Financial Management and Budget

Question 1

The Functions of Budgeting

Answer 1

	Linking resources and political needs
	Repetition
	Objective: Appropriate allocation of resources to politically 
defined tasks
	Programming

Question 2

The budget as an instrument for political control

Answer 2

 Budgets reflect choices what the state should and should not do
 Budgets reflect priorities within tasks
 Budgets reflect the importance dedicated to public services by politics
 Budgets are powerful instruments of accountability to citizens
 Budgets reflect preferences of citizens for specific forms and amounts of financing public services
 Budgets reflect the relative power of individuals or interest groups concerning state activities

Question 3

Actors in Budgeting

Answer 3

Line Manager; Chief of Treasury; Parliament; Financial Committee; Government; Chancellery; Controller in Offices, (Lobbyists)

Question 4

Critical elements of traditional budgeting

Answer 4

 Yearly prolongation of existing figures
 High degree of detailed, itemized information
 Difficult strategic setting of priorities, more control instruments necessary
 Orientation towards outputs

Question 5

Why do we need mid-term planning?

Answer 5

 Political influence on “strategic” decisions is systematically too late if we only have the yearly budget. It loses impact
 A lack of sustainable political direction leads to a decrease in effectivity of politics, and within the administration
 Pro-active politics has a perspective of more than one year. Without a long-term orientation, politicians are forced to act incrementally and re-actively
 Outcome orientation effective only in the long run

Question 6

Public financial management Model

Answer 6

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Question 7

Line itemized vs. one line budget model

Answer 7

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Question 8

Three Control Levels in the traditional system Model

Answer 8

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Question 9

Evolution of the Budgeting Process Model

Answer 9

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