Managing Budgets
104.1 Policy
This relates to the carrying forward to the next year’s budget of any overspend or declared underspend against vired budget in the current financial year.
The responsibility for determining under/overspend carry forward amounts lies with budget holders.
The Business Unit Head is responsible for submitting all requests to the Section 151 Officer relating to services within their control.
A service for year end balances purposes is determined as a single page from the Council’s budget book.
The Section 151 Officer will inform Services as soon as possible after the completion of the Revenue Outturn for the year of the carry forwards to be actioned.
Directors will be informed of all carry forward underspends and overspends proposed to be agreed by the Section 151 Officer. Acting on the advice of the Section 151 Officer they will either agree or refuse the proposals and put their recommendations to Cabinet.
(click here for a blank copy of the Carry Forward Request form)
Planned year end Underspends
Planned underspending against a revenue service budget may be carried forward to the following financial year, subject to the following criteria.
-
The value of the underspend to be carried forward is limited to 5% of the gross budgeted service expenditure or income, whichever is the greater. Expenditure excluding capital charges and central recharges. Income excluding recharges. Also exclude any capital items charged to revenue/income.
-
The calculation is based on the total budget, by budget holder, as shown in the Council’s annual budget book.
-
The budget holder should offset any forecast underspends within their control against any forecast overspends.
-
The carried forward underspends are not used to amend the base budgets in future years.
-
Request for the carry forward of a net underspend is submitted to the Section 151 Officer by 31 March.
The operation of the underspends element of any carryforward is subject to the approval of the Section 151 Officer after examination of the Authority’s outturn for the financial year. When the actual outturn is known the Section 151 Officer may recommend that underspends are reduced in line with actual overspends.
All approved underspends from a financial year must be reported on in the Revenue Outturn report for the following financial year.
Planned year end Overspends
Overspends, not met through virement or specific Cabinet approval, must be carried forward and be a first charge on the new-year’s budget. Reasons for the overspend must be provided.
All overspends carried forward will be reported on in the following financial year’s Revenue Outturn detailing how it was addressed.
104.2 Agreement Process
The responsibility for determining under/overspend carry forward amounts lies with budget holders.
Planned year end Underspends
For net total underspends each Budget Holder can, if deemed appropriate, complete a Carry Forward of Year End Balance Certificate. Click here for the Carry Forward of Year End Balance Certificate. This should then be forwarded to the Business Unit Head of the service.
The Business Unit Head of the service has the authority to manage the over/underspends within the Unit and therefore may re-evaluate the carry forward request after discussion with budget holders within the Unit. The Business Unit Head is responsible for signing and submitting all requests relating to services within their control to the service finance team.
The service accountant should check the request for compliance with the policy and procedure and once satisfied sign the certificate/request. It should then be passed to the Section 151 Officer for approval.
The deadline for submission of all Carry Forward Certificates/requests relating to underspends to the S151 Officer for approval is 31 March. Sufficient time needs to be allowed for requests to be completed by this date. Any certificates/requests not submitted by 31 March will be rejected.
The Section 151 Officer will examine the Authority’s revenue outturn for the financial year and may recommend to Business Unit Heads that in view of the outturn it would be imprudent to carry the requested underspends forward.
If the actual underspend is less than was calculated and submitted to the Section 151 Officer, the carry forward underspend is limited to the actual underspend.
If the outturn results in a greater underspend than submitted to the Section 151 Officer, the carry forward underspend is limited to the amount submitted on the form.
Planned year end Overspends
For overspends the process is the same except that the 31 March deadline does not apply. The Business Unit Head is responsible for reporting the overspend, and the action agreed to address it, to Cabinet. A section is provided on the certificate for recording the meeting where the report to Cabinet was made.
General
The Section 151 Officer will inform Services as soon as possible after the completion of the Authority’s revenue outturn for the year of the carry forwards that have been approved.
No accounting entries will be made to carry forward balances prior to the Section 151 Officer’s approval.
The carry forward of under/overspends will be facilitated by use of the budget virement system.
| 
