BUDGET GUIDELINES
Contract Budgeting Approval to enter into contracts for the purchase of services is accomplished through the City’s fiscal year budget approval process, except for those contracts exceeding $1 million, which require Finance Commission review (or Great Park Board review for Great Park contracts), and City Council approval. City staff members enter into the budget system specific line item detail describing the nature of the contract services requested and the dollar value (including those exceeding $1 million). These budgetary line items should align with specific contract requirements or types of services, even though there may be more than one individual contractor for the particular service, versus total program funding requirements. In addition to the City’s general requirements set forth above, the City Council retains the authority to specifically identify any contract during the fiscal year budget process for further review and approval prior to contract award regardless of contract value. The annual pre-approval process eliminates the need to obtain individual Council approval for each contract throughout the fiscal year if no greater than $1 million in value. Once the annual budget is approved, each contract service line item is assigned a unique number referred to as the “Job Ledger Key,” or “J/L Key.” This J/L Key number is required when entering Purchase Requisitions into the financial system for contract services. In the event the J/L Key limit has reached its limit, the system will block the Purchase Requisition entry. From time to time, unanticipated circumstances may arise during the fiscal year that requires the City to enter into a contractual agreement for services not identified in the adopted budget. This includes new contract requirements, as well as contract amendments for additional scope of work and/or costs when the additional scope and/or costs are not consistent with items in the approved adopted budget.
When the scope of work and/or increased costs are inconsistent with the adopted budget, approval for the additional services must be obtained according to the following guidelines:
Amount Exceeding Adopted Budget
Great Park Contracts
Approval required
Any amount
Great Park Board Review and City Council Approval
Amount over Adopted Budget
City Contracts Up to $5,000
Approval required
No formal approval required
>$5,000 to $30,000 >$30,000 to $100,000
Director’s Approval
City Manager’s Approval
>$100,000
Finance Commission Review and City Council Approval
To request approval to enter into an unanticipated contract or contract amendment, a “Request for New or Revised Job Ledger Key Contract Limit” form must be prepared explaining the justification for the new contract or contract amendment and the funding source. The form must be approved in accordance with the limits set forth above and submitted to the Purchasing Agent. Funding for an unanticipated contract requirement must be secured in accordance with the Budget Adjustment Policy.
FY 2019-21 Proposed Budget
527
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