What must a CMFO do if they identify a potential over-expenditure?

When a Certified Municipal Finance Officer (CMFO) identifies a potential over-expenditure, the appropriate course of action is to notify the governing body and take corrective action to amend the budget. This approach is critical in maintaining transparency and ensuring that the municipality adheres to its financial obligations and legal requirements.

The identification of a potential over-expenditure signals a need for prompt action to address the deviation from the approved budget. By notifying the governing body, the CMFO ensures that the decision-makers are aware of the situation and can take necessary steps to approve amendments or adjustments. This could involve reallocating funds, reducing expenses in certain areas, or finding alternative funding sources.

Taking corrective action to amend the budget is crucial as it maintains the integrity of the financial management process and helps prevent further financial mismanagement or deficits. Ignoring the issue or waiting until the end of the fiscal year can lead to unmanageable financial consequences for the municipality and is contrary to best practices in municipal finance management. Properly addressing over-expenditures not only fosters accountability but also upholds public trust in the municipal finance system.