Public Budgeting and Finance - Budget Methods and Practices

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What are the key phases of the budget cycle?

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1. Preparation of agency budget requests; 2. Legislative consideration and approval; 3. Management of budget execution; 4. Audit.

Front

How can annual growth rates be used for forecasting?

Back

They can be used to estimate future values based on past growth, assuming future growth will be similar to past trends.

Front

What are the three important sections of a budget proposal?

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1. Narrative: agency’s managerial objectives; 2. Detail schedules: requests for new appropriations; 3. Cumulative schedules: aggregate new initiatives with existing activities.

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What is the significance of budget justification?

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Budget justifications must be clear, factual, and compelling, addressing current needs and expected results from the budget request.

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What are common reasons for requesting additional funds in a budget?

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1. Higher or lower prices; 2. Increased demand for services; 3. Methods improvement; 4. Full financing; 5. New services.

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What is break-even analysis in budgeting?

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It identifies the service level at which service revenue equals service cost, helping in budget estimation and subsidy determination.

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What are the key points analysts consider during budget reviews?

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1. Policy rationale; 2. Arithmetic accuracy; 3. Linkages between justifications and requests; 4. Agency competence; 5. Spending drivers.

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What is the purpose of internal controls in budget management?

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To safeguard assets, ensure accuracy of financial data, promote operational efficiency, and adhere to policies.

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What types of audits are conducted after budget execution?

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1. Financial audits: ensure compliance with accounting principles; 2. Performance audits: assess efficiency and effectiveness.

Front

What is the role of the executive budget?

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It serves as a policy document, financial plan, operations guide, and a communication tool to the legislature and public.