FAS-021 - Budget Monitoring Policy 2026City of Saint John
Budget Monitoring Policy
Title: Budget Monitoring Policy
Subject: Budget Monitoring Policy Category: Finance and Strategic Services
Policy No.: FAS-021 M&C Report No.: 2026-226
Effective Date: 2026-10-05 Next Review Date: 2029-10-05
Area(s) this policy applies to: Cross Corporate Office Responsible for review of this Policy:
Finance and Strategic Services
Related Instruments:
FAS-001 Asset Management Policy
FAS-002 Investment Management Policy
FAS-003 Operating and Capital Reserve Policy
FAS-004 Operating Budget Policy
FAS-005 Capital Budget Policy
FAS-006 Debt Management Policy
FAS-007 Wage Escalation Policy
FAS-020 Long Term Financial Plan Policy
Policy Sponsors:
Chief Financial Officer
Document Pages:
This document consists of 7 pages.
Revision History:
Common Clerk's Annotation for Official Record
Date of Passage of Current Framework:
I certify that this Policy was adopted by Common Council as indicated
above.
October 5, 2026
Date
Common Clerk
Date Created:
2026-10-05
Common Council Approval Date:
2026-10-05
Contact:
Finance and Administrative Services
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TABLE OF CONTENTS
1. PURPOSE AND CONTEXT...................................................................................................................................3
2. POLICY STATEMENT ...................................................................................................................... 3
3. DEFINITIONS ................................................................................................................................ 5
4. PRINCIPLES ................................................................................................................................... 5
5. POLICY APPLICATION .................................................................................................................... 6
6. ROLES AND RESPONSIBILITIES .......................................................................................................... 7
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Budget Monitoring Policy
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1. PURPOSE AND CONTEXT
1.1. Common Council adopted a rigorous Long Term Financial Plan focused on achieving structural
self-sufficiency, decreasing long-term liabilities, and systematically reducing infrastructure
debt.;
1.2. The Budget Monitoring Policy enhances budget accuracy, accountability and cost control by
ensuring budget allocations are managed and adhered to;
1.3. The Budget Monitoring Policy enhances fiscal responsibility and financial flexibility by
integrating budget monitoring practices with the City's Reserve fund, Debt Management
strategies and Operating and Capital budget policies;
2. POLICY STATEMENT
2.1 The City shall implement standardized financial monitoring to track performance against the
annual approved budget;
2.2 The Budget Monitoring Policy objectives are as follows:
2.2.1 No expenses shall be incurred which are not approved by Council unless it is unavoidable
and pre-approved by Chief Financial Officer;
2.2.2 Personnel and non-personnel budgets shall be managed separately;
2.2.3 Increase operating budget transparency & performance management;
2.2.4 Increase budgeting accuracy by ensuring annual operating expenditure match
forecasts and predefined Council approvals;
2.2.5 Increase financial control to ensure resources are funded and spent in a fiscally
prudent manner;
2.2.6 Provide enhanced fiscal oversight and support a strategic corporate lens
throughout each fiscal year;
2.2.7 Increase financial flexibility by integrating reserve strategies with the annual
budget monitoring process;
2.2.8 Increase administrative efficiency by reducing budget lines with an annual
budget under $1,000 or as established by Chart of Accounts Governance
document.
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2.3 Revenue budgets shall be carefully monitored with particular attention to:
2.3.1 Seasonality, and whether comparable to prior observations;
2.3.2 Any potential volatility and the resulting impacts;
2.3.3 Trends and comparison to past 3 years’ actuals and previous year budget;
2.3.4 One-time sources and timing of receipts;
2.3.5 Relationship with economic indicators;
2.3.6 Changes in policy or practice of overarching governments involved in
disbursement of revenues;
2.3.7 Review of patterns at other similar/related governments.
2.4 Expenditure budgets shall be carefully monitored with particular attention to:
2.4.1 Wages and Benefits (Personnel) - Examine additional details beyond just regular
payroll expenses, including hiring and vacancy information, analysis of part-time,
overtime, leave pay out and special pay, as well as whether fringe benefit costs are
within budgeted expectations;
2.4.2 Goods and Services (Non-personnel) - Monitoring needs to include more than just
current expenses, but also encumbrances, outstanding purchase orders, and major
contracts to develop a better picture of not only what was spent, but what remains
to be spent;
2.4.3 Service Outcomes - Determine if services are being provided as budgeted and if
additional services have been provided that were not anticipated, in addition to
trends observed that may impact whether or not spending remains on track;
2.4.4 Performance Measures - Examine performance measures and linkages to financial
outcomes. The analysis should include any changes to goals/initiatives from budget
adoption and are there any new initiatives not initially included in the budget;
2.4.5 Root cause - move beyond just identifying deviations from budget versus actuals
and work towards analyzing why deviations occurred.
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3. DEFINITIONS
3.1 Personnel Costs - means the total wage and benefit costs for internal resources (including
benefits);
3.2 Non-Personnel Costs - means the total amount of annual expenditure spent on goods
and services;
3.3 Surplus - means an approved annual budget amount is greater than the actual spends within
a particular category;
3.4 Deficit - means an approved annual budget amount is less than the actual spends within a
particular category.
3.5 Unapproved Budget Line/Code – means any general ledger account, cost centre, or object code
that has not received explicit annual Council approval or authorized appropriation for the current
fiscal year.
4. PRINCIPLES
4.1 Recognize in principle that all budget surpluses and deficits are non-recurring in nature and
should be treated as such;
4.2 Budget surpluses and deficits considered to be recurring shall be permanently adjusted for
in the following year’s operating budget;
4.3 Operating Budget surpluses for Wages and Benefits are not intended to subsidize Goods and
Services;
4.4 Operating Budget surpluses for Goods and Services are not intended to subsidize Wages and
Benefits;
4.5 Operating Budget surpluses for Wages and Benefits are appropriate to reallocate to Goods
and Services when a staff vacancy generating the surplus requires third-party contracted
services to maintain the service level for that particular role;
4.6 Revenues and Grants intended for resourcing programs (human resources) will not be spent
on Goods and Services;
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4.7 During the annual budget preparation process, service areas should review the past 3 to 5 years
of actual expenditures and identify and isolate non-recurring, unapproved, or emergency
spending so that the new budget remains accurate and realistic. To satisfy objective 2.2.8,
individual line items under $1,000 (subject to future Chart of Accounts Governance document)
should be avoided to minimize administrative processing, variance reconciliation costs, and
system fragmentation.
5. POLICY APPLICATION:
5.1 Personnel budgets are not intended to subsidize non-personnel budget; therefore, surpluses
occurring in wages and benefits shall not be reallocated to offset budget deficits in goods
and services unless supported by a business case and approved by the Chief Administrative
Officer and the Chief Financial Officer;
5.2 Non-personnel budgets are not intended to subsidize personnel budgets; therefore,
surpluses occurring in goods and services shall not be reallocated to offset deficits in Wages
and Benefits unless supported by a business case and approved by the Chief Administrative
Officer and the Chief Financial Officer;
5.3 Aggregate Wage and Benefits surpluses will be applied to the Operating Reserve until the
Operating Reserve is fully financed in accordance with FAS-003 - Operating and Capital
Reserves Policy; all surpluses thereafter will be applied fifty percent to the Capital Reserve
and fifty percent to the City's Long Term Debt Obligations;
5.4 Aggregate Goods and Services surpluses will be applied to the Operating Reserve until the
Operating Reserve is fully financed in accordance with FAS-003 – Operating and Capital Reserves
Policy; all surpluses thereafter will be applied fifty percent to the Capital Reserve and fifty
percent to the City's Long Term Debt Obligations;
5.5 All departmental and service area surplus and deficit positions shall be analyzed annually to
determine if permanent budget adjustments for the following year are necessary;
5.6 As part of the annual operating budget process, service areas will identify one-time
operating expenditures and submit proposals to fund the one-time expenditure using
Reserve Funds as per FAS-003 - Operating and Capital Reserves Policy;
5.7 To support objective 2.2.1, no actual expenses or transactions shall be processed against any
unapproved budget code unless it is preapproved by the Chief Financial Officer;
5.8 To support objective 2.2.8, budget lines with an annual budget under $1,000 or as established
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by Chart of Accounts Governance document will be tracked together as a combined single
group at the department level rather than as separate individual items. Service areas must work
to systematically merge and eliminate these micro-lines during the annual budget preparation
process;
5.9 Annual budget preparation must be driven by combining the current year's approved budget
parameters with the actual expenditures of the immediate past 3 fiscal years, balanced against
the service area trend adjustments outlined in clause 4.7;
5.10 The Chief Administrative Officer and Chief Financial Officer shall make any
recommendations respecting the use of Reserve Funds as part of the Annual Operating Budget
Process and shall be in accordance with the Long-Term Financial Plan.
6 ROLES AND RESPONSIBILTIES
6.1 Council shall:
6.1.1 Approve the Budget Monitoring Policy.
6.2 Finance Committee shall:
6.2.1 Recommend the Budget Monitoring Policy to Common Council for approval;
6.2.2 Review any changes to the Budget Monitoring Policy in the future.
6.3 The Chief Financial Officer shall:
6.3.1 Review annually to ensure that Wages and Benefits vs Goods and Services allocations
are in compliance with the Budget Monitoring Policy;
6.3.2 Recommend any changes to the Budget Monitoring Policy in the future;
6.3.3 Design an analysis framework that will monitor surplus and deficit positions.