Process Overview

 The County will maintain a fund balance in the General Fund in accordance with generally accepted governmental accounting principals and North Carolina law.

 The County will maintain an unreserved, undesignated General Fund balance adequate to meet the unexpected fiscal needs of County operations to permit orderly adjustment to changes resulting from fluctuations of revenue sources.

Statutory References and Authoritative Guidance

N.C. General Statute 159-26

N.C. General Statute 159-34

OMB Circular A-133

Government Accounting Standards Board

N.C. Local Government Commission

Accounting System

Annual Independent Audit

Internal Control Requirements

Pronouncements

Fund Balance Guidelines

Significant Policies

Through good fiscal management, the General Fund undesignated fund balance will be maintained at a level sufficient to provide for the resources to meet operating cost needs, to allow for unforeseen needs of an emergency nature and to permit orderly adjustment to changes resulting from termination of revenue sources.

The target range of the General Fund unreserved fund balance to General Fund expenditures will be 12.0% to 14.0%.

Based on the recommendation of the N.C. Local Government Commission, Mecklenburg County will maintain 8% of the subsequent year's budget in the unreserved, undesignated fund balance.

Fifty percent of any amounts remaining in the fiscal year-end unreserved, undesignated fund balance in excess of 8% of the approved subsequent year's budget will be allocated to the Pay-Go Fund for capital projects.  (See the County's Debt Management Policy)

The remaining fifty percent of the unreserved, undesignated fund balance over the 8% of the approved subsequent year's budget shall be designated for subsequent years' expenditures and shall be maintained by the Director of Finance in a separate interest bearing account.

This second fifty percent, along with any interest earned thereon, shall be available for appropriation by the Board of County Commissioners in a subsequent fiscal year to fund needs in a period of revenue shortfall.

Procedures
            
Projections of the General Fund expected year-end fund balance will be performed monthly to insure an adequate fund balance will be available at year end so that the unreserved, undesignated fund balance will be maintained at 8% in accordance with the guidelines of the Local Government Commission.

The allocation of the fifty percent of any excess fund balance above the 8% required will be calculated and reserved for the Pay-Go Fund during the completion of the fund balance work for reporting in the Comprehensive Annual Financial Statements and will be designated for Pay-Go in the Fund Balance Footnote.

The remaining fifty percent of any excess fund balance above the 8% will be invested retroactive to July 1.

If you have any additional questions that are not addressed, please email Alan.McBrayer@MecklenburgCountyNC.Gov for a detailed response.  Please reference the Finance  Department web page in the subject line of your message.