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Budget Basics 4. The Budget is a “Living Document” Original Budget • Adopted Annually by November 20th • Any point in the year Budget Amendments • Changing the budget for unplanned events during the year + Budget Transfers • Ex. Grant $ received, a new Capital Project is started, a planned project costs less than expected and extra money is re-allocated, etc. 5. The Budget is a PLAN Although shown in terms of money ($), no actual money has been, spent, moved, or “set aside” for the authorized purposes. All money remains in the bank accounts of the Town Appropriations is only an authorization to spend up to that amount If Revenues fall short of expectations, Appropriations need to be assessed for cutbacks or changes to funding sources such as being taken out of Fund Balance Encumbrance is the step between Appropriation and Expenditure. A contract or purchase order is entered into, reducing the appropriations available, yet money has not yet gone out the door 3