Budget Development Process

Yavapai County

To guide the development and management of the budget process for the County and to ensure accountability to the County and its citizens while maintaining compliance with the legal requirements of providing an annual budget.

Authority

Arizona Revised Statutes (A.R.S.) Section 42-17101 and 42-17102 requires counties to prepare annual budgets on forms the Auditor General’s Office developed. The official forms on Schedules A through G include all elements statute requires that counties must include in their budget. Counties may choose to add more information or detail than the statute requires. The County shall not levy primary property taxes in excess of the maximum allowable primary property tax calculated for the budget year as per A.R.S. Section 42-17051. A.R.S. Section 42-17106 specifies that Counties including Special Districts may not incur expenditures in excess of the amounts appropriated by the Board of Supervisors (Board) in the annual budget.

Basis of Budgeting

Yavapai County's ("County") budget is prepared on a budgetary basis consistent with Generally Accepted Accounting Principles (GAAP) and is consistent with the County's Comprehensive Annual Financial Report fund statement reporting. The County's governmental funds include the General Fund, Special Revenue Funds and Debt Service Funds. The County's government funds are budgeted on the modified accrual basis of accounting.

Balancing the Budget

Once the county sets its tentatively adopted budget, expenditure totals are set and cannot not exceed the published tentatively adopted amounts. The County maintains a structurally balanced budget where total budgeted expenditures do not exceed total budgeted revenues and fund balance resources. Departments monitor their budgeted expenditure to the bottom line, not individual line items. Budgets cannot be exceeded at the department level but can be revised with a Board of Supervisor's approved transfer of funds from the contingency.

Method of Budgeting

General Fund budgets are prepared by one of two methods, a line-item basis or a more detailed transparency basis where expenditures within line-items are identified and justified. Special Revenue budgets are prepared on a program basis linked to the requirements of the grant or special revenue funds and limited by the fund’s resources. Debt Service Funds are budgeted based on debt schedules and borrowing activities.

Transparency Versus Hybrid Zero-Based Budgeting

The process for transparency budgeting is closely aligned to zero-based budgeting. True zero-based budgeting is a process that requires building a budget from the ground up starting from zero. All expenses must be justified for the budget cycle and one of the primary goals is to move away from a predominantly incremental budget where the prior year's budget is always the starting point. Starting from scratch on the budget process each year could be time consuming and ultimately not completely necessary since the County provides similar services from year to year.


A hybrid of the zero-based approach, “transparency budgeting” requires departments to start with current budgets and detail expenditures within line-items, justifying amounts requested for those detailed expenditures. Detailed expenditures may consist of known costs as in the instance of contracted services, estimates or trends of projected expenditures. The transparency process is designed to provide a more comprehensive understanding of the budget to the internal and external community.

The Budget Process Overview

Each year, the Yavapai County Board of Supervisors (the "Board") establishes guidelines and priorities for budget development. The Board of Supervisors works with the constituents in the various districts to identify and develop the needs of the communities. Community input is incorporated into the overall budget process and discussion of priorities. The Board of Supervisors is the body that is ultimately responsible for the review, tentative budget adoption and final budget adoption for Yavapai County. The County Administrator is responsible for submitting the countywide balanced budget for review and approval of the Board. The budget is coordinated and compiled by the budget team in the County Administrator’s Office where baseline budget amounts are determined, General Fund revenues are projected and operating and capital budget requests are evaluated and summarized.


The elected officials and department directors are responsible for not only developing their department General Fund and special revenue budgets, but they are responsible for monitoring and tracking their budget and funds throughout the fiscal year. Departments are required to maintain a positive balance with respect to any General Fund balance. Departments are also responsible for monitoring and tracking special revenue and grant funds complying with any contracts or agreements thereof. Budget adjustments must be approved by the Board of Supervisors. Justification for the budget adjustment and request for funds must include detailed rationale and calculations.


In the fall of 2021, the Board adopted a modified process for budgeting to provide a more thorough understanding of the budget by the Board and enhance transparency to the broader community. The new process extends the length of the budget cycle which begins promptly after the adoption of the current budget (see the Budget Calendar). This allows more time for the development of strategic goals for the County as well as adequate time for selected departments to prepare the additional information for the modified budgets. The modified process is a transparency model that departments will be required to prepare on a multi-year rotational basis.