Federal Budget Preparation

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Passing of budgets is a regular exercise that mainly occurs annually. There are several stages that accompany public budgeting process, which entail preparation and submission, approval, execution, and audit and evaluation. Budget process is a timeline activity with preparation of the budget as the first step in budget cycle. For Federal budget, budget preparation is concerned with compiling a draft budget, for presenting to the congress.

Preparation of the budget is an internal activity for the executives. During federal budget preparation, the fiscal policy is set followed by determining the total available resources for spending. At preparation juncture, the office of management negotiates with appropriate departments about allocation of funds.

However, the office of management is responsible for putting expenditure ceiling for each department. After drafting the budget, the office of management presents it to the president for review and make final ruling mainly on the contentious issues (Lee, Johnson & Joyce, 2008).

After coming with a comprehensive budget draft, the present takes the budget to the congress for approval. The budget has to get the approval of the congress in order to become effective. Before the approval, the congress scrutinizes the budget proposal from the executive.

This entail the congress assessing the setting of the fiscal policy, sources of revenues, as well as the expenditures. The role of the congress is to reject, approve, amend and in some cases substitute the budget proposal with their own budget format. Some government budgets requires passing of separate legislations for appropriation and alterations to the tax code. Some governments on the other hand take into consideration a unified budget bill as in the case of the federal budget.

However, the most important aspect in this stage is a comprehensive scrutiny of the budget proposal, irrespective of the adopted legislation. In public budget cycle, authorization of all public spending and taxation make sure that the rule of law in public finance. The duration that the budget proposal takes before approval varies from one country to another.

In the United States of America, the congress spends approximately eight months in reviewing the budget proposal presented by the executives before making their final ruling. Budget scrutiny takes a considerable time to increase its influence. Once the congress approves the budget proposal, the budget process proceeds to the next stage of implementation (Nikol, 2011).

The execution of the budget commences with the starting of the fiscal year. The implementation of the approved budget is mostly in the powers of the executives. The congress and the treasury play a significant role in ensuring that the apportioning of the funds is as per the approved budget. In some case and mainly in developing nations, budget allocated funds is sometimes used for other purposes rather than the purpose approved.

This results to adverse effects on the vulnerable groups that have less political influence. The congress does not allow misallocation of funds already approved for certain spending. To avoid excessive adjustments the congress keeps a close eye on the spending of the allocated money as well as funds apportioning.

Moreover, to avoid the undermining of the authority, the through-unwarranted adjustments, Congress make sure that any significant adjustment to the budget is captured in supplement apportions, which has been approved by the congress. During the adjustments, the congress should make sure that there is thorough scrutiny of the proposals presented in similar manner to the scrutiny of the budget formulation process.

Transparency is very important in public budget cycle. The implementation stage in public budget cycle is critical. This is because the allocated funds are likely to be deviated to other spending because of urgent cropping needs. For example, the funds allocated for spending in the infrastructure are often deviated if there is a natural disaster such as floods and storms that require immediate attention.

Therefore, despite the highly accurate forecasting process that accompanies the federal budget process, there are some new urgent public spending that are difficult to anticipate and therefore strict adherence to the budget is rare. During the budgeting process, the budget takes in account such considerations. Such concerns help in making sure that the budget remains authoritative even during instances of difficult economic crisis.

In response to such eventuality, the contingency reserve sets aside some funds for adapting the budget to cater for the emergencies or changing circumstances. In order to ensure accountability and transparency, the congress makes sure that it monitors the use of contingency reserves accordingly.

The use of any contingency reserve should follow approval of the congress. The fund set aside as contingency reserve should not be excessive to avoid causing inflation. Apart from the aforementioned aspects, other factors inhibit proper implementation of the federal budget.

For instance, introduction of new legislation like increasing entitlement such social grants brings conflicts with the budget constraints or medium terms of expenditure. Therefore, in the process of formulating policies, appropriate stakeholders should factor in short-term as well as long-term budget implications of the proposed legislations. The audit and evaluation stage follows the execution stage (Saturno, 2004).

In the audit and evaluation stage, an independent body such as an audit court analyzes the federal accounts and financial statements in order to establish whether the executives used the funds allocated by the budget appropriately. After the audits finish their investigations, they hand over the findings to the congress. After a thorough scrutiny of the findings presented by the audit team, if the congress finds that the audit and evaluation process is effective, the recommendations that by the audit team are incorporated in future budgets.

The incorporation of the audit recommendations helps in continuous improvements of future budgets and overall enhancement of public financial management. The law requires the auditors to present their findings as soon as possible after finishing their investigations and compiling the report for accuracy and accountability purposes.

Long delays in submitting the auditing findings may hinder accountability in instances where executives who are responsible for any loss of funds have retired or moved to other sectors. Moreover, public interest is mainly on current issues. In addition, delays in submitting the findings may result in difficulties in pursuing disciplinary measures of the responsible culprit (Schick & Lostracco, 2000).

The public budget cycle for the federal government is important as it ensures that there is a proper allocation of funds for appropriate departments to execute their functions accordingly. In addition, it ensures that there is transparency and accountability for executives who oversee the budget implementation process.

In conclusion: budgeting is not an event, but a process. The budget cycle does not occur in a distinct form, but rather in a continuous and interconnected manner. The role of the congress in the budgeting process should entail budget approval and review of audit findings. In addition, the congress should request for important documents used during the drafting phase. Moreover, the congress should access actual and estimates data of the revenues and expenditures to assist in monitoring the implementation process.

Reference List

Lee, R.D., Johnson, R.W. Joyce, P.G. (2008). Public budgeting systems (8th ed.). Sudbury, MA: Jones and Bartlett. IS.

Nikol, A. (2011). What is Budget Cycle? Retrieved from https://bizfluent.com/info-7791825-budget-cycle.html

Saturno, J. (2004). The Congressional Budget Process: A Brief Overview. New York: Prentice Hall.

Schick, A. & Lostracco, F. (2000). The Federal Budget: Politics, Policy, Process. New York: Prentice Hall.

Click Here To Order Now!

Federal Budget Preparation

Do you need this or any other assignment done for you from scratch?

We have qualified writers to help you.

We assure you a quality paper that is 100% free from plagiarism and AI.

You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)