Summary of Requirements: Any appropriation measure may be amended or supplemented if the entity complies with the same laws used in making the original appropriation. However, no appropriation may be reduced below an amount sufficient to cover all unliquidated and outstanding contracts or obligations against them. “Transfers” * may be made by resolution or ordinance from one appropriation item to another. Subject to certain limitations, the annual appropriation measure may contain an appropriation for contingencies. Rulings filed in the case of C. B. Transportation, Inc. v. Butler County Board of Mental Retardations, 60 Ohio Misc. 71, 397 N.E.2d 781 (C.P. 1979), as well as Burkholder v. Lauber, 6 Ohio Misc. 152 (1965), held that a board or officer whose judgment and discretion is required, was chosen because they were deemed fit and competent to exercise that judgment and discretion and unless power to substitute another in their place has been given, such board or officer cannot delegate these duties to another. Following such reasoning, a local government’s governing board would be prohibited from delegating duties statutorily assigned to it, such as the ability to amend appropriations as provided for in Ohio Rev. Code section 5705.40. Per AOS Bulletin 97-010, budgeted expenditures coincide with either the final appropriations the legislative body passed prior to fiscal year-end or the sum of those final appropriations plus encumbrances carried forward from the prior year. That is, the AOS does not recognize appropriation amendments retroactive to the prior year. The statutory budget process codifies what are or should be good management practices. These processes provide a framework that helps management and legislators reasonably control spending. * “Transfers” in this context mean reallocations of appropriations within a fund. These do not refer to transfers of cash between funds. In determining how the government ensures compliance, consider the following: What control procedures address the compliance requirement? W/P Ref. Accounting system capable of recording appropriations and comparing them to actual results. Reconciling appropriation totals to totals recorded in the accounting system. Policies and Procedures Manuals Knowledge and Training of personnel Comparison of Outstanding Encumbrances and Balances to Proposed Amendments Legislative and Management Monitoring Management’s identification of changes in laws and regulations Management’s communication of changes in laws and regulations to employees Suggested Audit Procedures - Compliance (Substantive) Tests:
proceeds are restricted to expenditures for textbooks, instructional materials, supplies and equipment. d. Other revenue sources identified by the Auditor of State, in consultation with the Department of Education, in rules adopted by the Auditor of State. e. Expenditures in excess of the current year set-aside requirements and the carry over balance in the textbooks and instructional materials set-aside may be carried forward to reduce future years’ textbooks and instructional materials set-aside requirements. Contributions in excess of required set-asides may also be carried forward to offset future year(s) textbook and instructional materials set-aside requirements. 6. Read any information included in the report (e.g., the introductory and statistical sections of a CAFR), and determine whether it is consistent with the note. If the information is materially inconsistent or misstated, consult with Accounting & Auditing Support if the client refuses to make necessary changes. 7. Prepare a narrative for the working papers that describes the nature, timing, and extent of our tests of the reserve. Audit Program – B AUDITING THE CAPITAL IMPROVEMENTS AND MAINTENANCE RESERVE If the school district elected to apply the pre-July 1, 2001 base calculation, use Audit Program E. Step No. Procedure for Consideration Done By or N/A Date Comp 1. Testing note accuracy. a. Obtain the school district’s set aside note and supporting documentation. b. Foot and crossfoot the note c. Foot and crossfoot the client’s underlying calculations (if any). 2. Trace beginning of the year balance to prior audited financial statements or working papers. 3. Test the annual reserve calculation by multiplying the percentage by the “formula amount” and multiplying the result by the school district’s “student population”. The preceding year’s “formula amount” and “student population” should be used for this calculation: [(% x Formula Amount) x Student Population] a. This information is available for each school district and joint vocational school district on the Ohio Department of Education’s website: