Manual Update July 1, 2007
State Budget Manual Update Meeting, June 2007
Presentation Format
Budget Development
Budget Execution
Capital Improvements
Rule Analysis
Q&A

4. Budget Development Organization of Budget Development Section
OSBM
State Budget Manual Update July 1, 2007
Budget Development
Organization of Budget Development Section
Authorities, roles, and responsibilities
General requirements
Process for developing the budget (including specific required elements)
Components of the budget
Results based budgeting
Systems supporting budget development

5. Budget Development Budget Development in the new SBA
OSBM
State Budget Manual Update July 1, 2007
Budget Development
Budget Development in the new SBA
G.S. 143C Article 3 - Governor’s Recommended Budget
Requirements for requests – legislative, judicial, state agencies, R&R, CI, IT
Governor’s recommendations (documents), message in short/long sessions
Funds included in the state budget
G.S. 143C Article 4 – Budget Requirements
Balanced budget, limitation on growth (operating budget and positions)
143C-1-3 Fund Types / GASB Fund Structure

6. OSBM
State Budget Manual Update July 1, 2007
Budget Development
Change: Results based budgeting information required in biennial budget
- Program goals and performance - G.S. 143C-3-5(b)(1)
- Goals and features of the Governor’s recommended budget G.S. 143C-3-5(d)
- Performance information described – G.S. 143C-1-1(d)(21)
Impact:
Continued emphasis on Governor’s results based budgeting initiative
Legislative interest in government performance

7. OSBM
State Budget Manual Update July 1, 2007
Budget Development
Change: Receipts budgeted to prior year actual collections or other reasonable basis - G.S. 143C-3-5(b)(2)(c)
Impact:
Greater emphasis on fully projecting and budgeting anticipated federal, agency and other receipts

8. OSBM
State Budget Manual Update July 1, 2007
Budget Development
Change: Anticipated federal funds defined to include previous funding levels, current grant awards and applications - OSBM policy in Budget Manual Section 3.12
Impact:
Fully anticipates and budgets receipts
Creates authority to spend, potential challenges when awards vary from prior years or applications

9. OSBM
State Budget Manual Update July 1, 2007
Budget Development
Change: All Governmental and Proprietary Funds Budgeted - G.S. 143C-3-5 (d)
Impact:
GASB fund types - G.S. 143C-1-3
Budgeted v. unbudgeted codes
Size of total state budget
Budget preparation time
Presentation of budget

10. Budget Development Questions? OSBM
State Budget Manual Update July 1, 2007
Budget Development
Questions?

11. Budget Execution Organization of Budget Execution Section
OSBM
State Budget Manual Update July 1, 2007
Budget Execution
Organization of Budget Execution Section
Authorities, roles, and responsibilities
Budget by fund sources, structure of the budget
General provisions for budget execution
Amending the operating budget
Allotment process
Information technology policies and procedures
Federal funds policies and procedures

12. Budget Execution Budget Execution in the new SBA
OSBM
State Budget Manual Update July 1, 2007
Budget Execution
Budget Execution in the new SBA
G.S. 143C Article 6 – Administration of the Budget
Budget enacted by General Assembly; certified budgets of State agencies
Budget adjustments authorized
Compliance with Chapter and appropriations act by State agencies
Use of State funds by non-State entities
State grant funds: administration; oversight and reporting requirements
Federal and other receipts

13. OSBM
State Budget Manual Update July 1, 2007
Budget Execution
Change: All Governmental and Proprietary Funds must be Budgeted – G.S. 143C-6-1 (c)
Impact:
To facilitate compliance, all Governmental and Proprietary Funds that were not included in the Governor’s Recommended Budget, will initially be established by submitting an 11-type budget revision based on prior year actuals.
Budget revisions must be submitted for all Governmental and Proprietary Funds.
In the future, the certified budget to agencies will include the amount appropriated from Governmental and Proprietary Funds.

14. OSBM
State Budget Manual Update July 1, 2007
Budget Execution
Change: Revisions to the Certified Budget are limited – G.S. 143C-1-1 (d)(7)
Impact:
Revisions to the certified budget can only be made for those circumstances outlined in above statute.
Many budget revisions prepared as 11-types before will now be processed as 12-types (e.g., unanticipated gifts or grants, adjustments to existing federal grant programs, carry forwards).
Creates deviation between the certified and the authorized budget (does not negatively impact the agency’s ability to make required changes).

15. OSBM
State Budget Manual Update July 1, 2007
Budget Execution
Change: Certain budget adjustments can only be nonrecurring – G.S. 143C-6-4(b)(3)(iii)
Impact:
Changes to the authorized budget within a fund/center are still allowed on a recurring basis.
Changes to the authorized budget that move funds between a fund/center can only be authorized on a nonrecurring basis (e.g., salary reserve, position transfers, and other movement of permanent funding).
Changes to budget additional receipts can only be authorized on a nonrecurring basis.
Changes processed as nonrecurring that agencies request to be permanent will be included in the continuation budget or the Governor’s Recommended Adjustments document.

16. Budget Execution Change: Approval of Receipt Supported Positions
OSBM
State Budget Manual Update July 1, 2007
Budget Execution
Change: Approval of Receipt Supported Positions
- G.S. 143C-6-6, G.S. 143C-6-4(3)(iii)
Impact:
Prior consultation with Gov Ops no longer required to establish receipt supported positions.
Agency must continue to submit a budget revision to OSBM for approval prior to the establishment of new receipt supported positions.
Positions funded from new receipts can only be processed as nonrecurring and will be included in the continuation budget or Recommended Budget Adjustments document for permanent funding if required.
New positions funded from salary reserves within a fund/center are allowed on a recurring basis.

17. Budget Execution Change: Use of Lapsed Salary Funds – G.S. 143C-6-9
OSBM
State Budget Manual Update July 1, 2007
Budget Execution
Change: Use of Lapsed Salary Funds
– G.S. 143C-6-9
Impact:
Lapsed salaries can only be used for nonrecurring purposes. Lapsed salaries can not be used for the following: grant in aid (6XXX), agency reserves (7XXX), intra agency transfers (8XXX), and the establishment of time limited positions.
Agencies are authorized to use 50% of generated lapsed salaries.
Agencies may request use of lapsed salaries that exceed 50% to deal with unforeseen circumstances on a case by case basis with thorough justification.
Type 14 budget revisions will continue to be processed for transfers among the 1XXX accounts with the exception of temporary wage accounts. 12 type budget revisions must be submitted for all other lapsed salary transfers.

18. OSBM
State Budget Manual Update July 1, 2007
Budget Execution
Change: Information Technology (IT) Funds do not revert until implementation – G.S. 143C-1-2(b)(iii)
Impact:
Reversion language amended to provide that funds for IT projects shall not revert until project is implemented or abandoned.
Policy established to facilitate the new requirement.
Nonrecurring funding in will be carried forward for transfer to a 2XXXX IT budget code only if the carry forward is consistent with current authority under the Executive Budget Act.
Transfers to the 2XXXX IT budget codes will be approved only for projects submitted to the PPM tool.
biennium, 2XXXX budget codes for IT projects will be incorporated into the Worksheet I.

19. Budget Execution Other Changes:
OSBM
Budget Manual Discussion
Budget Execution
Other Changes:
Prior consultation with Gov Ops is required when total requirements for a department exceed 3% of the certified budget - there are no longer deviation thresholds for each fund/center. (G.S. 143C-6-4(b)).
Allocations from the Contingency & Emergency Fund no longer require prior consultation with Gov Ops.
All applications for new federal and other grant funds must be submitted to OSBM (G.S. 143C-7-1).
Updates have been made to the procedures and forms for requesting a new fund/center and budget code.

20. Budget Execution Questions? OSBM
State Budget Manual Update July 1, 2007
Budget Execution
Questions?

21. Capital Improvements Consolidates Capital Information
OSBM
State Budget Manual Update July 1, 2007
Capital Improvements
Consolidates Capital Information
General Statutes Involving CIP, Capital Budget Preparation, and Budget Execution
General Provisions from Appropriations Act
COPs Procedures & Restrictions
Clarifies Close-out Procedures

22. Capital Improvements New CIP Requirements Needs Estimates
OSBM
State Budget Manual Update July 1, 2007
Capital Improvements
New CIP Requirements
Needs Estimates
Worksheet III Requirements (Description, Justification, OC-25 Cost Estimate, Operating Costs)
Description of Space Needs & Physical Requirements
Cash Flow Requirements

23. Capital Improvements New Reversion Requirements
OSBM
State Budget Manual Update July 1, 2007
Capital Improvements
New Reversion Requirements
Planning Must Begin in Same Fiscal Year as Funds are Appropriated
Construction Must Begin Within 2 Fiscal Years
Otherwise, Project Authorization Lapses
Project Reserve Account Established
Excess Appropriation Not Encumbered by Construction Contract Transferred to OSBM’s Project Reserve Account
Used for Emergency Repairs, Cost Overruns

24. Capital Improvements Questions? OSBM
State Budget Manual Update July 1, 2007
Capital Improvements
Questions?

25. OSBM
State Budget Manual Update July 1, 2007
Rule Analysis
Electronic submission required and Internet posting of final analysis
Small business impact information
More analysis required for larger rules
Fast-track approval for rules that are not significant
Replacement of OSBM Form 4 with more flexible format for analysis

26. OSBM
State Budget Manual Update July 1, 2007
Rule Analysis
Questions?

27. Changes to the Budget Manual
OSBM
State Budget Manual Update July 1, 2007
Changes to the Budget Manual
Questions or comments?