Public Budgeting: A Significant Amount of Effort

Public Budgeting:

A significant amount of effort is dedicated towards the process of developing new public programs since such programs are not similar to business enterprises. Therefore, the process of public budgeting requires consideration and inclusion of public policies. In essence, public policies should be translated into discussions regarding the annual budget through evaluation of the monetary demands of such policies on public revenue. During this process, policy makers should be bound by the financial requirements of the various alternatives. As part of translating public policies into discussions on annual budget, policy makers should eliminate certain policy alternatives from consideration if the alternatives create huge fiscal demands on public revenue. The need for policy makers to eliminate such alternatives is fueled by the fact that the government is permitted to collect revenue only as long as the benefits of the generated revenue exceeds the loss realized by contributors of the revenue.

Question 2:

During public budgeting there are some basic questions expected from a budget analyst guided by concerns regarding financial control. They include; what is the framework for making budget decisions? Are the basic steps of budgeting included? Who is mandated with the task of planning and preparing the budget? What is the money in the budget used for? How can changes in budget plans be incorporated? What are the typical weaknesses in the budget process? ("Budget Preparation," n.d.). If the management dominated budget decisions, these questions would change to include; how does the budget meet the needs and demands for services? Does the cost of providing benefits relate to activities paid for? What are the necessary changes needed for effectiveness of the budget?

Question 3:

Since a budgeter cannot be a manager, controller, and planner simultaneously and is required to choose one role over the other two, there are opportunity costs of a decision to handle control concerns rather than planning priorities or program management issues. These opportunity costs include enabling budgeters to monitor organizational functions, provide a mechanism for comparing actual results with budgets, compels the management to plan for the future, and enhances distribution of scarce resources ("Chapter 4 - Budgetary Control," n.d.). On the contrary, the opportunity costs of management concerns include promoting clear definition of areas of responsibility, stimulating employee motivation, and promoting communication and coordination.

Question 4:

Planning, management and control orientations have considerable impacts on the characteristics of budgeting. The budget development phase of the budget cycle is controlled by the prevailing orientations of department and executive budget policy makers. As a result, these different orientations have significant effect on the concerns and decision priorities of budget policy makers. Generally, different orientations compel these individuals to critically consider the effectiveness and efficiency of the budget during the development phase. They examine each budget decisions through a multi-faceted framework and approach rather than a single view.