What happens to the budgets of all funds at the end of the budget year?

At the end of the budget year, the budgets of all funds are closed out. This means that any unspent funds or remaining balances are reconciled, and the accounts are settled. Closing out the budgets is a crucial step in the financial process, as it allows municipalities to assess their financial standing, ensure all expenditures and revenues for that fiscal year are accounted for, and prepare for the next budget cycle. This process also helps in providing a clear financial picture, which is important for transparency and accountability in managing public funds. By closing out the budgets, municipalities can also identify any areas of overspending or underspending, which can inform future budget planning and adjustments.