Within the Department of Finance and Administration, the Division of Budget is responsible for budget development. Preparation, deliberation, and execution of the budget is a continual process throughout the year. This process regularly involves the legislative and executive branches, with occasional counsel from the judicial branch. The following chart indicates the participants in the budgetary process and an approximate time schedule.
|Planning and Estimation||
|Preparation of the Budget||Budget Division||October-January|
|Legislative Deliberation||General Assembly||January-May|
Planning and Estimation
Immediately after a new fiscal year begins each July, the staff of the Division of Budget begins making plans for the budget that will be considered by the General Assembly for the subsequent fiscal year.
Automated forms and instructions are distributed to the agencies in August. The deadline for completion and transmission of the budget requests is the first of October. During this preparation period, the staff of the Division of Budget continually meets with the agencies' fiscal and program personnel to answer questions and provide assistance in developing their budget requests.
Preparation of the Budget
After the receipt of agency budget requests, analysts with the Division of Budget begin the process of balancing expenditures against estimated revenues. Within this constraint, funds must be provided for Administration initiatives of high priority, activities that must be sustained as mandated by state or federal statute, and the day-to-day operation of state government.
Following analysis of the requests by the Division of Budget, detailed recommendations are made to the Commissioner of Finance and Administration. Meetings are convened with commissioners and directors of the departments and agencies by the Commissioner of Finance and Administration. A consensus is sought with the agencies as to the appropriate funding level for the upcoming year. The Governor and the Commissioner of Finance and Administration review the recommendations resulting from these hearings and consider necessary alterations to fit within the scope of the Administration's initiatives. After recommendations have been finalized, the staff of the Division of Budget prepares the Budget Document for printing.
After the Budget Document and Budget Message have been presented, the appropriation process is initiated. The Appropriations Bill, prepared by the Department of Finance and Administration, is introduced and referred to the Finance, Ways, and Means Committees of both houses of the Legislature. The Senate and House of Representatives must ultimately pass the exact version of the Appropriations Bill for it to be enacted into law.
When passage of the Appropriations Bill is complete and it is enacted into law, the execution of the act begins. Invariably, there are changes from the Budget Document as presented by the Governor to the General Assembly and the Appropriations Act that is adopted. Analysts of the Division of Budget and fiscal personnel in the departments and agencies have the responsibility of reconciling the approved Appropriations Act with the Budget Document. This may involve increases or decreases to agencies' and divisions' allotments. The Division of Budget establishes an annual allotment for each agency and division using the reconciled Appropriations Act. The agencies and divisions spend against these allotments in the upcoming fiscal year.
Budget execution is a process that continues throughout the fiscal year. In addition to the daily review of numerous operational and personnel transaction requests, the budget analysts must assure that legislative intentions of the Appropriations Act are being complied with and carried out by the various departments and agencies.
Throughout the fiscal year, the Budget Division staff reviews the status of the various allotments and advises the Commissioner of Finance and Administration of any problems. At the end of the fiscal year, the Division of Budget has the responsibility of executing revisions to the annual allotments as a function of the closing process.
The financial statements of the State of Tennessee are prepared in conformity with generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board (GASB).