University of Missouri Extension

DM4001, New November 2007

Rules for Missouri Townships


Parenthetical numbers in the text refer to sections of the current Revised Statutes of Missouri, abbreviated as RSMo.

X. Budgets and the budget process


Not a single cent of public money may be spent until a budget has been formally adopted following procedures set out in the statutes (67.010). According to the statute often referred to as the budget hammer rule: "No expenditure of public moneys shall be made unless it is authorized as provided herein" (67.080).

This is very clear. Unless there has been a formal resolution to adopt, accepted by a majority vote of the board, no funds can be spent. Though there are no budget police inspecting to make sure that every one of the state's political subdivisions complies, these requirements can still be enforced.

For example, some years ago, Fayette had no city budget and one cantankerous citizen. The citizen filed suit. The court only had to glance at the law before freezing all of Fayette's city income and outgo. They couldn't pay city employees. They couldn't pay bills. They were put on hold. Quickly they scratched down some figures and gave them to the judge. He was not impressed. Step by step, they had to go through all of the statutory procedures. Almost every entity, even a township, has one cantankerous citizen.

Budget officer

Every political subdivision must designate someone as budget officer (67.020), and that person must prepare a proposed budget for the board. Logically, this should be the clerk. Everyone connected with the township must furnish to the budget officer any facts or figures requested. After a draft is prepared, it is given to the board. They may, as is often necessary, give back the draft budget for revisions before they adopt it (67.030).

Budget contents

At a minimum, the budget must have five elements:

Notice that much of the budget will be based on previous years' numbers and the budget officer's best estimates. How much revenue will come in is not known. Even the current year's totals are not yet complete. The last solid figures are from two years ago. This year is not yet done, and next year is an educated guess. Budgets, because of this, are subject to revision as the budget year progresses. Neither the budget officer nor the board can anticipate everything that will happen months from now.

Forms to follow for budgets are available from the state auditor's office. However, these may be more complex than townships will want, since they are designed for more complicated operations. Designing your own simple form is quite acceptable. (See sample PDF budget outline.)


Any increase in spending over what has been budgeted during the course of the year must be approved by board resolution (67.040). The resolution must, statutes say, "set ... forth the facts and reasons making the increase necessary ..." Internal transfers may be made, such as general revenue for roads and bridges, as long as the changes do not put the budget out of balance. Total spending can be no more than revenues received plus any balance on hand at the year's beginning.

Financial statement

Financial reports

The Office of Missouri State Auditor’s Web site provides a financial statement form online at under “Local Government.” It is provided as an electronic form (Microsoft Excel) or as a paper version (PDF).  Only the township inventory must be added. (See sample PDF forms for Financial statement and instructions and Township real estate and equipment inventory record.)

Two statutes require the township to file a financial statement (105.145 and 231.280). Found in completely different sections of the statutes, each has slightly different requirements. Combined, the requirements are:

Keeping documents

Documents related to the budget must be kept on file for three years. These are public records, open to being viewed on request by anyone during reasonable times (67.060).

Fiscal year

The township fiscal year must match that of the county. This means all township counties must use the calendar year as their fiscal year (231.280).

Failure to adopt

Should the board fail to adopt a budget by the start of the township's fiscal year, the last-adopted budget remains in effect until the board approves a new budget. This means spending for whatever purpose cannot exceed that of the last budget (67.070).

Long-term and lease purchases

The township board cannot obligate its successors in office. Any purchase in an amount greater than the year's anticipated revenue plus balances on hand requires voter approval of a bond issue. To pass a bond issue requires an exceptional majority, usually by two-thirds of the voters, and becomes a lien against all taxable property in the township.

Many public entities dodge the bond issue requirements by using lease-purchase arrangements. Such an agreement must be cancelable by a new board when elected, even if the members do not change. This puts the vendor at additional risk, which usually is factored into the price quoted. Use this with caution.

DM4001 Rules for Missouri Townships | University of Missouri Extension

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