unit 8/week 8 – pp 101 instructor flentroy-parker
TRANSCRIPT
Unit 8/Week 8 – PP 101Instructor Flentroy-Parker
Unit 8: Budgeting and Financial Management
Key Concepts to be Covered:Read Chapter 7Participate in the Discussion Board
(Post a response and 3-4 additional responses)
Attend and participate in this week’s Seminar
Complete quiz
Budgeting and Financial ManagementBudgeting and financial management as it relates to
public administration is concerned with utilizing limited resources on issues that governments and other entities encounter.
The federal government followed the lead of numerous local and state governments that had in place similar action such as the Budgeting and Accounting Act of 1921 that establishes the executive budget process.
It is a budget process that brings about order in reference to public spending.
Overall, the budget is the format for government priorities that controls the decisions made concerning policies.
BudgetingA budget depicts what you expect to spend
(expenses) and earn (revenue) over a time period.A budget is best defined as a plan that outlines an
organization's financial or operational goals.A budget is an action plan that helps a business,
agency, or entity allocate resources, evaluate performance, and formulate plans.
Understanding the importance of budgeting and how to budget is the first initial step in successful financial planning.
Budgets can help refine goals based on realistic resources.
Budgeting (cont’d)Budgets can also provide accurate information to adjust,
analyze, and evaluate programs and activities.It can be an aid in decision making.Budgets are useful for:planning your finances and then tracking if you're
operating according to plan.projecting how much money you'll need for a major
initiative.Budgets fall into several categories, such as: yearly
(operating) budgets, project budgets, cash budgets, etc.The overall format of a budget is a record of planned
income and planned expenses for a fixed period of time.
Example Budget
Previous Year Current YearRevenue Dues and activity fees ____________ ____________ Student government allocation ____________ ____________ Services rendered ____________ ____________ Commissions from machines ____________ ____________
Sales ____________ ____________Fundraisers ____________ ____________Program receipts ____________ ____________Other receipts ____________ ____________Prior year carried forward ____________ ____________
TOTAL REVENUE ____________ ____________
Expenses Personnel services ____________ ____________
Salaries ____________ ____________Hourly wages ____________ ____________Fringe benefits ____________ ____________ Workers compensation ____________ ____________ Social Security ____________ ____________ Insurance ____________ ____________
Operating expenses ____________ ____________Telephone line charge ____________ ____________Long distance ____________ ____________Other communications ____________ ____________
Office supplies ____________ ____________ Printing ____________ ____________ Postage ____________ ____________ Equipment rental ____________ ____________ Equipment repair ____________ ____________ Program expenses (Develop budget for each program)
Newsletter ____________ ____________Speakers ____________ ____________
Travel ____________ ____________ Outstanding debt ____________ ____________ Miscellaneous expenses ____________ ____________
Capital List by item ____________ ____________
Contingency ____________ ____________TOTAL EXPENSES ____________ ____________BALANCE ____________ ____________
Financial ManagementBasic skills in financial management start in the critical
areas of cash management and bookkeeping, which should be done according to certain financial controls to ensure integrity in the bookkeeping process.
If your small business is a corporation, you would do well to find someone experienced in financial management.
Once budgets have been prepared and approved by governments, the implementation of the expenditures must be carefully controlled.
A system of control utilizes standards, institutions or mechanisms to supply controls at all levels and phases of budgetary implementation.
Financial Management (cont’d)Financial management has become increasingly
pertinent in government.The activities exceed all departments and
agencies, while providing a system for managerial planning, control, and evaluation.
Financial management has become the principal means for effectively handling tax dollars and their corresponding usage.
Every program a government undertakes requires commitments of financial resources, making the finance manager’s role a crucial one.
Financial Management (cont’d)Another important role financial management
plays in government is accountability.Internally, financial management procedures
information that is critical to the decisions legislators and administrators make on policy formulation.
Externally, it produces information that is as pertinent to government overseeing agencies, citizens, creditors, and insurers as it is to the financial stability of the governmental entity.