The budget is a plan for the operations and finances of the fiscal year that is approved by the City Council and binding on the city’s bodies and divisions.
According to the Local Government Act, the Council must approve the next years budget and financial plan for at least the next 3 years by the end of the year. The budget year is the first year of the financial plan.
The budget and financial plan set the targets for service activities and investment projects and the funding and revenue for each item and project and specify how actual the operations and investments will be funded.
The budget includes the operational economy and income statement section, as well as the investment and funding section.
The city must comply with the budget in its operations and financial management. The City Council decides on changes to the budget.
As part of monitoring compliance with the budget, the City Board and City Council review the implementation of the operational and financial targets of the budget in a half-year report published annually in August or September.
The half-year report on the budget is prepared based on the situation as of 30 June. The half-year report includes a review of the actual performance of operational and financial targets in the first half of the year and an estimate of the entire year.
The contents of the municipality’s financial statements are defined in the Local Government Act. The financial statements include the balance sheet, profit and loss account, cash flow statement and attachments, as well as a comparison of the realisation of the budget and annual report. Municipalities which, together with subsidiaries, form a municipal group must also prepare and include consolidated financial statements in the municipality’s financial statements.
The financial statements must give accurate and sufficient information of the municipality’s financial performance and standing, funding and operations.
The fiscal year of the municipality is a calendar year, and the municipality’s financial statements must be prepared by the end of March of the following year.