Advantages And Disadvantages Of Line Item Budgeting

Register to read the introduction… Line budgeting is the most utilized method because it simply shows how the organization’s money is being allocated and how well each organization is controlling its expenses (Martin, 2001). Because it is not complicated just about anyone can read this method of budgeting. Line item budgets are easy to prepare, understand and justify. The disadvantages to this type of budget are the lack of correlation between the budget itself, the objectives of the program and the outcome of the program. The other disadvantage is there is no real way to predict what the future may hold because line item budgets are based on data which may not necessarily reflect what is going on currently. Performance budgeting is “to relate agency expenses to programs by determining (a) a program output (or unit of service) performance measure, (b) the total program cost, and (c) the cost per output of service.” (Martin, 2001) The benefit of this type of program is similar to the benefits of program budgets. The difference between the two is one concentrates on quality versus quantity. If there are adjustments to do, this can be done as the program advances or as services performed …show more content…
Especially when one is dealing with traditional approaches to fund raising. Even though there are such avenues as government grants, private donor grants, and agencies such as the United Way, there is still only so much money to go around, so the process may come across as quite daunting. Yes there are funding sources that have certain criteria that must be met, generally contracts, but with grants the funding involved may be less stringent as to how the money is to be used. Grant writing is a very important process and attention to the minutest details is very crucial and