Review of Revenue This activity will require you to access at least a portion of the federal budget as well as a state, local and an agency' budget. This can be done online; however, your references...

Public Budgeting 1
Public Budgeting
Public Budgeting 2
Public Budgeting
Introduction
In today’s world planning is one of the most important thing which is needed by the
organization to stay ahead. The organization focuses on setting up the goals which rests on the
profitability and growth of the organization. So as to achieve the set goals and targets the
organization needs to focus on strategic planning. The management focuses on executing and
implementing strategic planning on a continuous basis so as to achieve competitive advantage
and the set goals and targets of the organization.
With the proper planning, implementation and execution of planning, the organization is
able to achieve its set goals and targets and attaining a competitive edge from its competitors.
The plans made by the organization are short term as well as long term.
Budgeting
Budget is one of the most important aspects of planning. It can be termed as a detailed
plan which is expressed in quantitative terms and focuses on estimating the acquisition and
utilization of different resources during a particular period of time. Budgeting can be said as the
process which focuses on developing different budgets. It can be said to be an aid to the
management which helps in evaluating the performance of the organization. It helps in
evaluation and controlling different financial aspects of the organization. Budgeting also helps in
making different decisions in respect to capital projects and other financial aspects.
Budgets are made as per the discretion of the management. It is not a compulsory
statement that needs to be made by the organization.
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Role of budgeting in strategic planning process:
Budgeting helps in analyzing the performance of the organization and individual
departments. There is a strong inte
elationship among the processes of policy setting through a
strategic plan, budgeting the resources needed to deliver services that helps in accomplishing the
goals of the plan, monitoring operations and reporting on performance, and assessing
performance as it relates to the strategic plan. So through this we can say that the budgeting is
one of the tools which help in evaluating and monitoring the performance of the organization.
Key purpose of Budgeting:
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The five main purposes of the capital budgeting are: planning, facilitating communication
and coordination, allocating resources, managing financial and operational performance, and
evaluating performance and providing incentives.
Planning
The main purpose of preparing a budget is to focus on quantifying the goals and plans of
the organization for particular period. With the focus on the budgeting, the organizations are able
to focus on planning for the future.
Facilitating Communication and Coordination:
It is important for an organization to communicate the plans of each manager, so as to
achieve the goals of the organization effectively. If the other managers are aware of the plans of
the other department and other managers, then they will be able to coordinate and work
effectively and efficiently to achieve the set target of the organization.
Allocating Resources:
As the organizations has limited resources with it, budgeting helps in allocating the
esources to different uses which helps in improving the efficiency of the organization.
Managing Financial and Operational Performance:
Budgets are considered to be the benchmark of the performance of the organization
which forms the basis of comparing the actual performance of the organization. They are used to
evaluate and monitor the financial and operating performance of the organization.
Evaluating Performance and Providing Incentives:
The managers focus on comparing the actual results with budgeted results which helps in
evaluating the performance of the individuals, departments and the organization in whole.
Through this the performance is evaluated and can be used as tool for analyzing and deciding the
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incentive for the individuals and departments who perform well. Many companies focus on
awarding bonus to employees who meets or exceeds the benchmark.
Approaches to Budgeting
Incremental Budgeting
A simplistic and often used approach to budgeting is called incremental budgeting. In
essence, an incremental budget is derived from the cu
ent year's budget by adding amounts
expected to be required by line items, such as salary and wage increases and increases in the cost
of supplies and equipment to be purchased; decreases in line items that would result from
shrinkage in the scale of operations forced by pressures such as spending limitations mandated
y the electorate or cuts in capital equipment purchases. Incremental budgeting focuses largely
on controlling resource inputs and typically uses the line-item budget format in which the focus
is on departmental expenditures for specified purposes or objects, such as personnel, supplies,
equipment, and travel.
Incremental budgeting is often contrasted with rational budgeting approaches, which
stress the relation of inputs to outputs (amounts of work accomplished) and outcomes (impacts
on goals and objectives). Rational budgeting approaches, as they have evolved, attempt to
identify fundamental objectives of the governmental unit, estimate future-year costs and benefits,
and systematically analyze alternative ways of meeting the governmental unit's objectives.
Performance Budgeting
The evolution of the concept of a budget from “an estimate of proposed expenditures and
the proposed means of financing them” to an “operating plan” was a natural accompaniment to
the development of the concept of professional management. In public administration, as in
usiness administration, the concept of professionalism demanded that administrators or
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managers attempt to put the scarce resources of qualified personnel and money to the best
possible uses. The legal requirement that administrators of governmental units and agencies
submit appropriate requests to the legislative bodies in budget format provided a basis for
adapting required budgetary estimates of proposed expenditures to
oader management use. The
legislative appropriation process has traditionally required administrators to justify budget
equests. A logical justification of proposed expenditures is to relate the proposed expenditures
of each governmental subdivision to the programs and activities to be accomplished by that
subdivision during the budget period. The type of budgeting in which input of resources is
elated to output of services is sometimes known as performance budgeting. Performance
udgeting is a plan for relating resources inputs to the efficient production of outputs;
performance auditing is the subsequent evaluation to determine that resources were in fact used
efficiently and effectively in accordance with the plan.
Performance budgeting, at least in its earlier forms, focuses on the relation between
inputs and outputs of each organizational unit rather than programs.
Program Budgets
Program budgeting is a term sometimes used synonymously with performance budgeting.
However, the term is more generally used to refer to a budget format that discloses the full costs
of programs or functions without regard to the number of organizational units that might be
involved in performing the various aspects of the program or functions. Program budgets address
the fundamental issues of whether programs should exist at all and how to allocate scarce
esources among competing programs.
Planning-Programming-Budgeting System
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The integration of planning, programming, budgeting, and accounting has considerable
appeal to persons concerned with public administration because an integrated system should,
logically, provide legislators and administrators with much better information for the
management of governmental resources than has been provided by separate systems. In the late
1960s, there was a concentrated effort to introduce a...