I think that we all agree the operating budget is probably a municipality and a school district’s most important work product. A budget that is approved by the legislative body, is the legal document that gives our governing body officials the authority to incur obligations and pay expenses. It allocates resources among departments, reflecting the legislative body’s priorities and policies, and controls how much each department may spend.
A budget must be more than just financial data. A budget needs to include mission statements, goals, and objectives which clearly convey how budget decisions relate to a wider vision for the future of our town. And, all of these elements must be continuously reviewed so positive and/or negative results can be identified.
It is a complex process, that requires many levels of understanding and extensive review.
An Official Budget Committee provides assistance in that extensive review process. The Official Budget Committee (OBC) is formed only if the Legislative Body (registered voters) of a town adopts RSA 32:14. Once adopted, the responsibility for budgeting has been delegated from the Governing Body to the official budget committee. In addition to the three to twelve members-at-large, an official budget committee must have one governing body ex officio member, and one village district and/or school board member ex officio, if there is a village district and/or school district that lies wholly within the town. RSA 32:15.
With an Official Budget Committee, the budget process should work as follows:
- All officers and departments submit statements of estimated expenses and receipts to the governing body (Board of Selectmen or School Board).
- The governing body submits its own recommendations to the OBC, including all pertinent information regarding appropriations and the details of all anticipated revenue.
- Review of the Governing body’s recommendation and Prepare the budget. “It is the budget committee’s operating budget that is submitted to the Department of Revenue and presented to the voters for adoption at the annual meeting. That being said, the governing body, not the budget committee, [emphasis added] has the authority to propose other appropriations (i.e., separate warrant articles containing appropriations). When a village district or school district lies wholly within a town with a budget committee, the town budget committee also prepares the proposed budget for that village district and/or school district. In addition, in SB 2 towns, the budget committee prepares the default budget as well as the proposed operating budget if the voters previously delegated that responsibility to the budget committee. RSA 40:14-b; RSA 40:13, IX(b).” (link #1) …
- “RSA 32:16 and RSA 32:17 (link #2) also make it clear that the budget committee has the authority to request information directly from department heads and other officials. While necessary, requested information should be provided to the budget committee, the committee must remember that it has no authority to direct municipal staff work duties.” (see link #1)
- Hold Public budget Hearings: By statute, the OBC must hold at least one public budget hearing where all appropriations and the purpose of those appropriations must be disclosed and thoroughly discussed. Note: Preparing the budget is just one of the duties of the OBC. Periodic review the current and past year’s budget performances is another requirement. “In conjunction with budget committee’s responsibility to prepare the budget, the committee also has the authority to review current expenditures by acquiring a “comparative statement of all appropriations and all expenditures by them made in such detail as the budget committee may require.” RSA 32:22. In fact, RSA 32:22 says that the budget committee “shall meet periodically to review such statements.” (Link #1)
- Once the public hearings have been completed, the OBC proposed budget and its recommendations on special warrant articles must be submitted to the the Tow Clerk’s office, the two corresponding Governing Bodies and Department of Revenue Administration.
- Presentation to the voters for adoption at the annual meeting.
Clearly, the adoption of an OBC will enhance the budget review process….