Florida Sheriffs Association Executive Leadership Conference April 9

Florida Sheriff’s Association Executive Leadership Conference April 9, 2015 The Keys to Successful Budget Forecasting Panel Patty Justice, CPA, CFO, Alachua County Sheriff Jane Demeulenaere, Accounting Manager, Osceola County Sheriff Susan Krause, CPA, Fiscal Affairs Director, Pinellas County Sheriff 1

Budget Definition • A Budget is an itemized summary of intended expenditures estimates/guesstimates • A Budget is a dynamic process which requires constant monitoring and occasional revisions that reflect ever changing economic developments and operational problems • Florida Statute Chapter 30. 49 governs how a Sheriff is to prepare & submit their budget request 2

Budget Preparation & Planning (1) Preparation – when the budget plan is put together (is there a plan for spending? ) (2) Programs – are we asking for what we need to operate a specific program? Do we even know what is needed to operate the program? Ask questions! (3) Adoption – once the budget is in place, there are not many options if funding is not sufficient to cover program costs 3

Budget Forecasting • This is your expectation of what really will happen over the next fiscal year, based on what is happening now • Use historical internal accounting data along with external indicators (price of fuel, for example) • Forecasts should be regularly monitored and periodically updated (weekly, monthly, quarterly) 4

Define Assumptions • Determine fundamental issues impacting the forecast • What is the time horizon? How far out do we need to look? • Are there any political/legal issues related to the forecast? • Define your revenue and expenditure categories (draw from BOCC is a monthly, constant revenue stream) 5

Gather Information • Knowledge is Power – ask questions of department heads if you are not familiar with the operation and their needs (how often is a load of fuel delivered? ) • Be aware of events that could disrupt the operating environment (labor strikes at fuel refineries = price increase) 6

Preliminary Analysis • Look for trends or cycles that may cause costs to vary depending on time of year, events in the community, pending legislative changes, etc. • Are there demographic changes that may affect costs? Population changes affect service demands – thus rising costs 7

Forecasting Method • There are various quantitative and/or qualitative forecasting models available • More complex doesn’t mean better answers • Simple techniques perform just as well or better on average • Simple techniques require less data, less expertise on the part of the forecaster, and less overall effort 8

Communicating • Memo or other communication, presented to Command Staff after month-end close • The purpose of a forecast is to inform and assist in decision-making • The message should address budget short-falls or surpluses • Address areas of concern, such as changes in financial/economic environment • A clear, simple forecast message is vital 9

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Object Code - Personnel Services • Largest part of your budget request (at least 80%) • Sub Objects: – Salaries including overtime, incentive pay, FTO pay – FICA (SS 6. 2% and Medicare 1. 45% = 7. 65%) – Retirement Contributions (FRS) Health/Dental Insurance – Life/Disability Insurance – Workers Comp Insurance – Clothing Allowance 30. 49(11) F. S. 11

Example – Payroll Projection 12

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Object Code - Operating Expenses Sub Objects: • Contracts • • • – – Inmate Medical K Food Service K Hanger Lease K Telephone Services Maintenance Agreements Professional Service Fees Liability and Auto Insurance Fuel Auto Repairs & Maintenance Training/Travel Uniforms Ammunition Weapons Books/Subs/Pubs 16

Example – Operating Projection 17

Object Code - Capital Outlay Agency defines $ amount when creating their budget Sub Objects: – – – Cars Boats Helicopters Computer Equipment Radio Equipment 18

Example – Capital Outlay 19

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What if There’s a Shortfall? • 2 nd Dollar Fund for Training • State/Federal Forfeitures (check guidelines) • Budget Transfers between Elements (NOT functions) • Capital Lease (either from vendor or from bank) • Utilize Other Revenues • Request Contingency funding from County 22

Reserve for Contingencies • The Board shall include the reserve for contingencies for each budget of the Sheriff in the reserve for contingencies of the appropriate county fund 30. 49(6) F. S. • The Reserve for Contingencies in the budget of a Sheriff shall be governed by the same provisions governing the amount & use of the counties reserve for contingencies 30. 49(7) F. S. • Except that the reserve for contingency of a Sheriff SHALL be appropriated upon written request of the Sheriff 30. 49(7) F. S. 23

Can Other Revenues be Utilized? • Sale Proceeds from Auctioned Equipment &Vehicles • Insurance Proceeds from Wrecked Vehicles • Purchasing Card Rebate • Helpful to have a separate fund for receipt and spending 24

Calculating Remaining Funds & Closing Fiscal Year • Utilize Both Budget to Actual and Profit/Loss Reports from Financial Software • Don’t forget to include any Outside Revenues (if not used for expenditure funding) • Must Return All Unspent Funds by October 31 st! 25

Example – Profit & Loss Report 26

• Questions & Panel Discussion 27