BUDGET%20METHODS%20AND%20PRACTICE

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BUDGET METHODS AND PRACTICE

• Preparation of Agency Budget Requests
• Review of Budgets
• Balancing the Overall Spending Plan
• Managing Budget Execution
• Audit Evaluation

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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

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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.

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Spenders Budget Tactics Ubiquitous

• Cultivation of an active and influential
  (well-organized) clientele
• Media
• Demonstrate competence
• Deliver
• Explain -- show understanding and mastery of
  situation

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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
• Glitter
• Sprinkling
• Physical units
• Workload and backlog

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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
• Its so small

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Budget Justification -- Or, Why the Numbers in
Next Years Budget are Different from this Years

• 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

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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 x Unit Price
• Ratios to another OE
• Adjustment to Prior Year Cost
• Breakeven Analysis

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EXECUTIVE REVIEW I

• Policy Rationale/Conformity with Executive
  Priorities
• Conformity with Budget Guidance/Including all
  Required Supplemental Documents
• Arithmetic

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EXECUTIVE REVIEW II

• Linkages
• Program Changes
• Omissions
• Ratios, Shares, Trends
• Clear Tradeoffs

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BALANCING THE CONSOLIDATED BUDGET

• Budget Message
• Summary Schedules
• Detail Schedules
• Performance Targets
• Supplemental Data
• Many on the Assumptions Presented in the Budget
  Guidance and Trends

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BUDGET EXECUTION I

• Preventive Controls
• Procurement
• Personnel
• Pre-audit
• Allotments
• Feed-forward Controls -- Diagnostic Tools, e.g.
  variance measures
• Feedback Controls -- affect Next Years Budget,
  Fig. 3.1

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BUDGET EXECUTION II

• 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