Financial policies serve as the guiding principles for the County’s financial management and annual budgetary process. Generally, financial policies are desirable in order to maintain or improve an entity’s financial position, financial management and credit rating(s). The County’s financial policies will comply with applicable state statutes.
It is the policy of the Board of County Commissioners (BOCC) that all financial transactions conducted by or on behalf of Johnson County, its agencies, departments, officials and authorized agents shall be made in a manner and method that efficiently and effectively utilizes available financial resources and demonstrates good stewardship in the management of public funds and resources according to established financial management practices, accounting standards, and auditing requirements.
The financial policies adopted by the BOCC shall apply to all elected officials, employees, agencies, departments, boards, commissions, representatives, and authorized agents in the performance of their official duties for or on behalf of Johnson County Government.
The County’s fiscal year is January 1st to December 31st.
It is the policy of the BOCC that:
For financial reporting purposes according to generally accepted accounting principles, all unencumbered appropriations lapse at the end of the year.
The Director of Treasury and Financial Management is responsible for establishing a solicitation and selection process for securing professional auditing services from an independent certified public accountant. Goals of the solicitation and selection process shall include encouraging participation from qualified service providers and securing services at competitive prices.
It is the policy of the BOCC that the County Manager shall establish and maintain financial procedures. These procedures shall be consistent with existing financial policies and will comply with applicable state statutes. In addition, these procedures shall apply to all elected officials, employees, agencies, departments, boards, commissions, representatives and authorized agents in the performance of their official duties.
The BOCC may initiate changes to the existing financial policies at any time. In addition, the County Manager shall review the County’s existing financial policies on a periodic basis. If changes to the existing financial policies appear to be necessary and appropriate, the County Manager shall submit a recommendation to the BOCC for consideration and action.
The basis of accounting used for preparation of the County’s annual operating budget and CIP is different from the basis of accounting used to prepare the County’s annual audited financial statements.
The term “basis of accounting” is used to describe the timing of recognition for financial transactions—i.e., when the effects of transactions or events should be recognized. The basis of accounting used for purposes of financial reporting in accordance with GAAP is not necessarily the same basis used in preparing the annual operating budget document.
Basis of Accounting for Financial Statements
The modified accrual basis of accounting is used for governmental funds. Under this basis of accounting, revenues are recognized when the revenues are both measurable and available to finance expenditures of the current fiscal period. “Measurable” means the amount of the transaction can be determined, and “available” means collectible within the current period or soon enough thereafter to pay liabilities of the current period. Expenditures are generally recognized in the accounting period in which the fund liability is incurred, except for unmatured interest on general long-term debt, which is recognized when due.
The accrual basis of accounting is used for proprietary funds. Under this basis of accounting, revenues are recognized when earned and expenses are recognized when liabilities are incurred.
Basis of Accounting for Annual Operating Budget
The modified accrual basis of accounting is used for governmental funds, with the following exceptions:
The accrual basis of accounting is used for proprietary funds, with the following exceptions:
Open encumbrances for outstanding purchase orders do not lapse at the end of the fiscal year and continue as an obligation of the prior year budget.