Week 4 Reflection

CHAPTER 5: BUDGETING AND FINANCIAL MANAGEMENT

Overview

After examining the public policy dimensions of public budgeting, this chapter reviews the budget as a tool of management, budgeting strategies and various aspects of budgeting procedures and techniques. The budget as an accountability device is emphasized throughout the chapter.

We will discuss a previous budget shortfall for the City of Vallejo, California, with the City of Austin, Texas, as a resource. We will examine possible reductions of proposed expenditures and means to increase revenues.

MicroLecture

Human Resources and the Budget

The readings this week are relevant in a time of budgetary crisis and workforce downsizing (right sizing?). Cost reduction, cost avoidance and cost recovery are crucial to effective management of public finances. This focus drives much of the HR policy and practice. Workforce management applies to all jurisdictions, particularly those with large bureaucracies, which are moving in the direction of restructuring departments and sections into teams, committees, project groups, and/or task forces. The goal of organizations by instituting things like smaller teams is increased group dynamics, communication, and engagement. As public organizations respond to increased demand for public services, effective and efficient communication between and among the organization's members becomes increasingly challenging. The internet has contributed substantially as a new mode of organizational communication.

Questions about HR to consider as you explore the readings:

· Early classic management theorists argued that reorganization and restructuring is the key to a public organizations efficiency. Many argued that flat organizations are the best -- less bureaucracy, more decentralized. Do you agree with their observation?

· As the human resources school grew, many authors argued that reorganization was not sufficient to increase efficiency and effectiveness. Behaviors of people within organizations needed to be modified. What are some of the challenges to behavior modification?

Questions about the Budget to consider as you explore the readings:

· Compare and contrast the different types of budgeting processes/systems used in the public and not for profit sectors.

· Do a little bit of research to find out which one is used in your current organization. What are some of the budgeting process issues you are facing?

Lesson: Public Budgeting

One of public administration's most prolific scholars, Aaron Wildavsky, provides several descriptors for the federal budget in his classic work,The New Politics of the Budgetary Process (1988).. The federal budget, according to Wildavsky, is a:

· Prediction: The structure of a budget is a series of proposals for spending programs, projects, people, and things.

· Contract: The Legislative and Executive branches promise to supply and spend funds in a specific manner.

· Conflicting commitments: The federal budget is a representation of the commitments the federal government has made to various constituencies. These commitments are expressed by means of laws. Wildavsky differentiates two general categories of law: appropriations acts and entitlements acts as the primary means of expressing these commitments. Appropriations acts give federal agencies authority to spend a specified level of funds. Entitlements acts , on the other hand, do not specify an upper limit, Anyone who qualifies for entitlement funding, such as social security or veterans benefits, must receive payment. The amounts expended for these programs can be forecasted, but not specified in advance.

· Struggle for Power: Historically, the budgetary process has been a struggle between the legislative and executive branches. Between1995 and 1996 the federal government was shut down twice because of a budget stalemate between Congress and the President. When media reports alleged that the second government shut down was the reaction of the Speaker of the House to a perceived Presidential snub, public reaction was vociferously negative regarding the Speaker of House and his legislative action.  During President Obama's second term in office, Senator Ted Cruz, now a presidential candidate, lead the efforts that resulted in a shut down of the government over the budget fight.