A newly appointed finance director for Knoxtown will have many issues to review and resolve. Budget strife, reduction in service levels, loss of personnel, and reductions in benefits as well as no recent raises are disconcerting to everyone. An attempt to explain the politics and problems as well as solutions to a public budget and finance can be difficult and lengthy. There are many challenges to address as well as explanations of roles played and revenue sources. While the budgeting process is complicated, it should be understandable to everyone. There are three distinct, however not unique challenges in public finance and budgeting. Policies are one of the challenges as they are often times written in a language that politicians feel solves …show more content…
125). Preparation, approval and implementation are the main steps in the development of public budgets. First the preparation must be begin with the issuance of instructions from the executives, followed by the development of department budgets by the department managers. Once all departmental budgets are completed, they are sent to the central budget office for final review and revision before being sent to the elected officials for approval. Approval is issued by the elected officials after any necessary deliberations take place. Once approved by the elected officials, the budget is considered law and must be followed. The next step is implementation. The budget is constantly implemented as funds are released over the course of the year, reviewed for appropriate use and to verify the budget is in line with projections. Finally the budget must be reviewed at the end of the year by the budget office. A comparison is made between actual figures and budgeted figures. The information gathered in this final step is used in helping to determine future budgets (Bartle, Hildreth, & Marlowe, 2013). There are two major challenges to balancing public budgets. The many actors (e.g. CEO, CFO, department heads, staff, etc.) involved in the development of a public budget and span many departments, and many units in one department making the meeting and negotiating process difficult. Due to the many constraints of policy and the law, the budget process can be long and arduous with four steps stretched into many. These are a few of the many challenges involved in developing a balanced public
In 1996 the city of Cleveland began a $750 million Plant Enhancement Program. The program’s goal was to renovate and modernize the city’s four water treatment facilities, which are among the 10 largest in the US, and were built in 1856; over 500 million gallons of water are pumped to Cleveland residents daily. In the following paper I attempt to provide with an overview of the Baldwin
The budget process is a powerful planning tool for government to make important resource decisions. According the Carney and Schoenfeld‘s article on How to read a Budget, an operating budget is a reflection of government’s financial plans. When a budget is
For the example in this memo, I will be focusing on the funding of educational programs. As you are aware, 38% of the property taxes fund school programs such as athletics, arts, and all day kindergarten. Due to the great recession, property values here in the Knoxtown area were greatly affected and a majority of properties lost nearly 50% of their assessed value. A significant portion of our constituents also lost their homes. Due in some part to these two factors, our projected revenue was not met. The overall revenue for the city was down 42% resulting in a serious budget shortfall. The loss of these property taxes resulted in the cutting of many school programs. The children of our constituents not have fewer athletic and arts programs to choose from as well as eliminating full day kindergarten for the next term. If corrections to the budget are not made, some bus services and reduced lunch programs will also be eliminated.
First and foremost , there are four main characteristics that defines a public budget. The first characteristic involves organizations and individuals with different views and goals trying to get a share of the budget. Second, public budgets are open to the environment, citizens, interest groups, press and politicians while
This research paper is a brief discussion of budget management analysis. Budgeting is the key to financial management, and is the key to translates an organization goals or plan into money. Budgeting is a rough estimate of how much a company will need to get their work done, and provides the basis for evaluating performance, a source of motivation, coordinating business activities, a tool for management communication and instructions to employees. Without a budget an organization would be like a driver, driving blinded without instructions or any sense of direction, that’s how important a budget is to every organization and individual likewise (Clark, 2005).
Capital planning and budgeting is a very vital piece in the Public Budgeting System process. It is an essential implement in the financial management practice and is effective in both public and private organizations. It is the method which consists of the determination and the evaluation of the investments and the possible expenses by an organization. As explicate by Lee, Johnson, & Joyce (2008), capital budgets help in determining how much of each form of investment is needed, and it supports an organization in assessing the available revenue which includes loans is required to finance those investments (p. 475). Capital budgeting is a central part of the universal
Irene Rubin’ view that public budgets are not merely technical managerial documents and that they are also intrinsically and irreducibly political is because public budgets reflect the choice of government. As a general rule of thumb, government chooses to go along with programs that fit their own political agenda. Programs should reflect a general consensus about what kind or
The budget process for each year begins by examining how much was spent each month. For each month, a budget is created for the following year. Staff members at the unit level impact the budget with supply usage.
Budgets should not be a managers task only. The whole organization should be involved in the budgeting process.
In outlining a budget there are two phases that must be determined to create a budget, an operating phase and a financial phase. “Developing a new operating budget starts with examining budgets from previous years and identifying what components are going to change, by how much and if any new components need to be added or existing ones reduced or cut” (Budget Challenges, 2012). In the first phase of the budget it needs to be determined how much money is going to be needed to operate the day to day activities of the business.
The budget process is the most important aspect of fiscal decision making in Public Administration. Smith and Lynch (2004), argues that “Public budgeting is an activity that many people view from their own perspectives and, thus, they do not comprehend the full complexity of budgeting” (p. 34). Similar to the contextual definition of complexity in budgeting process, a classic example was the State of California’s budget impasse for the year 2010-2011. This essay examines and analyses the concerns that lead to passing a late budget in the State of California. It further goes into details regarding the reasons, resolutions, and consequences faced due to the budget Impasse.
1. (TCO A) One of our lectures discusses the budget execution stage of the budget cycle. Please identify and explain each of the major steps in the budget execution process. (Points : 25)
The budgeted income statement, cash flows, and balance sheet follow in order. The income budget relies on the revenue and expense forecast from the operating budget, while the budget cash flows are planned for financial and investment activities. A final component of the budget process, the projected balance statement, can be used to tie in all the budgeting dependencies. Once a budget has been prepared, evaluation can be expected before approval. Budgetary components may require several iterations before finalizing the organizational budget.
Budgeting is the systematic method of allocating financial, physical, and human resources to achieve an organization’s strategic goals. Budgets are utilized by for-profit and non-profit organizations to monitor the progress towards the goals, assist in the control of spending, and help predict cash flow for the organization.
Budget and budgetary control practices are undeniably indispensable as organizations routinely go about their business activities and operations. These organizations are constantly on the alert on how actual levels of performance agree with planned or budgeted performance. A budget expresses a plan in monetary terms. It is prepared and approved prior to a particular budgeted period and explicitly may show the income, expenditure and the capital to be employed by organizations in achieving their goals and objectives.