Government Overview Final Project

Grace,

Good work. You addressed the required elements, including the two major budget reforms. Your information is accurate and well organized.

Budget Approaches

Professor P. May

AJS/574

Grace Acevedo

July 27, 2020

Budget Approaches

Public budgeting has to do with the expenditure and decisions on revenue collection for the general public's benefits. Public budgeting is important for any government that has assumed office to ensure the proper allocation of resources. Public budgeting also helps in optimizing resources by narrowing them down to the most crucial government functions requiring development. Aspects considered during public budgeting are such as underprivileged communities and the growing demand for social amenities such as education of health care services. Different budgeting approaches impact the development and implementation of government programs.

Public budgeting approaches differ in their usage of information, especially concerning expenditure and the categorization of expenditures. Swain (2015) outlined the lump-sum budgeting approach as entailing the proposition of expenditures as the total amount or lump sum. For the individual programs with a combined expenditure, their implementation would be in line with the fraction of its expenditure in the entire amount. Relatively, the implementation of programs covered by the expenditure in the lump sum budgeting is dependent on priority. Swain (2015) outlined zero-base budgeting as a “what if” budget, meaning that the organization of expenditures is dependent on the work requiring completion due to priorities labeled as outcomes or outputs. As such, events with the most outcome are given preference. Swain (2015) highlighted the program budgeting approach as arranging the expenditure depending on the desired results. As such, the programs that would yield the desired result would be implemented first with the others taking a step back.

Two of the major budgetary approaches are performance and program-based budgets. Harun and Vyas-Doorgapersad (2016) outlined the performance budgets as narrowing down to measurable aspects of efforts or services whose expenditure associate with set objectives. As such, the expenditure target results that gear towards achieving the goals of a particular entity. Brumby (GGG) highlighted top-down budgeting as entailing the division of the various aspect of budget decision making while formalizing the interactions between the said components. This reform approach ensures the prioritization of the key elements of a decision-making process. As such, the considered aspects would be the most important to the decision-making process and contribute to achieving the most needed requirements. It is through this reform that noncrucial programs receive a less important treatment. The other approach is hierarchical. This approach strives to ensure the achievement of aspects depending on the hierarchical arrangement. This arrangement depends on the level of importance and how crucial the changes would be to the public.

The highlighted approaches would be of great importance to communities striving to cope with decreased funds. The top-down approach helps in capitalizing on the crucial projects in a country. Services rendered to community members are important for the achievement of the desired goal while eradicating particular challenges. However, the level of importance among programs differ. In the wake of a shortage of funding, it would be imperative to capitalize on the most critical programs while concentrating on the other programs when funds are allocated at another time. Using the hierarchical approach, available funds are utilized depending on a set order of programs. This order outlines the programs that would be fulfilled first, and which would follow next. This hierarchy could be predetermined due to the anticipation of a shortage of funds. On the other hand, the order could be what is developed and to be followed despite the absence or presence of adequate funds.

The budget office has a lot to learn from the budgetary reforms. First, expenditures are recurrent and is something that cannot be avoided. As such, it is important to have a week laid out plan to navigate the expenses associated with the various programs in society. Also, the level of importance differs among the various programs. It is crucial to determine the most important programs that people, or entities cannot do away with. Also, it is important to determine the less important programs. Such an understanding would help in the determination of the order to follow in completing programs. The approaches highlighted the importance of results in the determination of expenditures to particular programs. Results with a high association to an entity's objectives should be given priority. What should follow next are the components that influence the said results. The other thing that could be learned is the formalization of interactions as denoted in the top-down budgeting reform. This move ensures that individuals do not take interactions between components casually. These interactions could impact the budgeting process and the performance of the entire system.

References

Bromby, J. Chapter 16. Budgeting Reforms in OECD Member Countries. https://www.internationalbudget.org/wp-content/uploads/Budgeting-Reforms-in-OECD-Member-Countries.pdf

Haruna, F. P. & Vyas-Doorgapersad, S. (2016). Public Budgeting in African Nations: Fiscal Analysis in Development Management. Routledge

Swain (2015). Budgeting for Public Managers. M.E. Sharpe