Budget Funds

Can a county carry over unexpended budget funds or transfer budget funds?

MAIN REFERENCE POINTS

• Local Government Code Section 111.004
• Local Government Code Section 111.010

TALKING POINTS:

1. Section 111.004, Local Government Code states that a county budget must include a financial statement of the county that shows:\the outstanding obligations of the county;
   • the cash on hand to the credit of each fund of the county government;
   • the funds received from all sources during the preceding fiscal year;
   • the funds available from all sources during the ensuing fiscal year;
   • the estimated revenues available to cover the proposed budget; and
   • the estimated tax rate required to cover the proposed budget.
2. As cited above, the budget must include the “cash on hand to the credit of each fund,” CJCAT Senior General Counsel Jim Allison underscored. Therefore, the budget must include any unexpended funds that are being carried forward.
3. The Commissioners Court may vote to transfer unexpended funds to other purposes unless they are statutorily dedicated, or the Commissioners Court may vote to “carry over” all or part of the unexpended funds for the same purpose in the new budget, Allison specified.
4. Section 111.010(b), Local Government Code states that “the Commissioners Court may spend county funds only in strict compliance with the budget, except in an emergency.”
5. Section 111.010(c) provides the following exception: “The Commissioners Court may authorize an emergency expenditure as an amendment to the original budget only in a case of grave public necessity to meet an unusual and unforeseen condition that could not have been included in the original budget through the use of reasonably diligent thought and attention. If the court amends the original budget to meet an emergency, the court shall file a copy of its order amending the budget with the county clerk and the clerk shall attach the copy to the original budget.” Therefore, the Commissioners Court must declare an emergency to create a new item in the adopted budget during the fiscal year.
6. In addition, Section 111.010(d) allows the Commissioners Court by order toamend the budget to transfer an amount budgeted for one item to another budgeted item without authorizing an emergency expenditure. Therefore, a budget amendment to transfer funds from one budgeted item to another budgeted item does not require an emergency declaration.
7. These provisions from Subchapter A, Chapter 111, Local Government Code apply to counties with a population of 225,000 or less. Similar provisions in Subchapter B or Subchapter C may apply to other counties. – CJCAT Senior General Counsel Jim Allison contributed to this article.