Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
28 Cards in this Set
- Front
- Back
|
What are the objectives of a budget? |
The budget embodies management's plans to meet public expectations to: 1. Prioritize community program and service goals 2. Authorize the expenditure of resources to meet goals 3. Comply with laws over spending appropriations 4. Improve quality of services in the near term 5. Demonstrate stewardship for public funds in the long term |
|
|
What are the two views of a governmental budget? |
1. Demonstrate compliance with laws and regulations 2. Communicate performance effectiveness |
|
|
Compliance with laws in terms of budgeting: |
1. The annual budget should be adopted 2. The accounting system should provide the basis for appropriate budgetary control 3. Budgetary comparisons should be included in the financial statements for the funds for which an annual budget has been adopted |
|
|
Budgeting comparison schedules should be presented as RSI and include: |
1. The original budget 2. The final appropriated budget 3. Actual inflows, outflows, and balances |
|
|
4 criteria for the Distinguished Budget Presentation Award: |
1. Policy document 2. Financial plan 3. Operations guide 4. Communications device |
|
|
What must be included in RSI? |
A budget to actual comparison |
|
|
The budget can be presented in a two formats: |
1. A statement in the general purpose external financial statements 2. A schedule after the notes to the financial statements |
|
|
4 budgeting approaches: |
1. Line-item budgeting (incremental and zero-based) 2. Performance budgeting 3. Program budgeting (and PPBS) 4. Entrepreneurial budgeting |
|
|
Do governments have to choose only one of these budgeting approaches? |
No: entity-wide budgets can use a variety |
|
|
Incremental Budgeting |
1 of 2 types of line item budgeting. Simple and widely used, and it's derived from the prior year's budget. It focuses on departmental expenditures by applying a percentage increase "across the board" to all line-items. The increase may be the annual rate of inflation, or specific adjustments that relate to expected salary increases or shrinkage relating to scaling back operations. Doesn't relate inputs to outputs or outcomes. |
|
|
Zero-Based Budgeting (ZBB) |
Second of two line-item budeting approaches. It requires that the very existence of each activity be justified each year, as well as the amount of resources that will be allocated to it. Uses readily available objects-of-expenditures. Easy to understand. Programs should be re-evaluated annually. Not widely used as it is time-intensive and skepticism arises when marginally successful programs continue to be funded. |
|
|
Performance Budeting |
A plan for relating resource inputs to the efficient production of outputs. Moves from a legal view of the budget that is a plan of estimated expenditures to a business view of the budget as an operating plan. Introduced in 1949 by the Hoover administration. Evolved as government managers became more professional and adapted business techniques |
|
|
Program budgeting |
First of two types of program budgeting. It discloses the full costs of programs or functions without regard to the number of organizational units that might be involved. Often considered synonymous with performance budgeting; however, that method typically focuses on the relation between inputs and outputs of each organizational unit, rather than programs |
|
|
Planning-Program-Budgeting System |
Second of two types of program budgeting. It integrates planning and control into one system. Provides legislators and public administrators with output-orientated information that can be used in evaluating how successful the government is in meeting strategic objectives. Advantages include the ability to address whether the government is better off operating certain programs. |
|
|
Entrepreneurial Budgeting |
Approaches budgeting at the highest level in the government, not as a traditional accounting task. Merges strategic plans, incentives, and accountability into the budget. Communicates budget information to citizens. A balanced scorecard is an entrepreneurial tool that links financial and non-financial indicators to share with governing bodies. |
|
|
Budget Calendar |
Schedule of activities in the process invluding public hearings to ensure participation by all |
|
|
Budget officer |
Person responsible for providing technical assistance to operating personnel who prepare the budgets |
|
|
Budgeting Appropriations |
1. Administration's requests for authorization to incur liabilities for goods, services, and facilities 2. Governments budget expenditures required to meet public demand for services first, followed by the budget for revenues to fund those expenditures 3. Conflicts and competing demands from various stakeholder groups must be resolved by the chief executive in budgeting appropriations |
|
|
Budgeting Revenues |
1. The revenue budget is the plan for financing proposed appropriations 2. Budget for sources of inflows of financial resources, including revenues, inferfund transfers, debt issue proceeds 3. Sources of revenues may be controlled by state or local laws and ceilings, e.g., limits on property tax rates and assessments |
|
|
Budgeting Capital Expenditures |
Develop multi-year budgets for capital expenditures that are expected to benefit more than one period, e.g., land, buildings, and equipment. |
|
|
Capital improvement plans include: |
- Improvement of streets - Construction of bridges and buildings - Acquisition of land for recreational use, parking lots, future building sites - Urban renewal |
|
|
Why is budgeting cash receipts and disbursements important? |
It is critical to foresee the effects of operating plans and capital improvement plans on cash. Governments should have sufficient cash on hand to meet current liabilities, like payroll and suppliers. -Tax anticipation notes are short-term borrowings usually from banks that are repaid when taxes are collected. -Sweet accounts are used to automatically invest any daily excess of cash over target levels. -Accelerate cash receipts with early billing, payment discounts, late payment penalties, use of lock boxes, and credit card and electronic payments |
|
|
"Managing for Results" process |
Helps focus attention on how the following activities can lead to meeting goals (such as safe highways, healthy children, thriving communities): Strategic planning, program activity planning, measuring for results, budgeting for results, managing work processes, evaluating results, reporting results |
|
|
Results-Oriented Performance Measurement System |
Requires clear identification of: (1) Outputs, (2) Outcomes Critical Components include: (1) Transparency, (2)Measures over time, (3) Measures in a variety of activities, and (4) Leadership support |
|
|
3 Categories of Service Efforts and Accomplishments (SEA): |
1. Service efforts (resources used - Example is number of police officers) 2. Service outputs (number of patrols responding to calls or investigations) 3. Service outcomes (reduction of deaths and thefts) |
|
|
Managerial Toots to Improve Performance |
1. Total quality Management 2. Customer relationship management 3. Activity Based Costing 4. Balanced Scorecards Don't need to know about the first three, but need to know about balanced scorecards |
|
|
Balanced Scorecards |
An integrated set of financial and nonfinancial performance targets. 4 groups: 1. Financial- Has our financial performance improved? 2. Customer- Do customers recognize that we are delivering more value? 3. Internal business processes- Have business processes improved so we can deliver more value? 4. Learning and growth- Have we maintained our ability to adapt and improve |
|
|
Allowable Costs for Federal Grants |
Allowable costs are those necessary and reasonable for efficient performance of the federal award, such as compensation of employees, cost of materials, and deprecation Unallowable costs include alcoholic beverages, bad debt expense, and salaries of the chief executive officer. |
