Effective Date: October 6, 2025

Approved by: Johnston County Board of Commissioners 

 

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1. Purpose

 

This policy establishes a standardized process for the preparation, submission, and review of annual budgets for all Johnston County Fire Service Agencies. It ensures financial transparency, accountability, and responsible fiscal planning.

 

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2. Policy Statement

 

All Johnston County Fire Service Agencies shall submit a completed annual budget to the Johnston County Fire Marshal's Office by March 15th each year. Submissions must include a completed budget template, year-to-date (YTD) expenses, and current fund balances. Each department must also adhere to established fund balance requirements and participate in the review process conducted by the Budget Committee.

 

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3. Budget Preparation Requirements

 

Each Fire Department must submit the following by March 15th:

• A completed Budget Template (see Section 5).
• A Year-to-Date Expense Report through the last day of February. Please include and explain any one time or unusual expenses that occurred from July 1-February 28.
• Also, include all estimated expenses for the remainder of the fiscal year (March 1-June 30). Please include and explain any estimated one time or unusual expenses you expect to incur during this time period, as well.
• A Current Fund Balance Statement, including operating and capital funds.
• Any additional documentation requested by the County Fire Marshal's Office.

 

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4. Fund Balance Requirements 

 

To ensure financial stability:

• Recommended Fund Balance: Departments should maintain a fund balance of $150,000 with a budget less than $1,000,000. For departments with a budget equal to or greater than $1,000,000, should maintain a fund balance of 15%.

Fund Balance represents the difference between an entity’s assets and its liabilities and shows the net financial resources available to a government entity for future expenditures. An entity’s fund balance is calculated by totaling all cash, investments and receivables and subtracting its payables and liabilities. It is not equivalent to an entity’s cash on hand.

Fund balance serves three primary purposes:

1. Provide sufficient cash flow to cover operating expenses
2. Serve as an emergency or “rainy day” fund
3. Function as a saving mechanism for anticipated capital expenditures

Fund balance that is meant to cover operating expenses is known as unrestricted fund balance. Designated fund balance would be funds set aside for capital projects or an emergency fund.

Departments below these thresholds must provide a written explanation and proposed corrective action plan. Departments above these thresholds can expect to use their fund balance to cover their operating budget.

Fund balance does not include restricted funds such as relief fund money and liabilities requiring a set amount of restricted fund balance

 

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5. Budget Template 

 

Each department must complete the standardized budget template linked below: 

https://www.johnstonnc.gov/files/ems/SampBudgetForm.xlsx

 

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6. Submission and Review Process

 

1. Submission Deadline: All documents must be submitted to the Johnston County Fire Marshal’s Office no later
   than March 15th.
2. Initial Review: The Fire Marshal’s Office will conduct an initial review for completeness and compliance.
3. Budget Committee Review: The Budget Committee, composed of 3 Fire Service representatives appointed by the Fire Commission Chairman, 2 representatives of the Fire Marshal Division, 1 representative from the Johnston County Finance Office, and 1 representative from the Johnston County Internal Audit Department. Ex officio members will include the Johnston County Board of Commissioners Fire Commissioner, Johnston County
   Emergency Services Director, Johnston County Emergency Services Deputy Director, and Johnston County Emergency Services Financial Operations Manager. Ex officio members are considered non-voting and do not count toward quorum. This committee will evaluate each budget for:

    

   1. Fiscal Responsibility
   2. Compliance with fund balance policies
   3. Alignment with operational needs and county priorities and/or policies

    

4. Feedback and Adjustments: Departments may be asked to revise and resubmit portions of their budget based on committee feedback.
5. Budget Presentations: Departments will be given an opportunity to present the proposed budget to the Budget Committee. These meetings will be scheduled and a specific time will be given to each department.
6. Budget Committee Recommendation: A recommendation of funding approval per department and the overall Fire Protection Service District will be sent to the County Manager and County Finance Director for consideration by May 1st.
7. Final Approval: The final recommended budget will be submitted to the Board of Commissioners for funding allocation and consideration of approval.

 

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7. Quarterly Review

 

At the end of each quarter, each department will submit the following documents below. The quarterly required documents to be submitted will be due by the end of each of the following months: October, January, April, and July.

• Balance Sheet
• Income Statement
• General Ledger Detail
• Bank Reconciliation for Each Month

All departments will submit these required documents for quarterly review to the Fire Marshal’s Office by the end of each month indicated above starting October of 2026. Any issues with implementing by October 2026 will be evaluated on a case by case basis. This section of the policy does not replace the requirements of the annual audit for each department that is required for the previous fiscal year.

 

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8. Non-Compliance

 

Failure to submit a budget by the March 15th deadline or non-compliance with the policy may result in delayed funding, additional oversight, or other administrative actions deemed necessary by the County.

 

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9. Policy Review and Revisions

 

This policy shall be reviewed annually by the Fire Marshal’s Office and the Budget Committee. Any updates will be communicated to all departments no later than January 1st each year.