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Budget procedures

To: State Committee
From: Administrative Committee
Subject:  GRP Budget Procedures

For several years the GRP has been operating without an approved annual budget.  This creates some uncertainty about how much of our resources we can spend, and what spending priorities should be observed.  Recently AdCom decided that it was time to invest some energy in developing a budget with 2014 being the first budget year.  A set of budget procedures were adopted by AdCom to guide the budget development process.  The procedures call for AdCom to draft a 2014 budget in December  and for that budget to be brought to StateCom for approval at the January 2014 StateCom meeting.
The procedures adopted by AdCom are pasted below.

At the upcoming StateCom meeting, we will have a brief discussion of the budget procedures to make sure that StateCom understands what we are doing and that StateCom agrees to January 2014 as the meeting for approval of this budget.  In preparation for this discussion, we hope that all StateCom members will read the procedures below.

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[GRP Budget Procedures From AdCom Handbook]

4.2 Budget and Financial Procedures


4.2.1 Budget Overview


The GRP budget is a planning document that reflects the financial plans and priorities for the year.  The budget does not actually authorize disbursement of funds - AdCpom must approve disbursement.   But it is assumed that AdCom will routinely approve expenditures that are consistent with the budget and will give increased scrutiny to any items that are not in the budget.


Having an annual budget yields the following benefits:  1) The budget provides explicit spending priorities endorsed by AdCom and by StateCom, 2) The budget permits the Treasurer to make some routine disbursements without involving AdCom,  3) The GRP is able to spend a greater fraction of our available funds without the risk of inadvertently depleting our cash on hand,  4) Fundraising needs become clear which helps plan and execute our fundraising activities.


The GRP bylaws state that among the duties of the Treasurer is to:  " Ensure that the Green-Rainbow Party prepares a yearly budget."  It also states that the Fundraising Director shall "Ensure that the Green-Rainbow Party prepares a fundraising plan with the yearly budget".   In discussing the role of AdCom, the bylaws state " The co-chairs and treasurer may authorize financial expenditures that are not in the budget and have not been approved by the rest of the administrative committee if two of the three agree."


For several years prior to 2014, the party has operated without an approved budget or fundraising plan.  Starting in 2014, we will attempt to return to a more complete budget process.  To do so, AdCom has adopted the set of budget procedures provided below.


4.2.2 Budget Preparation


a) The Fiscal Year for the GRP shall run from January 1 to December 31.


b) In November of each year, AdCom shall invite comments from StateCom and the working committees regarding the budget for the coming year.  In December of each year, AdCom, in conjunction with the Treasurer and in consultation with the new officers elected at the State Convention,  shall adopt a budget for the coming fiscal year. 


c)  In support of the budget preparation process, AdCom, in conjunction with the Fundraising Director,  shall develop a fundraising prediction.  The fundraising prediction is used to obtain the expected revenue figures that will be used in formulating the budget.


d) The budget shall be balanced in the sense that incurring the planned expenses accompanied by the predicted revenues will not result in the cash on hand being depleted.  All items included in the balanced budget shall be called "first tier" items.  The budget may note second tier items that are not expected to be funded, but which will be given first consideration if fundraising exceeds expectations or if circumstances change.  Moving an item from second tier to first tier may require an update of the fundraising prediction.


e) After AdCom approves the budget, it shall be promptly submitted for review by StateCom at the winter StateCom meeting (normally held in January).  StateCom can make modifications to the budget by majority vote or can make requests to AdCom to consider modifications.  AdCom requests that any major additions to the budget to be voted upon by StateCom be submitted to AdCom at least three weeks before the StateCom meeting so that a budget impacts assessment can be performed prior to the vote.


f) AdCom may revise the budget at any time to take into account unforeseen events, to respond to a financial emergency,  or to respond to guidance from StateCom.


4.2.3  Disbursement of Funds


a)  As a standing procedure, the Co-chairs and Treasurer agree that, except for emergency situations where an immediate decision is needed, they will submit expenditure authorizations to the full AdCom and will abide by their decision.


b)  Requests for disbursement or reimbursement shall be made by submitting a form provided by the Treasurer.


c) AdCom may pre-approve the disbursement by the Treasurer of all or part of budgeted funds under certain budget line items.  [Note: This eliminates the need for AdCom to take a vote on some types of routine expenditures.]


d) Whenever an expenditure is made, the budget item against which it is drawn shall be identified by ID number.  The Treasurer is expected to track spending against the budget and notify AdCom if there is risk of premature exhaustion of the funds allocated to any particular line item.


e) Expenditures that exceed the budget allocation or which are not provided for in the budget may be authorized by the Treasurer if the Treasurer deems such expenditures to be necessary and the total amount of such expenditures in a given month is less than $150 and AdCom has not otherwise prohibited such expenditures.


f) AdCom makes a standing request that should any proposal before State Committee require the expenditure of more than $300, AdCom will be permitted to present a budget impact statement prior to the adoption of the proposal.


4.2.4 The Special Funds


a) The Treasurer shall establish and maintain the following special funds which are bookkeeping entries within the overall GRP accounting system:

         - GRP Candidate's Fund - to provide support to GRP candidates and to the party's electoral support efforts

         - GRP Participation Fund - to defray costs of participation in party events by low income members

         - Operating Reserve - to be available to address unforseen needs and opportunities


b) As provided for in the agreement between AdCom and CDLC, money placed in the GRP Candidate's Fund may be disbursed only upon a request from the Candidate Development and Legal Committee (CDLC).  Donations to candidates shall be made only to candidates who have received an endorsement or nomination.


c) Money placed in the Participation Fund may be disbursed by AdCom for the specified purposes of this Fund.


d)  It is the policy of AdCom to maintain the Operating Reserve with funds equal to 20% of anticipated annual expenditures, subject to disbursements as specified below and the ability to replenish the fund after disbursements.


e) Notwithstanding any other provisions,  money placed in the special funds (the GRP Candidate's Fund, Participation Fund, and Operating Reserve) may be transferred to the general funds of the Party only by a 3/4 vote of AdCom.

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commented 2013-10-19 17:58:58 -0400 · Flag
A couple of early observations, without the benefit of further discussion:

The timing of steps toward adopting a budget might need review. According to the draft, AdCom will invite input in November, will adopt/approve a budget in December, and will have it adopted by StateCom in January. At the same time, StateCom members are requested to submit any modifications/additions to AdCom’s approved budget three weeks before that January meeting. I don’t see how that timeframe can work.

Possibly later, it might be worthwhile to consider engaging in the budget process earlier (1) to avoid the holiday season, (2) to engage officers who have experience behind them rather than have it be the first order of business for new officers (assuming conventions continue to be held in November), and (3) to be ready to launch into the activities of a new year with an approved budget.

Regarding 4.2.4 e (transfers from Special Funds); I believe StateCom should also have authority to make transfers (by majority vote?).