Finance Department Presentation 1/27/2014 1 Budget Terminology - - PowerPoint PPT Presentation

Finance Department Presentation

1/27/2014

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Budget Terminology (Basics)

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• State Fiscal Year – July 1 through June 30
• General Funds - consists of any revenues collected by the State that are not dedicated by law to a specific purpose.
• The individual income tax, retail sales tax, and State Lottery are the three largest sources of general fund revenue.
• Special Funds - consist of revenues collected by the State, the use of which is statutorily limited to certain purposes.
• Special funds may be derived from fees (e.g., car and boat registration and child support applications), taxes levied

for a specific purpose (e.g., State property taxes, motor fuel and vehicle taxes, and property transfer tax), local government payments for services, and gifts or donations.

• Federal Funds - are made available to State and local governments under programs administered by agencies of the

Unites States Government

• Reimbursable Funds - represent payments received by a State agency for services it provides to another State agency

Source: Department of Legislative Services, Legislative Handbook Series, Volume IV 2010

Budget Terminology (Basics cont.)

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• Request – Budget submitted to Department of Budget and Management for review

(usually October 1)

• Allowance – Budget submitted to Legislature by Governor through annual Budget Bill (3rd

week in January, per Maryland Constitution)

• Budget must be balanced - total estimated revenues must equal or exceed total appropriations.
• Revenues may either be General, Special or Federal Funds.
• Budget Reconciliation and Financing Act (BRFA) – BRFA is a separate piece of legislation

passed by the General Assembly in addition to the Budget Bill.

• To avoid legislating in the budget bill, it is used to implement a variety of actions, such as raising

revenues, altering statutory formulas and mandates, and transferring various monies in special funds to the general fund to allow their use for other purposes, such as balancing the budget.

• Often appropriations in the budget will be contingent on the enactment of a Budget Reconciliation and

Financing Act.

Source: Department of Legislative Services, Legislative Handbook Series, Volume IV 2010

Budget Terminology (Basics cont.)

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• Legislative Appropriation – Legislative Approved Budget (due seven days

before the expiration of legislative session)

• Determines the authority to spend in the upcoming fiscal year.
• Appropriation is synonymous with “authority.” It does guarantee revenue receipt, i.e.

anticipated grants may fall short of authority to spend.

• Working Appropriation (also known as the Budget Book Appropriation) –

Reflects any approved changes to the Legislative Appropriation

• Budget Amendment or Deficiency Appropriation may change legislative appropriation.
• Actual – Reflects closed fiscal year expenditures as well as approved

encumbrances and accruals.

Source: Department of Legislative Services, Legislative Handbook Series, Volume IV 2010

Budget Terminology (Mechanisms to Retain Appropriation)

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• Encumbrance – allows agency to carry over appropriation authority from

prior fiscal year into next fiscal year

• A service does not have to be rendered and an invoice does not need to be received.
• A purchase order must be in place and dated prior to next fiscal year in which

appropriation is carried over to.

• Review annually by DBM during fiscal year closeout to determine legitimacy.
• Accrual – also allows agency to carry over appropriation authority from prior

fiscal into future next fiscal year

• No invoice is received.
• Major distinction between an encumbrance and an accrual is that with an accrual the

service has already been rendered (e.g. a Medicaid recipient may visit a hospital in

• ne fiscal year and the Department of Health and Mental Hygiene may receive the

invoice in the next fiscal year).

Budget Terminology (Mechanisms to Alter Spending)

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• Budget Amendment – process allows an agency to change funding in the Working Appropriation.
• Reserved for one of the following reasons:
• the transfer of funds within an agency or department between work programs;
• the transfer of funds between agencies as specifically authorized by statute or in the budget bill;
• the utilization of additional federal or special funds with legislative review, as specifically authorized in the budget bill.
• Fund authority is available immediately following Governor’s approval.
• General Funds may not be created by a budget amendment.
• Deficiency Appropriation – Appropriation that may either increase or decrease working

appropriation.

• Typically submitted along with Budget Request
• Funding is not available until April and is subject to legislative approval.
• General Funds may be created by a deficiency appropriation.
• Supplemental Budget - permits the Governor to correct errors and omissions in the original

budget.

• Supplemental budgets are also used to reallocate funds deleted by the General Assembly.

Source: Department of Legislative Services, Legislative Handbook Series, Volume IV 2010

Budget Cycle

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Budget and possible deficiency appropriations are prepared and submitted to DBM (Oct- Nov) DBM reviews budget, conducts hearings with agencies (Oct-Dec) Governor formally submits budget to Legislature (3rd Wednesday in January) DLS reviews budget, Legislature conducts hearings with agencies (Jan-Mar) Budget is passed by legislature (83rd day of Session) Deficiency Appropriations are realized (April) Agency closes out current fiscal year. Retains appropriation with encumbrances or accruals. Reverts remaining

• appropriation. New fiscal

year begins. (July 1)

Budget Overview

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59.7% 22.7% 17.6% $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 FY11 FY12 FY13 FY14 FY15 Total

Total Appropriated Budget ($000's)

CCIIO Medicaid State Resources

Inclusive of $33.5M Deficiency

Budget Overview

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$232.75M $111.03M $0 $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000

FY12 Appropriation FY12 Expenditures FY13 Appropriation FY13 Expenditures FY14 Appropriation FY14 Expenditures Total Appropriation Total Expenditures

Appropration vs Expenses Through December 31,2013

State Resources Medicaid CCIIO

Budget Overview

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$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000

Total Xerox Various Noridian Maximus GP Strategies Eventus Berry Dunn

FY13 Encumbrances ($000's)

Budget Overview

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5.1% 3.4% 2.9% 1.4% 0.4% 8.3% 1.1% 4.4% 1.2% 2.8% Noridian, 84.8% 6.6% 8.6% Information Technology [PERCENTAGE]

Breakdown of Incurred Costs by Category Through December 31, 2013

Call Center Communications Connector Entities Consulting Intergovernmental Misc Operations Personnel Policy Training Noridian Xerox Other IT

Budget Overview

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$0 $50,000 $100,000 $150,000 $200,000 $250,000 Invoices Remainder of Contract Full Contract

Noridian Contract ($000's)

Paid Unpaid

FY 15 Budget

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$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 Operations Major IT Projects Total

FY15 Total Fund Budget By Budget Program ($000's)

CCIOO Medicaid Special Fund General Fund

FY 15 Budget

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35% 25% 22% 18%

FY15 Total Fund Budget By Fund Type

CCIIO Medicaid General Fund Special Fund

FY 15 Budget

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67% 21% 12%

FY14 Total Fund Budget By Fund Type (for comparison purposes)

CCIIO Medicaid General Fund

FY 15 Budget

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Details (Administration)

• Total FY15 funding for MHBE is $72M ($15.5M GF, $13M SF, $43.5M FF)
• $7M for 72 positions, funded by federal funds for July-December, special

funds beginning January 2015

• $3.6M for other administrative costs funded by federal for 6 months,

special funds beginning January 2015

FY 15 Budget

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Details (Grants)

• $8.6M for Navigator grants for both private sector ($3.1M) and Medicaid

($5.5M) enrollees

• $8.5M for Assister grants for both private sector ($4.9M) and Medicaid

($3.6M) enrollees

FY 15 Budget

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Details (Operations & Communications)

• $7.3M for consolidated service center contract for private sector ($2.7M) and

Medicaid ($4.65M)

• $3.2M for training contracts for private sector ($1.62M) and Medicaid

($1.54M)

• $1.7M for advertising/outreach contracts for private sector ($0.9M) and

Medicaid ($0.75M)

FY 15 Budget

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Details (Information Technology)

• $15.7M for Medicaid portion of IT systems development and operation ($5.4M

GF, $10.36M FF)

• $10.6M for IT systems development and operation for private sector funded

by federal funds (CCIIO)

• $5.9M for IT systems operations for private sector funded by State funds

beginning January 2015

Any Questions? Allan Pack, MPA Chief Financial Officer allani.pack@maryland.gov

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