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Operational Budgeting

Operational Budgeting. CASAP Annual Conference January 17 and 18, 2009. Definition.

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Operational Budgeting

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  1. Operational Budgeting CASAP Annual Conference January 17 and 18, 2009

  2. Definition • An operating budget is the annual budget of an activity stated in terms of Budget Classification Code, functional/subfunctional categories and cost accounts. It contains estimates of the total value of resources required for the performance of the operation including reimbursable work or services for others. It also includes estimates of workload in terms of total work units identified by cost accounts. Wikipedia

  3. Definition • Since an operating budget is a short term budget, capital outlays are excluded because they are long-term costs. Business Dictionary

  4. Purpose Provide a forecast of revenues and expenditures i.e. construct a model of how your organization might perform financially speaking if certain strategies, events and plans are carried out. Enable the actual financial operation of the business to be measured against the forecast. en.wikipedia.org

  5. Operating Budget Types • Line Item • Program • Performance • Zero-Base

  6. Line-item budget • Budget typically used by governmental entities in which budgeted financial statement elements are grouped by administrative entities and object. These budget item groups are usually presented in an incremental fashion that is in comparison to previous periods. Line item budgets are used also in private industry for the comparison and budgeting of selected object groups and their previous and future estimated expenditure levels within an organization. • Answers.com

  7. templeton.org

  8. Program Budget • Planning-oriented approach to developing a program budget. A program budget is a budget in which expenditures are based primarily on programs of work and secondarily on character and object. It is a transitional type of budget between the traditional character and object budget, on the one hand, and the performance budget on the other. The major contribution of PPBS lies in the planning process, i.e., the process of making program policy decisions that lead to a specific budget and specific multi-year plans. • Answers.com

  9. Performance Budget • Medium- to short-range budget used in governmental accounting. It is typical of the type incorporated by a Program Planning-Budgeting System (PPBS) but without references to long range goals. • Answers.com

  10. Zero-based Budget • Zero based budgeting derives from the idea that such budgets are developed from a zero base; that is, at the beginning of the budget process, all budget accounts have a value of ZERO. This is in sharp contrast to the incremental budgeting system where generally a new budget tends to start with a balance at least equal to last year's total balance, or an estimate of it. • Wiki.answers.com

  11. Operating Budget Summary • County Operating Funds • Available Funding • Fund Balance Used • Cancellation of Prior Years Reserves • Additional Financing Sources • Financing Requirements • Financing Uses • Provisions for Reserves

  12. Nevada County Agricultural Commissioner 2008-09 Budget

  13. Budget Schedule • Department meetings • Budget Kick-off • Rate Sheets • Discretionary spending • CEO/CAO meetings • Board Budget Subcommittee • Final Draft • Public Hearing / Board Approval

  14. Procedure • Identify major revenue sources • Contracts • Fees • Estimate amounts of revenue • Base contract costs and revenue received for work done • Identify expenses (Contract Financial Plan based on staff and other costs) • Personnel Hours and Salary • Benefits • Overhead • Supplies • Mileage

  15. CSAC http://sco.ca.gov/ard/manual/cntyman.pdf

  16. Jeff Pylman Nevada County Agricultural Commissioner 530-273-2648 Jeffrey.pylman@co.nevada.ca.us

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