What is the basis of budgeting?

Iowa’s budget is prepared on a modified cash basis that is used to establish and ensure compliance with enacted budgets according to applicable statutes and administrative procedures.  For each fund except for the General Fund, the total amount appropriated or budgeted to be spent may not exceed the fiscal year’s estimated revenues available plus the unappropriated surplus fund balance (or less a deficit) of the preceding year.  The fiscal year begins July 1 and ends on June 30.

For budgeting purposes, with the modified cash basis of budgeting, tax receipts are recorded at the time of deposit during the fiscal year, and during the accrual period are determined when earned and adjusted back to the appropriate fiscal year. All other receipts are deposited to the appropriate fiscal year in which the revenues were earned if received within 60 days after the end of the fiscal year; if received after those 60 days, they are recorded in the fiscal year received. For expenditures, statute requires that no payment for goods or services may be charged subsequent to the last day of the fiscal year unless the goods or services are received on or before the last day of the fiscal year, except that repair projects, purchase of specialized equipment and furnishings, and other contracts for services and capital expenditures for the purchase of land or erection of buildings or new construction or remodeling which were committed and in progress prior to the end of the fiscal year are excluded. In other words, except for the previously mentioned exceptions, the State must have received the goods or services on or before June 30, creating an actual liability.

Program Area
State Budget
Topic(s)
Modified Cash Basis

Printed from the Iowa Department of Management website on January 16, 2018 at 9:05am.