Preparation of Agency Budget Requests
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Preparation of Agency Budget Requests Review of Budgets Balancing the Overall Spending Plan Managing Budget Execution Audit & Evaluation. BUDGET METHODS AND PRACTICE. PREPARATION OF REQUESTS I. Budget Instructions or Guidance Main Goals of the Executive

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Preparation of Agency Budget Requests

Review of Budgets

Balancing the Overall Spending Plan

Managing Budget Execution

Audit & Evaluation

BUDGET METHODS AND PRACTICE


Preparation of requests i
PREPARATION OF REQUESTS I

  • Budget Instructions or Guidance

    • Main Goals of the Executive

    • Forecasts of Critical Operating Conditions and Prescribed BASELINE

    • A Prescribed FORMAT

    • A Time Schedule

    • MAXIMUM Increase


Preparation of requests ii
PREPARATION OF REQUESTS II

  • Agency Proposals

    • Narrative -- Current Commitments and Expected Results from New Initiatives

    • Detail Schedules establishing Baselines

    • Cumulative Schedules Showing Effects of New Initiatives (up or down) on Details and Revised Totals

      Description dominates numbers. Budgeting is logic, justification, and politics -- not accounting.


Spenders budget tactics ubiquitous i
Spenders’ Budget Tactics: Ubiquitous I

  • Cultivation of an active and influential (well-organized) clientele

    • Media

  • Demonstrate competence

    • Deliver

    • Explain -- show understanding and mastery of cost estimates

    • Honesty


Spenders budget tactics ubiquitous ii
Spenders’ Budget Tactics: Ubiquitous II

  • Price Changes

  • Workload Changes

  • Methods Improvement

  • New Services

  • Full Financing


Spenders budget tactics contingent i

Avoiding Cuts:

Propose a study

Cut Popular programs

Dire consequences

All or nothing

You pick

We are the experts

Seeking Bucks for the Base

Round up

Sprinkling

Physical units

Workload and backlog

Spenders’ Budget Tactics: Contingent I


Spenders budget tactics contingent ii

Seeking New Bucks:

Old stuff

Initial commitment

It pays for itself

Spend to save

Crisis

Mislabeling

What they did makes us do it

Mandates

Matching the competition

It’s so small

Spenders’ Budget Tactics: Contingent II


Budget justification or why the numbers in next year s budget are different from this year s
Budget Justification -- Or, Why the Numbers in Next Year’s Budget are Different from this Year’s

  • Major Programmatic Changes/New Services -- Major Cutbacks of Service levels

  • Price/Wage Changes

  • Workload Changes

  • Methods Improvements

  • Full Financing of Activities Initiated in the Current Year

  • Deferred maintenance and/or replacement of equipment


Estimates grouped by organization task purpose function or activity and oe or account code
Estimates: Grouped by Organization; Task, Purpose, Function, or Activity, AND OE or Account Code

  • Wages and Salaries

  • Non-Wage Personnel Costs

  • Non-personnel Costs (Cost Drivers)

    • Volume or activity level x Unit Price

    • Ratios to another OE

    • Adjustment to Prior Year Cost

  • Breakeven Analysis


Breakeven analysis i
BREAKEVEN ANALYSIS I or Activity, AND OE or Account Code


Breakeven analysis ii
BREAKEVEN ANALYSIS II or Activity, AND OE or Account Code


Breakeven analysis iii
BREAKEVEN ANALYSIS III or Activity, AND OE or Account Code


Executive review i
EXECUTIVE REVIEW I or Activity, AND OE or Account Code

  • Policy Rationale/Conformity with Executive Priorities

  • Conformity with Budget Guidance/Including all Required Supplemental Documents

  • Arithmetic


Executive review ii
EXECUTIVE REVIEW II or Activity, AND OE or Account Code

  • Linkages

  • Program Changes

  • Omissions

  • Ratios, Shares, Trends

  • Clear Tradeoffs


Balancing the consolidated budget
BALANCING THE CONSOLIDATED BUDGET or Activity, AND OE or Account Code

  • Budget Message

  • Summary Schedules

  • Detail Schedules

    • Performance Targets

  • Supplemental Data

    • Many on the Assumptions Presented in the Budget Guidance and Trends


Budget execution i
BUDGET EXECUTION I or Activity, AND OE or Account Code

  • Preventive Controls

    • Procurement

    • Personnel

    • Pre-audit

    • Allotments

  • Feed-forward Controls -- Diagnostic Tools, e.g. variance measures

  • Feedback Controls -- affect Next Year’s Budget, Fig. 3.1


Budget execution ii
BUDGET EXECUTION II or Activity, AND OE or Account Code

  • Internal Controls

    • Personal Responsibility

    • Personnel Qualifications & Rotation

    • Segregate Responsibilities

    • Separate Operations and Accounting

    • Maintain Controlled Proofs and Security

    • Record Transactions -- complete journal and general ledger


Thought questions
Thought Questions or Activity, AND OE or Account Code

  • Some programs have an explicit revenue component and policy makers make decisions about revenues and program characteristics with the long term sustainability of the program in mind. For instance, unemployment insurance or Social Security and there are actuarial studies that give us an idea of where we need to be in 5, 10, 20, etc years both from a revenue and an expense perspective if the program is to be in balance.

  • Why don’t we look at all program commitments this way?


Thought questions1
Thought Questions or Activity, AND OE or Account Code

2. Someone once told me the problem with government is that it is easy to spend someone else’s money. Do you think that is true?


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