Budget

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MODULE 3 Fixed and Variable Costs Learning Objectives: ■■ Distinguish fixed costs from variable costs ■■ Calculate fixed and variable costs In producing goods and services, government incurs costs. Within the range of normal activity, called the relevant range by the accounting profession, some of the cost items change with activity level, while others do not. This module discusses cost classification based on how costs vary in relation to changes in production volume and the total cost of programs when different types of costs are combined. Definitions of Fixed, Variable, and Step Costs Costs can be classified into three types based on whether they change in relation to production volume: (1) fixed costs, (2) variable costs, and (3) step costs. Fixed costs are those cost elements that remain constant over a normal range of production volume or activity or over a certain length of time. A typical example of a fixed cost is the cost of facilities rental, which, within a relevant range of output and during the lease period, often remains constant. Variable costs vary in direct proportion to production or service volume. For instance, the food cost to operate a soup kitchen is variable since the total food cost will increase proportionately with any increase in the number of meals served. Step costs are those cost elements that remain constant but increase to a new level at a certain point of activity or usage within the relevant range. An example is the number of teachers required in a school. When the number of students in a class is lower than the maximum class size (i.e., when there is unused capacity), adding one student will not lead to the hiring of a new teacher. However, when the classroom is operating at full capacity, the addition of one student (or more than one student) will require the formation of a new class and the hiring of a new teacher for that class. The cost related to hiring a new teacher is therefore a step cost. Adding more students will not change the cost structure until the teacher’s class is at maximum size. FOR THE USE OF GRAND CANYON UNIVERSITY STUDENTS AND FACULTY ONLY. NOT FOR DISTRIBUTION, SALE, OR REPRINTING. ANY AND ALL UNAUTHORIZED USE IS STRICTLY PROHIBITED. Copyright © 2015 by SAGE Publications, Inc. Budget Tools 24 The fixed costs, variable costs, and step costs listed above are illustrated in Figures 3.1, 3.2, and 3.3. It should be noted that this cost classification is valid only within a relevant volume and time frame. As volume and time frame increase beyond the norm, all costs become variable. For instance, when the demand for job-training programs increased during the 2008–2009 recession, the number of trainees exceeded the facilities capacity of some organizations. New facilities had to be brought online, meaning the organizations’ fixed facilities costs became variable in response to the overflow of volume beyond the relevant range. The same could be said about time. Although rent is a fixed cost in the short term, it can and usually does increase over the course of a few years. Rent therefore becomes a variable cost as the time frame extends beyond the relevant range. In sum, the classification of fixed, variable, and step costs only holds true when such costs are incurred in conditions under which public managers normally operate (i.e., the relevant range).

Chen, G., Weikart, L., & Williams, D. (2015). Budget tools: Financial methods in the public sector. Thousand Oaks, CA: SAGE Publications. ISBN-13: 9781483307701 Retrieved from https://www.gcumedia.com/digital- resources/sage/2014/budget-tools_financial-methods-in-the-public-sector_2e.php VC = $1,000 × 50 = $50,000 SC = $50,000 × 3 = $150,000 Use the following equation to calculate the total cost (TC) of the program: TC = FC + VC + SC = $90,000 + $50,000 + $150,000 = 290,000 Therefore, the total cost of the program is 290,000. Summary This module has discussed the concepts of fixed, step, and variable costs and their application in the context of the relevant range of operating activity. Although traditionally, government and nonprofit organizations are mission driven and not overly concerned with cost recovery, current financial realities have required them to take such considerations into account. This classification of costs provides the basis for breakeven analysis, which is discussed in the next module. Discussion Questions Answer the following questions, providing examples: 1. How is a fixed cost different from a variable cost? 2. Why do most fixed costs sooner or later become variable costs? FIGURE 3.3 Step Costs Cost Units of Services FOR THE USE OF GRAND CANYON UNIVERSITY STUDENTS AND FACULTY ONLY. NOT FOR DISTRIBUTION, SALE, OR REPRINTING. ANY AND ALL UNAUTHORIZED USE IS STRICTLY PROHIBITED. Copyright © 2015 by SAGE Publications, Inc. Budget Tools 26 Assignments 1. The local government is running a flu vaccination program. Are the following costs fixed, variable, or step costs? (a) Costs of occupancy (b) Costs of management (c) Costs of part-time employee salaries based on service volume (d) Costs of vaccine consumed 2. Clifftown’s Parks and Recreation Department is introducing a new summer program for children in elementary school. Programming runs from 8:00 a.m. to 5:00 p.m., Monday through Friday. The proposed camp is 10 weeks long and is planned for 50 children. Fixed costs, which include equipment and facilities costs, are estimated at $5,000 for 10 weeks. The facilities and equipment can accommodate up to 100 children per week, which is the maximum the department is willing to enroll in any given session. There will be 5 camp counselors each week for the 50 children, at a total cost of $2,000 per week for the 5 counselors. The department is comfortable with each counselor being responsible for 11 children. Any more than that and an additional counselor will need to be hired. The camp will serve lunch and snacks on each weekday, at a weekly cost of $15. (a) Identify the fixed, step, and variable costs. (b) What would be the cost of the program for 50 children? (c) What would be the cost of the program for 75 children? 3. Desert Vista Homeless Campus provides shelter and breakfast to individuals in need. Local governments and several nonprofit organizations provide financial assistance to the shelter and require weekly reporting. Desert Vista’s current facility can hold a maximum of 300 people. The base weekly cost to run the shelter is $1,500. The shelter also needs 3 cooks per 75 residents to prepare a sufficient amount of food for breakfast. Cooks are paid a flat fee of $50 for each meal prepared. Breakfast costs an average of $2 per meal to prepare, excluding staff costs. (a) Identify the fixed, step, and variable costs. (b) What is the cost incurred by the campus for 150 people over a 1-week period? (c) What is the cost incurred by the campus for 200 people over a 1-week period?

MODULE 10 The Budget Process: An Overview Learning Objectives: ■■ Understand some elements of establishing a base or baseline budget ■■ Understand the elements of a budget call ■■ Prepare before the budget call ■■ Understand budget forms and procedures ■■ Understand budget preparation schedules and the budget cycle calendar Narrowly, budgeting is preparing a plan—a request for funds based on a declaration of need— which is submitted to a decision-making authority. More broadly, it involves participating in a process that may last between 18 and 24 months, perhaps even longer in some jurisdictions or for some sectors of government. The major components of the budgeting process are shown in Figure 10.1. They typically begin with the central budget authority, normally the executive, preparing a base or baseline budget and then issuing a budget call. In response, the agencies that are responsible to the executive prepare a budget request. The agencies then prepare agency- level budgets and submit these to the central budget authority. The central authority reviews, modifies, and approves the agency-level budgets and prepares a consolidated government-wide budget. The government-wide budget is then submitted to the legislature. The legislature has the ability to appropriate money; that is, it can authorize expenditures that are completed through the enactment of laws. Laws are usually called acts in states and the federal government and ordinances in local government. The proposed appropriation act or ordinance may look a lot like the budget, and in some jurisdictions, the legislative and budgeting processes may have become so intertwined as to appear seamless. The proposed law is typically reviewed via a legislative committee process, where there are hearings and testimony. Among those who testify are the executive or a senior official, who testifies about the whole budget, and agency heads, who testify about their agency budgets. Others who testify may include legislators, lobbyists, interested parties, and members of the public. The committee modifies and reports a recommendation to the legislative body, which approves or disapproves the budget. In bicameral legislatures, agreement must be reached between the two chambers. In the federal government, most or all states, and cities with strong mayors, the budget is subject to approval FOR THE USE OF GRAND CANYON UNIVERSITY STUDENTS AND FACULTY ONLY. NOT FOR DISTRIBUTION, SALE, OR REPRINTING. ANY AND ALL UNAUTHORIZED USE IS STRICTLY PROHIBITED. Copyright © 2015 by SAGE Publications, Inc. The Budget Process: An Overview 75 or veto by the executive, meaning this process may cycle back for additional review and approval. Many states give their governor line-item veto authority, which allows the governor to strike out small parts of the budget that he or she does not approve. Once an appropriation is enacted through the jurisdiction’s process, it must be made ready for implementation. The appropriated amounts are assigned to agencies within accounts generally managed by a treasurer or finance agency, following guidance from the central budget authority. Legislative bodies may not attend to minor details when changes are made in committee; this duty may fall to the agencies, which must align their funding for the year to match the authorized amount. This leads to actual expenditures and monitoring of spending over the year, followed by reporting and audits. For major agencies, audits may stretch well into the year following the budget year. The Budget Call The traditional beginning of the annual budget cycle for federal, state, and substantial local jurisdictions is the budget call. This is a communication or a system of communications from the central budget development authority, which is typically an office that reports directly or indirectly to the jurisdiction’s chief executive, to the heads of departments, agencies, and other budget units and their chief budget officers. Appendix A of this module is a copy of the main

Chen, G., Weikart, L., & Williams, D. (2015). Budget tools: Financial methods in the public sector. Thousand Oaks, CA: SAGE Publications. ISBN-13: 9781483307701 Retrieved from https://www.gcumedia.com/digital- resources/sage/2014/budget-tools_financial-methods-in-the-public-sector_2e.php transmittal letter for the budget call within the US federal government in May 2012. It was circulated with an important attachment, which is included as Appendix B of this module.1 A secondary transmittal letter is associated with OMB Circular A-11,2 which is the federal government’s budget manual. The secondary letter is roughly one paragraph long, and it basically says, “Here is the budget manual—use it.” The budget manual itself is almost 800 pages long. Typically, state and local budget manuals are not 800 pages long, but they are substantial. The budget call can be as limited as a directive telling the budget units to submit the budget by a certain date and providing a uniform format for the budget. This limited type of call is, however, uncommon. As Appendices A and B of this module show, the budget call is likely to provide policy directives that communicate to the agency the executive’s main objectives. The budget proposal is expected to conform to these objectives by aligning discretionary elements of the agency’s programs with the executive’s objectives and possibly by including decision packages that will further redirect the agency toward these objectives. The executive’s objectives are likely to include management objectives, largely related to efficiency and effectiveness, and policy objectives reflecting the political goals of the executive. The objectives included in Appendix B are primarily of the first type. Typically, objectives of the second type will be found in communications that are more individualized for specific agencies. The Base Budget Individualized communications may also set a base budget and/or a baseline budget. In some jurisdictions, such communications may also give guidance associated with target-based 1. These two documents are known as M-12-13, Fiscal Year 2014 Budget Guidance, and M-12-13, Appendix: Administration’s Management Priorities. They are found at http://www.whitehouse.gov/ omb/memoranda_2012/. 2. Found at http://www.whitehouse.gov/omb/circulars_index-budget/. FOR THE USE OF GRAND CANYON UNIVERSITY STUDENTS AND FACULTY ONLY. NOT FOR DISTRIBUTION, SALE, OR REPRINTING. ANY AND ALL UNAUTHORIZED USE IS STRICTLY PROHIBITED. Copyright © 2015 by SAGE Publications, Inc. Budget Tools 76 FIGURE 10.1 Executive/Executive Budget Office Legislature: • Introduces a proposed appropriation (often as prepared by the Executive). • Holds hearings receiving testimony from Executive, Agencies, Contractors, and the Public. • Makes committee reports. • Passes an Act or Ordinance approving the budget. Executive/Executive Budget Office: • Reviews and adjusts the base budget. • Issue a Budget Call. Agencies and Entities of Government: • Prepare and submit a budget request to Executive’s Budget Office. • Consult with: _ The executive, _ The legislature (in some jurisdictions), and _ A variety of groups. Executive/Executive Budget Office: • Reviews, adjusts, and approves agency requests. • Prepares a consolidated budget. • Submits the budget to the legislature. Executive: • Approves the Act (in most jurisdictions), sometimes in an iterative process. Agencies and Entities of Government: • Implement the budget based upon Executive Budget Office guidelines.

Chen, G., Weikart, L., & Williams, D. (2015). Budget tools: Financial methods in the public sector. Thousand Oaks, CA: SAGE Publications. ISBN-13: 9781483307701 Retrieved from https://www.gcumedia.com/digital- resources/sage/2014/budget-tools_financial-methods-in-the-public-sector_2e.php • Prepare reports. • Comply with audits. FOR THE USE OF GRAND CANYON UNIVERSITY STUDENTS AND FACULTY ONLY. NOT FOR DISTRIBUTION, SALE, OR REPRINTING. ANY AND ALL UNAUTHORIZED USE IS STRICTLY PROHIBITED. Copyright © 2015 by SAGE Publications, Inc. The Budget Process: An Overview 77 budgeting, a practice that sets a targeted spending amount but allows some discretion within those aggregates. A base budget is the current year’s spending level, while a baseline budget recognizes that the current year’s spending level is likely to recur the next year but needs technical adjustments for things such as inflation, annualization of part-time positions, etc. The target amount is often specified in the agency’s letter. Individual agencies may not be allowed to establish their baseline budget for next year. There can be substantial technical adjustments to the base budget (current year’s funding level) for reasons such as reducing funds when known start-up costs are included or extending funding when a program is funded with a starting date in the middle of the fiscal year. Under such circumstances, the adjusted funding level is typically called a baseline budget. We discuss steps for determining the baseline budget below. The guidance may also designate specific initiatives (decision packages) to be included in the budget submission, setting a maximum funding level and directing that some portion of the discretionary elements of the agency’s budget be repurposed. These sorts of directives are consistent with target-based budgeting. When revenue is scarce, the communication can direct the agency to reduce the budget and may set a target level for the reduction. It is not common for communications to specify how to reduce the budget, although sometimes they designate component programs as exempt from the reduction. The Budget Manual The primary function of the budget manual is to provide a method of submitting a budget. This may include designating any or all of the following: ■■ The general layout of the textual budget submission ■■ The forms that are to be submitted ■■ Any electronic submissions ■■ Critical submission dates ■■ Any approval or discussion processes the agency needs to comply with ■■ The subsequent central budget decision process ■■ The legislative budget process An agency budget submission may consist of filling out some forms, or it may consist of preparing a document that, except for the narrowness of its focus, looks very much like a government- wide budget. If a government-wide budget contains an extensive agency-specific narrative, it is likely that the narrative was initially prepared in an agency submission. The possibilities are many and varied. Some common items expected in an agency budget submission include descriptive text, performance data, personnel information, financial information, and decision packages. Descriptive Text It is common for there to be general description of the agency, which may include such features as the following: ■■ A citation and brief review of any authorizing laws ■■ A review of the agency’s history ■■ A description of programs, services, and service populations FOR THE USE OF GRAND CANYON UNIVERSITY STUDENTS AND FACULTY ONLY. NOT FOR DISTRIBUTION, SALE, OR REPRINTING. ANY AND ALL UNAUTHORIZED USE IS STRICTLY PROHIBITED. Copyright © 2015 by SAGE Publications, Inc. Budget Tools 78 The descriptive text may include a section that is organized in a format oriented toward strategic management, management by objectives, or some other management style. Such information may be presented in a separate section. Performance Information

Chen, G., Weikart, L., & Williams, D. (2015). Budget tools: Financial methods in the public sector. Thousand Oaks, CA: SAGE Publications. ISBN-13: 9781483307701 Retrieved from https://www.gcumedia.com/digital- resources/sage/2014/budget-tools_financial-methods-in-the-public-sector_2e.php The submission may include a section that addresses agency performance. This information may follow a designated format, or it may be free-form. It is recommended that performance information be presented in tables that reflect past, estimated current, and planned future performance. For past and estimated current performance, original amounts shown in earlier budgets, actuals or estimated actuals, and variances should be presented. Textual information should explain substantial variances, whether they are in the desired or undesired direction. Personnel Information There likely is a requirement to show the number of employees. There may be a requirement that this information be categorized according to various employee classes such as full-time and part-time employees or employees supported with local funds or with other funds, possibly showing each funding source separately. In some jurisdictions, the staffing level is budgeted, which usually means that the number of concurrently employed staff within an authorization category cannot exceed an authorized maximum. Financial Information Financial information may be submitted in two formats: ■■ Within the text of a budget request ■■ As electronic or input-ready data Electronic or input-ready data are line-item detail data that follow the chart-of-accounts structure of the jurisdiction in great detail. This level of data will later form the preliminary set of authorized amounts for expenditures from the central treasury. Electronic input may also include performance targets and personnel levels. In most jurisdictions, the actual appropriation is not at this level of detail, and the financial information reported in the text of the budget consists of summary tables. The level of summarization varies substantially among jurisdictions. Materials to be placed in an agency’s request to the state or local budget office are typically organized as in Table 10.1 Decision Packages The agency may be authorized to submit decision packages, discussed in Module 13 and Module 14, that request modifications to the agency’s core budget. See Appendix C of this module, “Example of Virginia’s Decision Package.” Additional Topics Many jurisdictions provide other specific guidance that may be found in a budget manual or other official budget instructions. Such guidance may include specific forms to be submitted FOR THE USE OF GRAND CANYON UNIVERSITY STUDENTS AND FACULTY ONLY. NOT FOR DISTRIBUTION, SALE, OR REPRINTING. ANY AND ALL UNAUTHORIZED USE IS STRICTLY PROHIBITED. Copyright © 2015 by SAGE Publications, Inc. The Budget Process: An Overview 79 with the budget or as the main elements of the budget. In some smaller jurisdictions, completing forms that communicate expected expenditures may be the primary component of preparing a budget. In other jurisdictions, a common practice is to prepare a letter of transmittal to be sent to the central budget agency or to the executive along with the submission of the agency budget. In still other jurisdictions, the agency budget may be simultaneously submitted to the central budget agency and to the legislature. Time Frame As we observe in Appendix A of this module, the federal budget process starts more than half a year before the budget is actually submitted to Congress. State and local processes generally do not take as long to complete, but they typically last many months. Critical dates provide for the agency to submit its budget so that the central office can begin reviewing, adjusting, and compiling a government-wide budget. A budget due to be presented to a state legislature in mid-January may be due to the central budget office in August or September of the previous year. Agency Role in the Budget Process A well-operated agency is prepared when the budget call is transmitted. The agency can do three things in advance of the budget call to make the budget process run smoothly:

Chen, G., Weikart, L., & Williams, D. (2015). Budget tools: Financial methods in the public sector. Thousand Oaks, CA: SAGE Publications. ISBN-13: 9781483307701 Retrieved from https://www.gcumedia.com/digital- resources/sage/2014/budget-tools_financial-methods-in-the-public-sector_2e.php 1. The agency should know the important issues that will call for decision packages, and it should have these already prepared to the greatest degree possible. These should not wait for the budget call. 2. The agency head can consult with constituent groups and legislators to learn about issues and build support for budget initiatives. This activity should be conducted within the scope of guidance provided by the central executive. 3. The agency head can consult with the central executive, an intermediary, or the director of the central budget office to bring important initiatives to their attention before the budget call is produced. After the budget call, the agency prepares a budget package. Actual practice varies sharply among jurisdictions and even among agencies within some jurisdictions. Most of the work will TABLE 10.1 Typical Organization of an Agency Budget Submission Commissioner’s Statement (can be one to several pages) State mission, dollars in current budget, and changes requested Agency Budget Show current revenue and expenditure budget, both FTEs and dollar amounts Program Additions/Deletions Show projected revenue and expenditure budget, both FTEs and dollar amounts Special Revenue Funds Report any new or federal funding Performance Data Demonstrate both the efficiency and the effectiveness of the current programs and those being proposed Explanation of Any Unusual Circumstances Report any revenue ending, unusual purchases such as new computers, etc. Capital Budget (usually reported separately) May include computers FOR THE USE OF GRAND CANYON UNIVERSITY STUDENTS AND FACULTY ONLY. NOT FOR DISTRIBUTION, SALE, OR REPRINTING. ANY AND ALL UNAUTHORIZED USE IS STRICTLY PROHIBITED. Copyright © 2015 by SAGE Publications, Inc. Budget Tools 80 be completed by the agencies in some jurisdictions, such as the federal government, and more of the work will be completed by the central budget entity in other jurisdictions, such as small local governments. Where the agency has a substantial role and possibly some discretion, the agency prepares a budget that consists of assigning the approved base budget to planned expenditures by functions, program, work units, and line items; preparing text; developing decision packages for substantial changes beyond the base budget; developing decision packages for reductions below the base budget under some circumstances; and ultimately submitting the budget to the central authority. This practice frequently involves substantial collaboration with the central budget office, legislators and their staff, contractors, program beneficiaries, and possibly others. Sometimes in the process, the agency head is expected to meet with an intermediary from the executive and discuss the budget, or perhaps he or she has an opportunity to present and discuss the budget with the head of the central budget office. This meeting may be optional or mandatory. The Executive Budget Submission After the agency’s budget is submitted, the central budget office examines the document for compliance with the budget call, accuracy, agreement with political purposes, feasibility within funding levels, and possibly other criteria—such as the express wishes of powerful legislators. This examination may involve frequent consultation between the central budget office and the agency and will eventually lead to an agency budget that is approved by the central budget office, compiled into the government-wide budget, and communicated to the legislature. The central budget office may be engaged in encouraging, discouraging, and even disallowing some elements of the budget submission before the actual submission. The budget call may set narrow parameters around what may be submitted, so the submission may be strictly limited. When the actual submission is received, it is compared with the budget call, current governmental revenue expectations, and submissions from other entities of government. The central budget office must coordinate with all of these elements and must also take into account political issues involving taxation or other revenue generation. It does all this for the purpose of reaching an aggregate budget across the entire jurisdiction that meets perceived needs, funds well-justified

Chen, G., Weikart, L., & Williams, D. (2015). Budget tools: Financial methods in the public sector. Thousand Oaks, CA: SAGE Publications. ISBN-13: 9781483307701 Retrieved from https://www.gcumedia.com/digital- resources/sage/2014/budget-tools_financial-methods-in-the-public-sector_2e.php expenses, and is politically feasible. In most jurisdictions, the executive budget contains substantial text, some of which may be extracted from agency language and some of which is developed by the central budget agency, sometimes in collaboration with the legislature. The text can be divided into two parts: the budgetary text—which describes the jurisdiction, its programs, where money comes from and goes to, its accomplishments, and so forth—and the appropriation text, which authorizes the expenditure of funds. In some jurisdictions, the appropriation text may supplement or supplant other statutory language, having the effect of creating, changing, or abolishing programs. The Legislative Budget Process In many jurisdictions, the legislative budget process starts near the beginning of the legislative year. For part-time legislatures, the length of the legislative calendar may be determined, in part, by the time required for the legislative budget process. At the beginning of the process, the budget is presented, and the proposed appropriation is introduced. While these are companion events, the processes are typically so closely linked as to be indistinguishable. At the beginning FOR THE USE OF GRAND CANYON UNIVERSITY STUDENTS AND FACULTY ONLY. NOT FOR DISTRIBUTION, SALE, OR REPRINTING. ANY AND ALL UNAUTHORIZED USE IS STRICTLY PROHIBITED. Copyright © 2015 by SAGE Publications, Inc. The Budget Process: An Overview 81 of the process, the executive presents the budget to the entire legislature. When the legislature is bicameral, this presentation is sometimes at a joint meeting of the legislature and other times is given separately at a meeting of each house. For larger jurisdictions, the proposed appropriation will be parcelled out to committees or subcommittees with jurisdiction over various subject matters. Each committee schedules hearings at which agency heads and other representatives of the administration testify on relevant elements of the budget. Some jurisdictions, particularly smaller ones, may compress this process, receiving only testimony from more high-profile agencies. Subcommittees and committees make reports to the next higher level body, recommending changes to proposed appropriation language and amounts. These reports accumulate into a jurisdiction-wide recommended modified appropriation act or ordinance. The legislature amends the budget and eventually appropriates funds. Executive Approval The appropriation may be subject to veto rules, and these may be subject to override rules. In some jurisdictions, particularly states, the veto can be applied by line or word, allowing the executive to restructure the budget by striking out only some elements. Where a veto occurs, there is a process for reconsideration that may lead to another legislatively approved budget. Processes differ by jurisdiction. For many school districts, the approval process is by popular vote rather than by executive fiat; state law provides guidance when the popular vote disapproves the budget. Implementation and Follow-On After approval, the budget—now an appropriation—must be put into action. The agency may adjust its originally submitted object code–level data with an updated operating plan and then track its expenditures as it proceeds to operate throughout the year. The tracking process involves producing periodic variance reports, which may lead to modifying what the agency is doing during the year. When the agency is overspending due to forces beyond its control, it must ask for additional funds, which the executive may reassign from other sources when it is within the executive’s authority to do so. Otherwise, the executive may request additional revenue through a supplemental appropriation. Over the course of the year, the agency makes periodic reports to the central budget office and to other entities such as the executive, the legislature, and possibly an auditing agency. When the year is over, the agency makes year-end reports. These reports, and sometimes other practices at the agency, are likely audited by a central government authority. Summary Budgeting is preparing a plan, a request for funds based on stated needs, that is submitted to a decision-making authority. More broadly, it involves participating in a process that may last between 18 and 24 months, perhaps even longer within some jurisdictions or for some components