Chapter 15 - Working with the Budget

Question 1

Main functions of the budget

Answer 1

Control
Management
Planning

Question 2

Users of the local government budget

Answer 2

Elected officials
Chief administrator and department heads
Citizens
Interest groups
Business groups
You, the supervisor

Question 3

Two separate budgets

Answer 3

Operating budget covers
Personnel
Supplies
Equipment
Operation of facilities

Capital budget covers
Expenditures for capital items, which are more costly, are nonrecurring, and have a life span longer than one year

Question 4

Operating budget formats

Answer 4

Line-item budget
Program budget
Performance budget
Zero-base budget

Question 5

Line-item budget

Answer 5

Provides a clear explanation of what will be purchased
Offers strong central control over departmental expenditures
Helps elected officials compare new or proposed budget with previous budgets
Is widely used by smaller local governments and is the most traditional form of budgeting

Question 6

Program budget

Answer 6

Is organized according to major activities
Focuses on program goals rather than on expenditures
Sometimes includes line-item details
Used by many large and medium-sized governments and in grand-funded activities that cross departmental lines

Question 7

Performance budget

Answer 7

Is organized according to activity
Focuses on the work to be accomplished in each program as well as on the cost of doing it
Requires additional record keeping and good performance measures
Is becoming more prevalent in local government

Question 8

Zero-base budget

Answer 8

Organized like a program budget, but during the budget process, elected officials consider a variety of funding levels for each program based on service-level expectations of citizens and cost estimates
Requires preparation of alternative budgets for all programs
Requires a huge commitment of time in preparation and evaluation of alternatives
Is used by only a few local governments

Question 9

Capital budget

Answer 9

Funds one year of the capital improvement plan–a multiyear plan for the purchase and financing of major equipment or facilities
Financing may come from tax revenues, state or federal grant, long-term borrowing, or combination

Question 10

A capital improvements plan

Answer 10

Can reduce major fluctuations in tax rates
Encourages the coordination of capital and operating expenditures
Allows flexibility in scheduling bond issues
Helps local governments time capital projects to obtain state and federal funding
Helps taxpayers understand the community’s long-range needs
Can help pinpoint the reasons a tax increase is needed.

Question 11

Components of the budget document

Answer 11

The budget message
Revenue estimates
Program expenditures
Mission statements and departmental goals and objectives

Question 12

Steps in the budget process

Answer 12

Budget planning

Departmental budget preparation
Keep it simple
Provide enough detail
Separate capital items from operating expenditures

Internal budget review

External budget review

Implementation

Planning for next year

Question 13

To make the budget process go smoothly,

Answer 13

Prepare early
Keep track of changes in your workload
Identify ways in which your work unit can become more efficient
Talk to other supervisors
Practice.

Question 14

Possible reasons your budget request was changed

Answer 14

You asked for more money than was necessary.
Your budget requests were not clear.
Money is tight.
Priorities have changed.
The budget development process wasn’t a good one.
Luck.