The Role of the Finance Committee
The Finance Committee is the official fiscal watchdog for a town. Because it is difficult for all taxpayers to be completely informed about every aspect of a town’s finances, the Finance Committees were established so a representative group of taxpayers could conduct a thorough review of municipal finance on behalf of all citizens.
The primary duties of a Finance Committee are to advise and make recommendations to town meeting on the budget and other areas of municipal finance. It has statutory authority to make transfers from the town’s Reserve Fund to departmental budgets for extraordinary or unforeseen occurrences. It may approve with the selectmen some budget transfers during the last two months of fiscal year the first 15 days of the next year to close out the town’s financial records.
In addition to its research and advisory role at town meeting, the Finance Committee can play a vital role in the financial planning of the town. In some communities, the Finance Committee develops long-range revenue and expenditure forecasts, which are very useful in scheduling large capital acquisitions and identifying major changes in the operating budget of the town.