Question.2564 - Week 5: Why Budget? In this week’s Learning Resources, you begin to explore budgets as future-looking planning documents prepared by elected officials—a proposal for accomplishing priorities. Finkler et al. (2020) described budgeting as a process “of exploring possibilities” (p. 48). When used properly, the budget builds a bridge from the strategic plan in order to operationalize and help put the plan into action. Few governments have strategic plans, because frequent turnover in the executive and legislative branches brings new and different priorities which can impede use of long-term strategic planning. However, government agencies and departments often have them, due to enduring missions and leadership. Since nonprofit organizations typically are more enduring, connecting the budget to the strategic plan and priorities is essential. The budget can be a powerful tool to turn vision into reality. This week will lay the groundwork for your future study of the budget process. You will deepen your understanding of budgeting by: Exploring traditional government budget systems and emerging reforms Comparing and contrasting different types of budgeting systems Considering differences between government and nonprofit budgeting Considering emerging budget reforms and implications for public administrators Since the budgeting process is continuous and overlapping, while you begin your work on budget systems in the Discussion boards, you will simultaneously be finishing up your study of financial reports in this week’s assignment. You will conclude your study of financial documents, such as the Annual Comprehensive Financial Report (ACFR), which measures government finances from the perspective of what has already taken place, uses GASB accounting standards, and is audited. Reference: Finkler, S. A., Smith, D. L., & Calabrese, T. D. (2020). Financial management for public, health, and not-for-profit organizations (6th ed.).CQ Press. Learning Objectives Students will: Contrast budget systems Analyze Annual Comprehensive Financial Report (ACFR, formerly CAFR) financial statements for public organizations Learning Resources Required Readings (click to expand/reduce) Budget Resources Mikesell, J. L. (2018). Fiscal administration (10th ed.). Cengage Learning. Chapter 2, “The Logic of the Budget Process” Note: Read only the following sections: Budgets and Political Strategies (pp. 87–97) The Incrementalist Insight Roles, Vision, and Incentives Strategies Chapter 3, “Budget Methods and Practices” Note: Read only the following sections: Preparation of Agency Budget Requests (pp. 110–121) Budget Justification Elements of Cost Estimation Personnel Costs: Paying the Staff Non-Personnel Costs Screening for Errors Review of Budgets (pp. 122–127) Reviewing a Budget Request The Budget Presentation The Executive Budget: The Plan and the Balancing (pp. 127–131) Making Budget Reductions for Fiscal Sustainability Chapter 6, “Budget System Reforms: Trying to Make Better Choices” Writing Resource Optional Resource Discussion: Comparing Budgeting Systems Finkler, S. A., Smith, D. L., & Calabrese, T. D. (2020). Financial management for public, health, and not-for-profit organizations (6th ed.).CQ Press. Chapter 2, “Planning for Success: Budgeting” Note: Read only the following sections: Mission (pp. 26–27) Strategic Plan (p. 27) Long-Range Plan (pp. 27–29) Budgets (6-paragraph introduction only; pp. 29–30) Credit Line: Financial Management for Public, Health, and Not-for-Profit Organizations, 6th Edition by Finkler, S.; Smith, D.; Calabrese, T. Copyright 2020 by CQ Press. Reprinted by permission of CQ Press via the Copyright Clearance Center. Licensed in 2021. Walden Writing Center. (n.d.). Walden templates: Overview. https://academicguides.waldenu.edu/writingcenter/templates Note: Download and use the Graduate APA Course Paper Template for this week’s Assignment. Morrill, C. (2021). To increase trust in government, reinvent the local government budget. State and Local Government Review 2021, 53(1) 10–13. https://doi.org/10.1177/0160323X211000835 Photo Credit: Dave and Les Jacobs / Blend Images / Getty Images In your Mikesell (2018) readings this week, you gain information about a variety of budget systems. Inherent in the budget process is understanding that choices about program alternatives need to be made regarding what will be funded and its value to the public. Having access to good financial information and effective budget systems can better organize information so decision makers can make reasonable choices. For this Discussion, you will select and analyze two of the budget systems from your Mikesell (2018) readings this week and provide a summary describing both systems and comparing and contrasting their features. To Prepare Review the five types of budget systems discussed in this week’s Mikesell readings: Traditional Performance Budgets Program Budgets Zero-based Budget System New Performance Budgeting Participatory Budgeting By Day 3 Post your response to the following: Concisely describe each of the five types of budget systems discussed in this week’s Mikesell readings. Note: Be sure to paraphrase and summarize—avoid copying and pasting direct quotes from the text. Select two of the budget systems and compare and contrast the features of each. Note: For this Discussion, you are required to complete your initial post before you will be able to view and respond to your colleagues’ postings. Begin by clicking on the To participate in this Discussion link, then select Create Thread to complete your initial post. Remember, once you click on Submit, you cannot delete or edit your own posts, and you cannot post anonymously. Please check your post carefully before clicking on Submit! Read your colleagues’ postings. By Day 5 Respond to at least two colleagues' posts—one who selected one of the same budget systems that you did and one who selected a different budget system—by responding in at least one of the following ways: Offer an alternative viewpoint and/or insight related to the budget system features contrasted by your colleague. Suggest an additional feature that compares to or contrasts with the budget system chosen by your colleague.
Answer Below:
Table of Contents Describe five types of budget systems 2 Select two budget systems and compare and contrast the features 2 References 3 3 Describe five types of budget systems The budget system imparts the method by which how much money and what is to spend is decided by the government and also how to increase the money the government is determined to expense (Mikesell, 2018). The budget system ensured that all the decisions carried out are made by the Government. The first type of budget system is traditional system which aims to give priority to the financial aspect. The programme budget is proposed by line ministries negotiating with the central budget authenticity. The zero-based budget allotted funds based on program efficiency not on the budget history. New performance budgeting utilized performance data in allocating, and managing the government's financial assets (Rocha de Azevedo & Busanelli de Aquino, 2022). In participatory budgeting, system citizens are included to decide how communal money is spent. Select two budget systems and compare and contrast the features The major difference between the traditional and new performance budget systems is in the objectives. While in the traditional systems the objective expresses more emphasis on the financial facet compared with the physical aspect, the performance budget aims at setting up a relationship between the input and output. In traditional budget presents that the real expenditure cannot overlap the budgeted allotment, in the performance budget the performance is to be done within the budget allocation. The traditional budget is prepared for distinct things of expenditure i.e. rent, rates, salaries etc. while the performance budget is prepared to be provided on the reason for which the disbursement is incurred (Mikesell, 2018). While controlling tasks at the time of producing the budget traditional budget system is not as effective as expected but the performance budgeting system is more efficient in controlling many activities undoubtedly as it calculates the input-output correlation. Whereas the traditional budget is always produced on the ground of last year's accomplishment with few inclusions and alteration that is after doing a few adaptations, on the basis of the original requirement of the institution's performance meaning on the ground of job evaluation budget is to be produced (Emerling & Wojcik-Jurkiewicz, 2018). 4 References Emerling, I., & Wojcik-Jurkiewicz, M. (2018). The risk associated with the replacement of traditional budget with performance budgeting in the public finance sector management. Ekonomicko-manazerske spektrum, 12(1), 55-63. https://www.researchgate.net/profile/Magdalena-Wojcik- Jurkiewicz/publication/329360803_THE_RISK_ASSOCIATED_WITH_THE_REPL ACEMENT_OF_TRADITIONAL_BUDGET_WITH_PERFORMANCE_BUDGETI NG_IN_THE_PUBLIC_FINANCE_SECTOR_MANAGEMENT/links/60f580cafb56 8a7098bfd362/THE-RISK-ASSOCIATED-WITH-THE-REPLACEMENT-OF- TRADITIONAL-BUDGET-WITH-PERFORMANCE-BUDGETING-IN-THE- PUBLIC-FINANCE-SECTOR-MANAGEMENT.pdf Mikesell, J. L. (2018). Fiscal administration (10th ed.). Cengage Learning. Rocha de Azevedo, R., & Busanelli de Aquino, A. C. (2022). Ceremonial use of the performance-based budgeting by São Paulo municipalities. Revista Contemporânea de Contabilidade, 19(50). https://periodicos.ufsc.br/index.php/contabilidade/article/download/77866/48610/323 195More Articles From Finance
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