1-2 Summary Flashcards
Government is a sovereign entity with the poser to tax income and wealth, borrow money and incur debt. National governments also use central banks and monetary policy to impact the economy.
However, government sovereignty is constrained through various means.
Legal constraints include constitutions, laws, statutes and ordinances.
The appropriated budget provides legal authority to spend, and serves as a constraint on government spending.
A budget also serves other purposes. It is an expression of public policy, reflecting public values and negotiations among branches and components of government.
The appropriated budget also serves as a financial plan, defining expenditures for the period by program and object class and the source of funds. Finally, the budget is an important communications device.
The primary purpose of the budget process is to prioritize government expenditures and allocate financial resources to fund them.
The use of special funds and legislative earmarks are ways to designate money for specific purposes.
The budget process embodies the essence of democracy; citizen involvement, separation of powers, and checks and balances.
The budget process never sleeps. When the chief executive submits the proposed budget to the legislative branch, debates are already underway regarding the future budget, and still more debates may be underway on how to reprogram funds from the current budget.
A number of legal constraints on government are related to the budget. The appropriated budget is a law that defines government spending in terms of purpose, time, and amount. It further constrains activities through the use of special funds, programs and object class limitations.
Apportionments and allotments are further control techniques. Every government entity should have a formal internal conternal control program to safeguard public resources and ensure objectives are achieved.
External audits provide objective review of government finances and performance.
The phases of the government management cycle (which is introduced in section II and elaborated in section III) are planning, programing, budgeting, operations, accounting, reporting and auditing.
