INTRODUCTION
cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the providers have beenmet. Budget development and budget adjustments utilize these same revenue and expenditure recognition timing policies and practices. As a general rule, the effect of inter-fund activity has been eliminated from the government-wide financial statements. Direct expenses have not been eliminated from the functional categories; indirect expenses and internal payments have been eliminated. A carefully designed system of internal accounting controls is in operation at all times. These controls are designed to provide reasonable, but not absolute, assurances that safeguard assets against loss from unauthorized use or disposition and to ensure the reliability of financial records used in the preparation of financial statements. The concept of reasonable assurance recognizes the cost of a control should not exceed the benefit. The evaluation of costs and benefits likely to be derived require estimates and judgments by management. An independent, certified public accounting firm reviews the City’s financial accounting processes, practices and records annually. Quarterly Financial Reporting On a regular basis, the Budget Office will evaluate financial performance relative to the adopted and adjusted budget, and prepare and present reports to the City Council, City management, and Finance Commission. The purpose of these reports is as follows: Give decision makers time to consider actions that may be needed if major deviations in budget-to-actual expenditures or revenues become evident. The City utilizes the following policies to govern budget development and operations. Balanced Budget The Irvine City Charter, Article X, Section No. 1001 sets the legal requirement for the City Manager to submit to the City Council a proposed budget and an accompanying message at such time as the City Council shall prescribe. It is the goal of the City Manager that this biennial budget be balanced. A budget will be adopted by the City Council for two fiscal years, broken into one year increments. It is the City’s goal to fund current year operating expenses with current year revenues. The budget proposal as presented by the City Manager shall be balanced, with recurring revenues meeting or exceeding recurring expenditures for ongoing operations. Non-recurring revenues may not be used to fund recurring expenditures without the approval of the City Council. Budget Process Article X of the Irvine City Charter and Section I-3-210 of the Code of Ordinances set forth the legal requirements for the preparation of the budget. The fiscal budget is prepared by the City Manager for a two-year fiscal cycle beginning July 1 and ending June 30 and must be adopted by the City Council. The Budget Office prepares and disseminate a budget preparation calendar on tasks and due dates. Departmental budget coordinators have the responsibility for ensuring compliance with budget development policies, procedures and timelines. Provide an early warning of potential concerns and problems; Identify, investigate and correct accounting errors; Evaluate and explain significance of on-going variances;
FY 2019-21 Proposed Budget
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