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Financial Policies, Guidelines, and Practices
Budgeting, Accounting, and Audit Practices. Kansas law prescribes the policies and procedures by
which the cities prepare annual budgets. By August 25th of each year, prior to commencement of the new
fiscal year on the following January 1st, the governing body of the City must adopt a budget, which is
filed with the City Clerk and the State Director of Accounts and Reports. The budget itemizes anticipated
revenues and proposed expenditures, detailed by program and object of expenditures, for the next fiscal
year. Funds must be balanced so that total resources equal obligations in accordance with Kansas law
(K.S.A. 79 2927), which requires that, “The budget of expenditures for each fund shall balance with the
budget of revenues for such fund. . . .” The level of budgetary control or expenditure limit is at the fund
level, except for the General Fund, which also has established expenditure limits for each Department
financed. However, statutes allow for the transfer of budgeted amounts between line items within a fund.
Departments are responsible for managing their budgets to the fund or department total level. Changes
from expenditure category to expenditure category may be made administratively. Transfers of $15,000
or more from department to department within the General Fund may only be made with the approval of
the City Council. The City maintains a financial and budgetary control system. Expenditures and
revenues are tracked to ensure adherence to the budget and awareness of the financial environment.
Monthly reports are prepared that compare actual revenues and expenditures to budgeted amounts and
provide a picture of the City’s cash position.
Kansas statutes require that the budget be prepared for the next fiscal year by August 1st of each year.
The proposed budget must then be published along with a notice of public hearing on or before August
5th. The public hearing is held by August 15th, but must be at least ten days after publication. The budget
is to be adopted on or before August 25th. The statutes allow for the governing body to increase the
originally adopted budget if that increase is financed with previously unbudgeted revenue other than ad
valorem property taxes. A notice of public hearing to amend the budget must be published in the local
newspaper. At least ten days after publication, the hearing may be held and the City Council may amend
the budget.
In order to ensure that Kansas municipalities conduct their affairs in a fiscally responsible manner, the
State Legislature enacted a cash basis law in 1933 (K.S.A. 10 1101 et seq.) which states in part that it is
unlawful, except where bonds, temporary notes, or no fund warrants are authorized, “for the governing
body of any municipality to create any indebtedness in excess of the amount of funds actually on hand in
the treasury of such municipality, or to authorize the issuance of any order, warrant or check, or other
evidence of such indebtedness of such municipality in excess of the amount of funds actually on hand in
the treasury of such municipality at the time for such purpose.” The purpose of the cash basis law is to
prevent municipalities from spending more than they receive annually in operating revenues, and to
prevent the issuance of short term debt to cover operating expenditures.
Kansas statutes and regulations of the Kansas Board of Accountancy provide for municipal accounting
in conformance with generally accepted accounting principles (GAAP). Separate funds are maintained
by the City for specific purposes and projects, in compliance with GAAP, State laws and regulations,
bond covenants, tax levies, grant agreements, and City ordinances and resolutions. The City prepares a
Comprehensive Annual Financial Report (CAFR), disclosing the financial position, results of operations,
and changes in fund equities or retained earnings for all funds and accounts groups in accordance with
GAAP. An independent firm of certified public accountants performs annual audits of this information.
The audited CAFR is filed in the Office of the City Clerk and with the Nationally Recognized Municipal
Securities Information Repositories (NRMSIRs), among other agencies.
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