Financial Structure and Management
In accordance with the City Charter and Code of Ordinances, the Financial Services Division is
responsible for establishing an accounting and internal control structure designed to ensure that
the City’s assets are protected from loss, theft, and misuse, and to ensure that adequate accounting
information is maintained and reported in conformity with GAAP. The internal control structure
is designed to provide reasonable, but not absolute, assurances that these objectives are attained.
In providing these reasonable assurances, it is recognized that the expenses related to the cost of
control should not exceed the benefits and the valuation of costs and benefits requires
management’s judgment.
Budget Control Charter Amendment
By way of background, in 1993, Nashua voters passed a Budget Contro] Charter Amendment,
(also referred to as a Spending Cap) that limited the budget to an increase of no more than the
average annual consumer price index (CPI-U) over the past three years.
On February 12, 2018 the budget limitation provisions of the City Charter were found to be
unenforceable by the Hillsborough County Superior Court Southern Judicial District. This decision
was appealed to the New Hampshire Supreme Court. On July 2, 2019, the New Hampshire
Supreme Court upheld the decision of the Hillsborough County Superior Court Southern Judicial
District.
As part of the 2021 Legislative Session, the Spending Cap was reinstated and became effective on
August 26, 2021.
Appropriating Authority
The Board of Aldermen is the Appropriating Authority for the City of Nashua. From a budgetary
control perspective, management cannot overspend its approved and authorized budget without
gaining approval from the Board of Aldermen. In addition, the Board of Aldermen must approve
all interdepartmental transfers as well as the transfer of appropriated funds within departments
from non-salary accounts to salary accounts. The City also maintains a system of encumbrance
accounting to further control budgetary expenses.
Minimum Unassigned Fund Balance
The City has an ordinance stating that its policy to maintain a minimum unassigned general fund
balance of 10% of the fiscal year appropriations. If a portion of unassigned general fund balance
is used to offset property taxes in any given fiscal year, it is the policy of the Board to replenish it
to the 10% level within a three-year period.
