FY2017 PROPOSED BUDGET

Washington Metropolitan Area Transit Authority
Proposed Fiscal Year 2017 Budget
Appendix C
• Quarterly financial reports are also prepared by OMBS and presented by Management to
the Board of Directors.
• These reports are used to monitor financial performance and ensure compliance with the
approved budget.
Budget Basis
The underlying financial statements guiding this budget process have been prepared in accordance
with Generally Accepted Accounting Principles (GAAP) Per the Governmental Accounting
Standards Board Statement No. 34 (Basic Financial Statements – and Management’s Discussion
and Analysis – For State and Local Governments), all financial information is consolidated into
business-type activities that make up Metro’s Enterprise Fund. These businesses-type activities
include transit operating and capital costs, infrastructure construction and debt activities.
The budget is also based upon the provisions of Generally Accepted Accounting Principles
(GAAP), as applicable to government entities in the United States of America. Annual budgets are
adopted in accordance with GAAP with the following exceptions:
• Depreciation and amortization are excluded, and
• Net actuarial determined post-employment benefit obligation recognized under
Government Accounting Standards Board (GASB) Statement No. 45, which was
implemented by Metro in FY2008, has been excluded from the budget expenses; such costs
are included in operating expenses in the annual financial statements but are not budgeted.
The annual budget is developed on the basis of two budget methodologies – Continuation-level
and Zero-based. Continuation-level budgeting is used to develop the funding and resources
necessary to sustain multi-year critical operating, special programs, and previously approved
capital projects. The agency switched from an Incremental to a hybrid Zero-based budgeting
approach for the development of the FY2017 Operating budget. The Zero-based approach was
used to determine resources for on-going general and administrative expenses, new programs and
capital projects. In accordance with the Financial Standards, OMBS monitors revenues and budget
expenditures throughout the fiscal year.
Metro’s Enterprise Fund
The Enterprise Fund is the sole fund for Metro. Within this Fund, income sources are classified in
one of six categories: passenger fares and parking revenues, federal funds, state and local funds,
business revenues, other sources and debt. Passenger fares and parking is the largest of the six
categories. Federal funds consist of Federal grants and funds to support the capital program. State
and local funds support the capital program, as well as debt service and the operating budget
subsidy. Business revenues include advertising and joint development, among other funding
sources.
Balanced Operating Budget
Metro is required to annually adopt a balanced operating budget where operating revenues and
subsidies equal expected operating expenses for the fiscal year. In accordance with Article VIII of
Metro’s Compact, the Board annually adopts a current expense budget for each fiscal year. Based
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