Reference Number: 
CTAS-729

A best method for projecting fund balances and reserves for the current fiscal year (which will be used as the beginning balances for the next fiscal year), is shown as follows:

Available fund balance (from previous audit)

+ Estimate adjusted current year revenues

= Total estimated available funds

- Estimate adjusted appropriation (expenditures)

= Estimate current year ending fund balance

NOTE:

* The effect of legally restricted funds (beginning plus revenues) minus expenditures should be considered.

One should examine every line-item revenue and expenditure account. Each should be reviewed and adjusted to reflect the current budgetary conditions. After making these calculations, there will be a better understanding of the current budget and the best estimates of the beginning balances.

This formula calculates an ESTIMATE only. The calculation may or may not take into consideration reserves and designated fund.  The calculation should be performed periodically during the development of the budget.

Sample of a fund balance formula.

Recommended Practice: Periodically during the budget development process, estimates should be prepared to reflect the projected ending fund balance.  This calculation should be for each fund.