A budget is usually composed of contemplated expenditures. Sec. 111.003 LGC. But, since Sept. 1, 2003 it appears a county budget can include the creation of a "rainy day" fund, which in the current year is not an expenditure at all but rather a diversion of revenue during a "good" year to cover an expenditure in some later year (maybe when a tax increase would be unpopular). See e.g. sec. 111.014, 111.045, 111.075, LGC. Is such a reserve fund kept segregated from the general fund (which often accumulates amounts unexpended from prior years)? E.g., would such a reserve item "belong" to the department which originally creates it?

Departments don't "create" funds for a reserve; it's a function of either underspending a budget created by the commissioners court or the commissioners court's specific designation of funds for that purpose (such as a contemplated building project where the county wants to avoid issuing CDs, to use our county as an example). Couple that with a couple of other county-related factors. First, dedicated funds (e.g., assigned to and usable only by specific departments) exist only by virtue of, and are limited in their use by, explicit statutory authorization (such as the "hot check" fund, chapter 59 forfeiture funds, the sheriff's commissary account and fund available to the tax assessor-collector). Second, departments in a county have no greater authority than the county itself, which lacks authority unless a particular power is granted by the constitution or statutes. Similarly, unless a statute specifically segregates a fund or source for expenditure, county money comes out of (ergo, excess goes back into) the general fund. In the end, in any event, it is always the commissioners court that controls county funds and where they are to be spent, unless one of the exceptions mentioned above applies.