CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
title
Pass the ordinance approving an amendment to increase the City of Naperville Annual Budget for Calendar Year 2020 by $8,706,400 (requires six positive votes)
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DEPARTMENT: Finance Department
SUBMITTED BY: Rachel Mayer, Finance Director
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
The City's finances are audited annually by an external company according to local code and state statute. The fiscal year ended on December 31, 2020 and the audit began shortly thereafter. As part of the audit process, staff closely examines all City funds in compliance with the annual budget. After all year-end expenditures, transfers, and accounting entries are completed, each fund is reviewed to ensure actual expenses did not exceed the approved budget. During the 2020 audit process, ten of the City's 31 funds were identified as being over budget. This is not an uncommon occurrence. Best practice and generally accepted accounting principles (GAAP) dictate that any fund exceeding budgeted expenses should be corrected through a budget amendment. This budget amendment is in compliance with GAAP and allow for the timely completion of the annual financial audit.
DISCUSSION:
The City's budget is organized by funds. Each fund is comprised of numerous expenditure accounts and each of those accounts is assigned an annual budget. While individual accounts may go over budget by year-end, those are typically offset by other accounts being under budget, and no action is required. However, strict budgetary compliance is maintained at the fund level. Should any fund exceed its budgeted expenditures, in total, the budget should be amended.
The following table details the ten funds that are identified as being over budget for 2020 and the recommended amended budget:
Fund
Increase/(Decrease)
Amended Budget
Community Development Block Grant
$33,822
$568,822
Debt Service
$4,478,351
$17,227,063
E911 Surcharge
$153,548
$3,053,548
ETSB
$2,496,653
$4,79...
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