DQ 1-1

PUBLIC FINANCE 1

( Budget Format Responses)

1.

Q. There is discussion in the text about the budget cycle which includes the first phase of planning and analysis at the agency, bureau, or department level; the second phase of policy formulation; the third phase of policy execution and reinterpretation; and the final stage which involves audit and evaluation of the implementation. (Lynch, Smith 2004) The budget cycle will start on day one of the budget development process and may continue for a few years until the final completion date. When I served as a business manager of a school district our budget development process started seven months prior to the start of the new budget year. There are some differences among federal, state, and local government budget cycles. Do you know what some or these differences are and can you give some examples?

Prof Smith

Lynch, TD. Smith, R.W. (2004) Public Budgeting in America. Upper Saddle Rover. NJ. Pearson.

2.

Q. There will never be full employment in a free enterprise system and there never was one in the history of our system. There will always be certain people who will be unemployed for various reasons. An interesting concept that has been discussed over time and more recently is there is always a gap between the number of people unemployed and the number of jobs that is vacant. Even today, there are millions of vacant jobs that can't be filled because the employers can't find people with the right qualifications. Thus, some say an answer would be to retrain unemployed individuals with the skills that are marketable in today's job market.

Any thoughts?

3.

Q.Since officials are elected there is no question that politics plays a role in the development of local budgets. At the school district that I worked for in the past, we also had tight budgetary controls over all of our financial operations. I was the business manager and it was my responsibility to use good and effective cost control techniques. One of the tools that I used was a monthly budget versus actual report of revenues and expenses. Each month I would track the trends of both categories in great detail to get an idea of how things are going. I would use the report to determine the key items that needed attention. The budget versus actual report was used not only to identify problem areas, but also to identify areas in which things were going very well. For instance, if our revenues were exceeding our budget estimates we felt very good about being able to operate with an effective budget.

 I believe politics plays a greater role as you move up from local to state and then finally to the federal government.

Do you have any thoughts on any of the information I provided above?