Category: Budget

Introduction

The American constitution gives the Congress the mandate to provide for the common defense of the nation as well as its general welfare. However, it does not provide information that defines the term ‘common defense’. Additionally, it does not give any specific guidelines for the budgetary allocation of the defense budget. For the last few decades, most of the Americans were of the opinion that common defense entails the activities of a single agency, the Department of Defense (DoD), in enhancing national security (Brook 33).

However, national security can only be achieved by coordinating the several state agencies and requires sufficient funding/budgetary allocation. The defense budget cuts are making many Americans feel insecure since all the agencies involved may not be able to function effectively due to the lack of funds and the development of modern threats to national security. The defense budget cut will impair the efficiency of the bodies responsible for the maintenance of national security.

Defense budget in the U.S

A significantly large portion of the United States’ Gross Domestic Product (GDP) is used in funding the agencies under the National Security Council. The agencies include Department of Defense, Department of Homeland Security, Department of Justice, Department of Treasury and the Department of Transport among others. The increase in military expenditure began after the Second World War. Prior to the War, the budgetary allocation of national defense was less than 2% of the GDP.

This proportion increased during the war whereby national security expenditure required a third of the GDP. According to Wilkerson and Williams, the expenditure dropped after the Second World War to less than 7% of the GDP (50). However, the expenditure rose again to over 14% due to the Korean War, Cold War and the Vietnam War during the 1950s and the 1960s.

Towards the end of the1970s, the expenditure on national defense had dropped to 7% of the GDP and the decline in the expenditure/budget continued for the next two decades. In 2000, the national defense expenditure had dropped to 3.8% of the GDP, which is the lowest expenditure that has ever been recorded in the history of the U.S. Over the last one decade, national security has exhibited an increasing trend in its expenditure.

The increase of the national defense budget over the last one decade is justifiable. The United States has been experiencing some non-traditional threats to national security. They include terrorist attacks from some of the world’s famous terrorists, drug trafficking and cyber attacks, which threaten the well-being of the United States.

Other forms of national threats include the spread of infectious diseases and energy threats. Besides the potential threats, the other factor that calls for sufficient funding of the national defense system is the complexity of the contemporary global security environment.

Its key features include stiff competition for the scarce natural resources, population changes and economic struggles. Additionally, many nations are fighting for not only regional but also global power, a battle that the Americans have to face. The recent advancements in technology also pose a threat to the national security system since a single computer command can cause as much damage as the previous decades armed forces.

For effective national security, the Congress has to consider the different parties that should be involved in ensuring national security. This stands as a fundamental aspect in strengthening the national defense capacity. The main areas that have to be addressed keenly are diplomacy, defense, intelligence, strategic communication systems, homeland security and the general economic development of the nation. Coordination of all these areas is essential in providing defense against any form of modern threats.

The reduction of the national defense budget may hinder the coordination of various parties responsible for maintaining national security due to the lack of sufficient resources. Consequently, the United States will be vulnerable to the insecurity from both local fugitives and terrorist groups.

Research has shown that the in the past, United States always regretted the reduction of the national security budget (for both the Department of Defense and the intelligence community). The lack of huge conflicts that call for strong defensive mechanisms should not be a guide to the reduction of the defense budget.

If the government does not invest adequately in building the nation’s defenses, then it might find itself in the future rebuilding them in case of an attack. As aforementioned, the modern forms of security threats such as the proliferation of nuclear weapons, biological and chemical attacks call for America to build effective defense against them.

The effects of the cut to national security

The reduction on the amount of money allocated to national defense reduces the capability of maintaining national security, an aspect the U.S cannot afford since other nations are embarking on strengthening their weapons. For instance, China has been able to field diesel submarines, an aircraft carrier, cyber-weapons and a J-20 stealth fighter.

It has also build ‘carrier-killers’ and among other missiles, a satellite-killer ballistic missile. China is able to contest the freedom of movement of the Navy in the Western Pacific. The other nations that present a threat to the United States national security are North Korea and Iran due to their involvement in the development of weapons of mass destruction.

Terrorist groups also present an eminent attack on the Americans. Such groups include the Afghan and Pakistani Taliban, Al-Shabab in Somalia as well as the Al-Qaeda in the Arabian Peninsula (Boot 17). These terrorist groups threaten not only the American interests abroad but also the American homeland. For instance, Pakistan’s Taliban recently sponsored an attempt of a terrorist attack to set off a car bomb in Times Square. Additionally, another terrorist group (AQAP) attempted to mail parcel bombs into the U.S soil.

The fact that the American military forces are unable to ascertain the safety of the U.S navy base in Guam, Okinawa and other places shows that the national defense requires more resources. The cut on the defense budget not only threatens the maintenance of the American military power but also narrows its chances of expansion an aspect that threatens the ability of the national defense forces to provide security to the U.S citizens.

The American Navy is one of the most important military instruments in the nation. Most of the times, its operations are based many miles from U.S shores and it does not require any authorization from other sovereign nations to do so an aspect that extends the defense perimeter of the U.S Homeland security.

This gives it the ability to perform some of the roles of Homeland security boosting the national security. It is able to perform surveillance of both airborne and seaborne threats besides gathering information for security purposes. It is also able to disrupt terrorist attacks ashore since there is a decrease in the acceptance of U.S troops stationing abroad.

The navy plays other important roles as far as national security is concerned. It provides for modulated military response, effective conventional deterrent and bolsters critical security balances (McGrath 50). It provides America’s survivable nuclear deterrent besides fostering defense, diplomacy and development.

However, the Navy is currently facing some threats. Certain nations e.g. China have heavily invested in the development of a series of networked and technologically advanced weapons and sensors with the aim of denying the United states’ naval forces the freedom of maneuver, which is the primary source of the U.S sea power. The military drawdowns over the past four decades led to a 33% reduction of the resources of the Department of the Navy.

This includes 18% reduction of its work force and a similar reduction of its battle force. It is evident that the naval force is already strained. Therefore, any further cuts that affect the availability of resources will be affecting a force that has already grown smaller and worn out due to its participation in wars in the past. The result would be the inability of the navy to not only maintain but also to gain sea control, which is currently threatened, posing a threat to national security.

It is evident that the cut of the defense budget will reduce the number of personnel in the various bodies that deal with the maintenance of national security. Some of the cuts such as the reduction in the number of F-22 fighters, missile defense interceptors, navy cruisers, strategic delivery systems and missile-defense interceptors are detrimental to the integrity of the national defense forces.

Rumsfeld notes that such reductions “leave America ill-prepared for a conventional conflict and erode the strong deterrent necessary to prevent it” (5). There will also be a reduction of the number of the Federal Bureau of Investigation agents, correctional officers, federal prosecutors as well as the Customs and Border Patrol/protection agents.

According to Fields and Block, customs and border protection personnel constitute a relatively large proportion of the homeland security-more than a third (15). Their role being the inspection of every person and product that enters the U.S, the cut will increase the polarity of the U.S borders due to lack of sufficient personnel. The cut will also occur in the Federal Aviation Administration lowering the body’s ability to carry out its duties i.e. to manage and oversee the nation’s airspace.

Its ability to control air traffic will also be impaired paving way for space attacks. The agricultural sector’s ability to inspect all the food-processing plants will be undermined. As a result, the safety of the food products available in the American market might be jeopardized due to the processor’s deliberate failure to meet all the food production standards. This poses a threat to the health of the people.

The cut on the defense budget will affect the operations of the National Security Space Architect (NSSA). NSSA was established to enhance the co-operation of the DoD and the intelligence community. It develops, coordinates and integrates the space system architectures of the two bodies for the provision of better defense.

Ferell stated that the NSSA is embarking on a comprehensive plan for enhancing national security that projects the space and programmatic needs of the two bodies (5). He added that the project would need some assets that are necessary for the acceleration of the certain technologies that may not be available with the resources that are at their disposal. Lack of sufficient funds will slow down or even sabotage the acquisition of the technologies, which renders the U.S defenseless.

The proponents of the cut on the defense budget argue that the amount spend on the U.S armed forces undermine the economic development of the nation which is the backbone of national security. Research has shown that currently the national defense spending, which also includes all supplemental appropriations, accounts for less than 5% of the GDP and less than 25% of the federal budget.

Compared to the national defense expenditure of most of the last century, the current expenditure is low implying that the budget does not need to be cut-it is eminently affordable. Following the report of the bipartisan Quadrennial Defense Review Independent Panel chaired by Stephen Hadley and William Perry, to achieve full military ability for national security, the U.S needs to increase the budgetary allocation for defense.

The panel found out that there “is a growing gap between our interests and our military capability to protect those interests in the face of a complex and challenging security environment” (Boot 18). The reduction of the national defense budget implies that the nation will not be able to achieve all its interests as far as national security is concerned which may instill fear in the citizens.

The defense budget cut will have a negative impact on the already strained military health care. It will lead to the provision of poor medical services to the military personnel lowering their productivity. Consequently, the efficiency of the military in providing national security will decline which is a great risk to the American community. The effect will not only be felt within the military but also to all the civil servants whose sole duty is to ensure the security of the nation. The nation will become vulnerable to foreign pressures.

The United States may not be able to defend itself against rogue states such as Iran without a fully developed missile defense system. The system is expected to be operational in 2018 (Armellini 1). The defense budget cuts may slow the process of developing such an important defense tool rendering the nation unable to protect itself effectively from missile attacks from not only rogue nations but also terrorist groups.

Additionally, the United States government needs to increase the availability of the number of unmanned drones and more forms of spy plane technology to enhance national security. The lack of enough funds for such technologies would increase the number of security threats due to missile and other airspace attacks.

The armed forces would not be able to defend the nation effectively in such attacks. Owing to the global technological advancement in the development of weapons, the United States requires a continual upgrade of their technologies, which may not be possible due to lack of resources. In such an instance, the national defense system will not be able to protect the nation against attacks in the near future.

Since 1990, the force has exhibited a declining trend. For instance, during that time, the navy had 546 ships and this figure has reduced to 288. The army currently has 45 brigades as compared to 76 brigades in 1990. Research has also shown that the air force had twice as many fighter squadrons and bombers as there are today (Merklinghaus 17).

The armed forces need to recruit more personnel since it is ageing with time. If the cuts of the national defense budget push through, the United States will end up in an unbalanced defense force that is not modernized which may affect the lives of many Americans.

Conclusion

The defense budget cut will impair the efficiency of the bodies responsible for the maintenance of national security. The cut hinders the development of technologically advanced weapons rendering the nation defenseless. The lack of sufficient funds will result into the provision of poor healthcare services to the armed forces lowering their ability to defend the nation against attacks.

The cut will force the National Security Council to down size on its personnel, which is detrimental to national security especially due to the increased polarity at the borders. The decrease of the strength of the United States defense forces will render the nation vulnerable to the attacks of terrorist groups such as the Al-Qaeda and the Pakistani Taliban among others. Other nations such as Japan, North Korea and China are heavily investing in advancing their weapons.

The defense budget cuts will pave way for these nations to overpower the U.S, which is a threat to the nation. Politically, the 2012 general elections will determine the fate of national defense depending on the elected president since the candidates hold different opinions concerning the national defense budget.

Works Cited

Armellini, Mark. “Roundup: Dramatic US Defense Cuts on the Way, Panneta Warns NATO.” McClatchy-Tribune Business News, 1.3 (2011): 1-6. Print

Boot, Max. “Slashing American Defense: A Suicidal Trajectory.” Commentary, 133.1 (2012): 14-19. Print.

Brook, Douglas. “Budgeting for National Security: A Whole of Government Perspective.” A Journal of Public Budgeting, Accounting and Financial Management,4.1 (2012): 32-57. Print.

Ferell, Stephen. “NSSA Eyes National Security Plan to Outline Future Budget Needs.” Defense Daily International, 3.12 (2002): 1-5. Print

Fields, Gary, and Block, Robert. “Homeland Security Freezes Hiring; Potential Budget Shortfall of $1.2 Billion is Affecting two Big Front-line Units.” Wall Street Journal, 4 (2004): 15-16. Print.

McGrath, Bryan. “The necessity of Dominant American Sea Power.” U.S Naval Institute Proceedings 137.1 (2011): 48-53. Print.

Merklinghaus, Dennis. “Are the Cuts to the Defense Budget Necessary?” News Digital Weekly, 3.44 (2011): 17. Print.

Rumsfeld, Donald. “The Peril of Deep Defense Cuts; Our country has taken an axe to the national security budget after every war of the 20th century. And every time we later regretted it.” Wall Street Journal, 21 (2011): 5-11. Print.

Wilkerson, Chad, and Williams, Megan. “How is the Rise in National Defense Affecting the Tenth District Economy.” Economy Review, 2 (2008): 49-80. Print.

Budget analysis is vital for governments to realize the sources of income and expenditures during a fiscal year. While budgets are evaluated annually, the assessment of trends throughout several years may be ignored. The absence of such an analysis may lead to a failure to recognize internal and external opportunities and challenges. The present report evaluates the past three years of the income distribution of Floyd counties and offers suggestions about possible improvements.

Trends in Revenue Sources and Balances

The city of Rome’s government managed to keep a balanced budget during the previous three years with no debt. According to Figure 1, the primary income sources of the city during the three years were Ad Valorem Tax and Local Option Sales Tax, which are attributed to more than 50% of the government’s annual income. At the same time, intergovernmental income and interest are secondary sources of revenue.

The yearly income surpluses the expenditures by more than $1.5 million yearly (Governments of Floyd County and City of Rome, GA., 2019); therefore, the government experiences no shortages in funds and gradually increases its revenues from the bank deposits. The income from all the sources is growing steadily, with the most significant increase in charges and services revenues. At the same time, the income from fines and forfeitures is decreasing, especially if compared to the years before 2016 (Governments of Floyd County, 2019). In short, the analysis demonstrates that the government executes a long-term budgeting strategy that helps the city avoid loans, increase the income from deposits, and save money for future unexpected expenditures.

Ethical Practices

The government of the city of Rome ensures that all the financial policies on taxes, fees, and charges adhere to ethical standards. First, the government discloses all the financial information and reasoning for changes in taxation (City Commission, 2019). Second, the government makes sure to diversify its sources of income in order to prevent the citizens from being overburdened by taxes (City Commission, 2019). Third, the city has set a cap on several taxes in order to avoid exploitation (City Commission, 2019). In short, the adopted policies ensure accountability and openness.

Opportunities and Challenges of Revenue Sources

While the budgeting strategy is adequate, there are several opportunities to improve the outcomes. First, the city can increase liquor and wine tax since the policy can increase the income and decrease the amount of alcohol consumed by citizens. Second, the city can benefit from intergovernmental revenues by offering police and fire department services to the neighboring counties. At the same time, there may be challenges the city will face in the future due to the increase in charges for services. The public may be dissatisfied with the practice. In short, their areas of improvement for the government to ensure the stability of the budgeting strategy.

Conclusion

Historical perspective on budget analysis is of extreme importance for local governments to appreciate the threats and opportunities of the employed practices. The city of Rome has a robust financial policy concerning fees and taxes that helps to ensure a balanced budget. The income from the majority of sources is growing in accordance with the changes in expenditures. The government remains accountable and open by employing practices adherent to ethical standards. While the budgeting strategy is adequate, there are several opportunities and challenges.

References

City Commission. (2019). Code of the city of Rome. Web.

Governments of Floyd County and City of Rome, GA. (2019). Trends. Web.

Introduction

Treatment of chronic kidney disease (CKD) is a major challenge for major health care facilities across the world. With the increase in the prevalence rate of CKD the cost of administering the treatment of the diseases is also expected to increase. The paper seeks to develop a budget for a CKD program. The budget will be for a period of one year.

The budget

The budget will have two segments, these are, revenue and expenditure. The costs can be categorized grouped into direct and indirect costs. The direct costs relate to directly to the health care provided for patients with chronic kidney disease while the indirect costs are other auxiliary costs (Penner, 2013). The department will invest in capital equipment, information technology equipment, infrastructure, and operating expenses. The table presented below shows a summary of the budget for the CKD program.

Table 1.0 – Operating budget

Table 1.1 – Capital budget

Justification

Operating Budget

The information provided in the table above indicates that the total revenue raised for the chronic kidney disease program will amount to $1,818,332,250. Out of the revenue raised, $1,642,877,250 will be allocated to operating expenses while $175,455,000 will be apportioned to capital expenditure. The main source of revenue for the program arises from the ministry of health. The allocation by the ministry of health is based on predetermined funding guidelines.

The second category of revenue item is the allocation from other provincial departments. This contains allocation received from the county government. The allocation is also based on predetermined guidelines and it amounted to $19,766,250. The third revenue item is donations and grants. This category contains funds received from various organizations such as research institutes. Grants and donations amounted to $1,225,000.

Further, fees from patients will amount to $40,000,000. The estimated number of patients who will be attended to during the year is 10,000 at an average cost of $4,000 per patient. The fees relate to charges for supportive care, home care and other services provided by the hospital.

This generates total annual revenue amounting to $40,000,000. Other revenues amounting to $52, 625,750 arise from miscellaneous sources such a coffee shop and patient and agency charges among others. They also relate to money received from other sources that do not fall into the categories discussed above.

A significant percentage of the expenses will relate to medical services provided to the patients and residents. The total expenses relating to inpatient and residents amounted to $1,226,477,000. The expense can be categorized into compensation and medical & surgical. Compensation relates to amount paid for salaries to employees, medical remuneration and benefits, and purchased salaries among others.

On the other hand, medical & surgical supplies relate to diagnostic imaging supplies, drugs, laboratory supplies, medical and surgical supplies, prosthetics, and therapeutic supplies. Further, the budgeted amount for the provision of primary and home health care services amounts to $208,393,500. These are costs related to the provision of health care services. Operational support costs amount to $234,941,000.

The category contains costs such as information technology contracts, utilities, repairs and maintenance, insurance, rent, and lease. The administration cost amounting to $110,953,500 contains expenses that relate to general support services. Examples of expenses in the category are advertising and public relations, board and meeting expenses, office supplies and other office costs, professional fees, outsources services, housekeeping and laundry supplies, and other general supplies that are related to the CDK program.

Capital budget

The budget is used to record expenses for projects that are expected to run for a period of more than one year. As mentioned above, out of the total revenue generated, $175,455,000 is allocated to capital expenses for the program. Revenue for the expenses will originate from ministry of health, other provincial departments, donations & grants, and other sources. The budget indicates that $18,515,000 will be used to purchase diagnostic imaging equipment and $17,759,000 will be spent on the purchase of other medical / surgical equipment.

Further, the cost of information technology amounting to $23,002,000 will be used for various expenses that relate to information technology. Some of the expenses in this category are installation of E-Health, wireless network, enterprise backup, RUH UPS upgrade, and desktop virtualization among others. Finally, the cost of $180,505,500 for capital projects relates to cost of renovation of various structures that will be used for the program. It will also include the cost of demolition and construction of new structures for the program.

Reference

Penner, S. (2013). Economics and financial management for nurses and nurse leaders. New York, USA: Springer Publishing Company.

Introduction

Background information about the agency, mission, goals, objectives, departments and strategic plan

Oklahoma City originated from a Land Run that occurred in 1889. It is the largest city in the state of Oklahoma. As of 2010 census, it had a huge population amounting to approximately 580,000. It has one of the largest livestock, oil, and gas markets in the world. The main aims of addressing budgetary needs are to improve the quality of the educational institutions and to build a better and highly skilled workforce. Such moves are essential in ensuring that the city maintains impressive growth in the future.

The city has various agencies which have diversified missions. For example, the Alcoholic Beverage Laws Enforcement Commission (ABLE) has the responsibility to safeguard the public’s well being and awareness by implementing rules and regulations relating to alcoholic drinks and other harmful drugs. The mission of the Department of Agriculture, Food and Forestry (ODAFF) is to increase the agricultural products’ value and to improve the city residents’ value. Last but not least, the mission of the Arts Council department is to lead, create, and support a prosperous arts environment that offers quality life and economic growth (History of Oklahoma City, 2013).

The goals and objectives of Oklahoma City are also determined by the goals of the various agencies that form part of the city’s budget. For example, ABLE’s goals are to control and implement Oklahoma’s laws relating to liquor. This is done to observe and enhance public safety. It also enforces tobacco compliance rules. ODAFF’s goals and objectives are to ensure consumers have access to safe and quality agricultural products. The agency also aims at protecting and conserving the city’s agricultural and natural resources. It also ensures the efficient and effective delivery of agricultural services by employing well knowledgeable employees. The goals and objectives of the Arts Council Agency are to provide public policy development and to retain the city’s creative workforce. By so doing, the agency creates self-employment and self proprietorship businesses, which become future revenue sources (Fallin, 2013).

There are various departments within Oklahoma City’s budget. They include:

• Oklahoma Department of Education Cabinet
• Department of Agriculture Cabinet
• Banking Department
• Oklahoma Department of Commerce and Tourism Cabinet
• Department of Central Services
• Consumer Credit Department

Budget Overview

The budget of the agency has addressed the following items (Oklahoma’s Own, 2013):

Financial Summary, including revenue and expenditures

Oklahoma City has apportioned $6,717,773,223 to its total revenue for the next financial year, 2013. It has also apportioned $6,717,766.766 to its total expenditures for the next financial year, which leaves behind a balance of $6,462. Part of the net budgetary balance is carried over to the following financial year. However, if the actual expenditures would exceed the actual revenues, then the city would be forced to seek alternative funding and sources of revenue.

Departmental Budgets

Every department has been apportioned a given amount of funds. For example, the energy, environmental quality, and water resources departments were apportioned $13,057,644, the department of environmental quality and water resources was apportioned $13,057,644, and the department of health care, mental health, and substance abuse was apportioned $1,230,320,762. The human resource department was apportioned $712,576,165 while the military department was apportioned $10,247,996. The budget allocations are quite high, which reduces the level of budget reserves.

Funding

Some of the city’s funding comes from refunds. For example, the city has outstanding bond obligations, which get refunded by the debtors. This helps it to raise some finances used in budgetary allocations. Also, the city expects to market some of its securities at favorable interest rates to raise more money. It has also reduced its expenses on employee salaries, benefits, and travel expenses to raise more cash for its budget. Lastly, the agencies receive funding from the state of Oklahoma to cater for public services such as security, defense, water, and sanitation. The General Revenue Fund is the main source of the city’s operations. The fund receives its monies from taxes, fees, and benefits from investments. Therefore, the city needs to keep on increasing its investments to raise more revenue.

Capital Projects

Capital projects are projects that cost a minimum of $25,000 with a lifespan of five years. Some of the approved capital projects in Oklahoma City’s budget are therapy and physical labs, Clinton’s Food Service area, and renovation of Geothermal and system at Lawton and Norman centers. These projects offer services at subsidized costs, and they also act as the city’s sources of revenue. Such projects are allocated huge amounts of the budget’s funds because they are expected to reap huge benefits in the future.

Debt Administration

Oklahoma City governor, Fallin, has allocated $5 million to clear off the debt incurred from a bond issue of $50 million. This will help improve the level of funds allocated to mechanical, electrical, and plumbing systems in the major buildings. The city’s administration also controls debts by reducing expenses such as travel and staff salaries.

Cost Analysis

Some of the costs covered under this section are:

Fixed Costs

These are costs that do not change with change in the level of goods and services produced. Some of the fixed costs incurred by Oklahoma City are building costs, laboratory equipment costs, military equipment costs, and costs associated with solar panels and motor vehicles (Your City Budget 2013).

Step-fixed Costs

Step-fixed costs are expenses or costs that remain fixed but which change when certain conditions change. For example, Oklahoma City’s costs of disaster recovery rise when there are calamities such as storms or floods. The same costs remain fixed when normal weather conditions resume (Your City Budget, 2013). Although such costs are usually budgeted for, they can consume more funds. Disasters such as storms may cause displacement of city residents, health risks, and destruction to property. Disaster recovery becomes very expensive in such instances and can drain the only available funds.

Variable Costs

Variable costs change with an increase and decrease in business operations. Some of the variable costs that face Oklahoma City are fuel costs, costs related to paper storage and printing, costs associated with professional consulting and counsel, labor, material, and travel costs (Your City Budget 2013).

Budget Challenges

One of the major budget challenges that face Oklahoma City is funding. For example, the city’s rehabilitation services department lacks sufficient funding. This results in reduced service levels, which has affected the quality of services in hospitals and in times of natural calamities. Additionally, the department of career and technology has been experiencing funding deductions, which has seen 31 employees getting laid off.

The other challenge is debt management. For example, there are various debts owed to municipal councils, state agencies, and higher education institutions. Tax evasion by businesses and few self-employed persons is also a major challenge for the city’s administration (Proposed Budget Focused on Priorities, 2013).

Budget Recommendations

This section recommends methods that the agency should analyze in regards to new initiatives and budget cuts over the next three years

Oklahoma City ought to establish more effective means of tax and debt collection to lessen the level of debts owed to it. This can be done by conducting more audits on tax returns. The city’s officials can also list the tax evaders on reference bureaus to curb the crime.

The city should also introduce more sources of income to increase sources of revenue and funding. For example, the city can conduct more audits on the newly established businesses to ensure that they pay their bills and city council rates. By creating youth funds, the city can encourage innovation among the youth, which can help them to establish businesses. As a result, this can create more dispensable income and reduced borrowing.

Lastly, it is recommended that the city should regularize the level of capital expenditure to be able to cater to the basic needs of its residents. For example, water and sanitation are very basic, yet the departments that cater to such needs receive reduced funding. The two commodities are very basic, yet they receive less funding than other departments such as technology and arts. Therefore, funders promote creativity and development but fail to recognize the most fundamental needs.

References

Fallin, M. (2013). State of Oklahoma: Executive Budget for Fiscal Year Ending 2013. Web.

History of Oklahoma City. (2013). Web.

Oklahoma’s Own: Oklahoma City Council Approves $1.028 Billion Budget. (2013). Web.

Proposed Budget Focused on Priorities: The City of Oklahoma City. (2013). Web.

Your City Budget: FY 2012- 2013 Annual Report. (2013). Web.

Introduction

The City of Oklahoma has a specific mission of providing quality, committed leadership, and ensuring equal distribution of resources. To attain this mission, the Oklahoma City leaders provide proper infrastructure through ensuring proactive and reactive services. They offer excellent stewardship of public assets and create effective partnerships that promote employment opportunities for individuals while creating a comfortable environment for the success of businesses. The Oklahoma City has embarked so much in ensuring their budget is up to standard. The economists of Oklahoma City work tirelessly towards the provision of high-quality products and services to ensure efficiency and the removal of barriers to future development (Dowler, Ferbrache, McSpadden, Stroope, Fike, & Kelly, 2012). This paper will analyze the payroll of the Oklahoma City public workers, analyze the trend of expenditure, forecast the future of the expenditures, and give a brief overview of capital budgeting.

Payroll Forecast

Oklahoma City has an apportioned $6,717,773,223 to its total revenue for the financial year, 2013/2014. It has also apportioned $6,717,766.766 to its total expenditures leaving behind a balance of $6,462. The agency’s compensation for employees amounts to approximately $2.4 billion for the fiscal year 2014. It happens that an agency with a growing economy will obviously have an increasing trend in the general revenue collection and consequently an increase in total and employee expenditure (City of Oklahoma, 2013). In Oklahoma City, there would be a 2 %, 4 %, or 5 % pay increase in the wage bill for the fiscal year 2014 depending on the expansion of the budget, but this would have some consequences on the budget. It will be a burden to the budget to accommodate the rising benefit cost. The consumer price index increases from time to another and thus the employees would propose a salary or benefit increment.

Such benefits, in this case, would comprise of medical insurance, commuter allowance, entertainment allowance, house allowance, and disability insurance among many benefits. This will have a greater benefit to the employer as their general social welfare will improve. They will have an improved lifestyle and therefore the associated benefits of an increase in employee benefit include:

1. Ensuring a controlled health care system
2. Increased tendency of retaining employees
3. Increased employee satisfaction thus improved productivity

While the government would undergo an increased cost of paying the additional benefits, the productivity, and thus the general GDP would have an increasing tread (Dowler, Ferbrache, McSpadden, Stroope, Fike, & Kelly, 2012). A 2% increase in benefits and salary will have a slugged increase in GDP while a 4% increase will have a sharp increase in GDP. However, any further increase will have a flat return in GDP. This means the agency will be spending more on the wage bill, which would affect other sectors of the economy. The following charts represent the changes in output for a 2%, 4% and 5% pay raise for the fiscal year 2014.

The following chart will present the combined benefits in GDP levels of a 2%, 4%, and 5% increased trend of a pay increase in the year 2014 in Oklahoma City.

From the chart, it is noteworthy that an increase in employee pay and benefits from 2% to 4% will cause a rise in the GDP levels. Further increase from 4% will not have any effect on the GDP i.e. the pay rise will have reached a diminishing return level. An increase further than 4% will cause the government to overstretch its budget thus cause inconveniences in other budgetary allocations in the fiscal year 2014.

Trend Analysis

The Oklahoma City budget expenditure is divided between operating and Non-Operating expenditures, which comprise of personal services, supplies, capital, debt services, transfers, and other services (Fallin, 2013). There is also a provision for reservations for future capital costs.

From the pie chart, it is noteworthy that the personal services comprise the largest portion of the Oklahoma City operating expenditures. Of the total operating budget, 69 % takes care of expenses like salaries, retirement benefits, and insurance. On the other hand, the capital outlay takes the lowest percentage, 0.2%of the total operating expenditure.

The trend of the exact amount of monies allocated for the various expenditures over the years 2010, 2011, and 2012 are summarized as below.

From the table and graph, it is evident that the expenditure on personal services has an upward trend. Records show that total revenue for expenditure increases by at least 20% every year. This means that the increasing expenditure on personal services emanate from the creation of new employment opportunities or raising benefits for the already existing employees. The personal service expenditure has increased from 68% in 2010 to 70% in 2012. This increased expense of personal services is ‘stealing’ from the amounts allocated to reserves.

On the other hand, the expenses of Oklahoma City are analyzed from the functional point of view. The four broad areas of service provided by the city are:

1. General Government Functions as taking care of the Manager’s Office, the Municipal Councillors Office, the Office of Mayor and Council, the City Clerk’s Office, Personnel, Finance, and the City Auditor’s Office; comprising about 6% of city’s operating expenditure.
2. Public Safety which comprise of which takes care of Police, Fire emergencies, Animal Welfare and the Municipal Courts; comprising 52% of the city’s operating expenditure budget.
3. Public Services including Airport, Development Services, Public Works, Planning, Public Transportation, Parking, and other Utilities. These comprise 31% of the operating expenditure budget.
4. The Culture and Recreation function as Parks and Recreation facilities, which make up 11% of the operating expenditure budget.

The amounts allocated for these facilities have had fluctuations from time to time as shown in the table below.

Oklahoma City has had an increasing trend of the amount of monies set aside for public safety, public services, and the general government functions. The amounts set aside for recreational services are slowly declining as the years go by.

Expenditure Forecast

As discussed above, the topmost expenditure allocations are in the personal services, public safety, public services, and the miscellaneous expenses. Over the three years, the amounts allocated for these expenditures increase. The forecasted percentages of the amounts set aside for the four highest expenditures are shown in the table below.

Graphically, over the years, the tread of the personal services and public safety can be expressed as in the graph below. There is an increased tendency one can easily forecast the percentage of the amount to be allocated for Oklahoma City’s operating expenditure in the year 2014 as 72% of the amount set aside for operating expenditures. This is justifiable in that in any growing economy, there is an increased trend of employment opportunities in the public sector. This calls for the employment of more people and thus more monies spend on the wage bills. Moreover, the already employed employees tend to have more allowances as a privilege of working for the government, thus this adds on the personal service expenditure. Public safety becomes more and more wanting with time as insecurity cases do arise (City of Oklahoma, 2013). The government is more likely to increase the number of security centers to protect the increasing population. In the year 2015, the amount set aside for public safety would rise to 58% of the amount of the functional services.

The expenditure on public services has an upward trend. From 30% in 2010, it increased to 34% in 2012. Therefore, prediction shows that the amount set aside for public services would rise to 36% in 2014. This is due to the increased demand for public services as the population increases (Fallin, 2013). The monies set aside for miscellaneous use is slowly diminishing as the specific uses are identified and effectively allocated. Miscellaneous expenses would, for example, be used for building a new health facility to cater to the rising need for health facilities. Therefore, the costs of personal services, public security, public services, and miscellaneous expenses are effectively allocated and should be approved.

Capital Budget

In considering the most viable project to invest in, one needs to employ the capital budgeting techniques. These techniques enable one to take the most viable project that would have less initial cost while yielding profitable returns in the future. About that, we compare the two options available in refurbishing the lighting system of an administrative building.

Option 1

Initial cost (purchase and installation) = $500,000

Estimated lifetime = 20 years

Energy cost = $20,000

Maintenance cost = $ 2000

The total annual cost = $20,000+ $2,000= $22,000

Discount rate = 4%

We calculate the equivalent annual cost (EAC)

EAC for project 1 = 500,000/A_{20, 4} +22,000 = $58,790

Where A_{20, 4}= /0.04=13.5903

Option 2

Initial cost (purchase and installation) = $100,000

Estimated lifetime = 20 years

Energy cost = $50,000

Maintenance cost = $10,000

Discount rate = 4%

We calculate the equivalent annual cost (EAC)

EAC for project 2 = 100,000/A_{20, 4} + 60,000 = $67,358.189

Where A_{20, 4} = /0.04=13.5903

From the literal view of things, one would opt for option 2, which is installing a convectional system because the initial cost is quite low. With that regard, one would discard option 1 because initial cost of $500,000 is prohibitive. However, on employing the equivalent annual cost budgeting method, the annual cost of maintenance is considered. Calculations clearly depict that the equivalent annual cost of option 1, which is installing an urgolight system, is much lower than installing a convectional system. An urgolight system will have an annual equivalent cost of $58,790, while a conventional system will have an annual equivalent cost of $67,358. Therefore, the urgolight system is recommended. The initial purchase and installation cost is quite high, but the maintenance cost is relatively low compared to the second option.

Conclusion

Capital budgeting is very essential for the managers, agencies, and decision-makers to make feasible decisions. The cost of undertaking a project is analyzed while considering its benefits. If in any case, the cost outweighs the associated benefits, then the project is not worth investing. The various expenditures that Oklahoma City undergoes are subject to deep investigation and analysis. As discussed, for example, increasing employee benefits over 4% would result in diminishing returns on the GDP level. The expenditure on public security, public services, and any other expenditures should be under stringent investigation to ensure that misappropriate allocation of the scarce resources does not occur.

References

City of Oklahoma (2013). Your City Budget: FY 2012- 2013 Annual Report. Web.

Dowler, D., Ferbrache, J., McSpadden, J., Stroope, M., Fike, D., & Kelly, L. (2012). Proposed Budget Focused on Priorities: The City of Oklahoma City. Web.

Fallin, M. (2013). State of Oklahoma: Executive Budget for Fiscal Year Ending 2013. Web.

Introduction

In public administration, bureaucracy is one of the concepts that continue to elicit debates among the administrators and government officials, with excessive delays in the government processes being the main questions often discussed. Bureaucracies have not only been debatable in the centralized governments where service delivery relies on the procedures planned and executed within the central systems, but they have also existed in decentralized governments (Pecorella and Stonecash 10).

America has one of the heavily decentralized governments, but a few of its organizations seem to grapple with the issues surrounding bureaucracy in decision-making processes. The New York State education department is one of the organizations that have persistently debated about the issues surrounding the existence of bureaucratic arrangements in the issues surrounding policy formulation, budget planning, and resource allocation (Pecorella and Stonecash 7). Following the recent spate of controversies, this essay focuses on examining the New York State budget for educational policies to examine some of the bureaucratic issues surrounding the organization.

Rancorous Debates Since 2010

The initial war on fund allocation in the New York State schools began during the era of President Reagan when the government began tampering with the education budget to implement some budget reductions (Rubin 9). However, there have been controversies regarding the manner in which the New York State allocates money to the education department since 2004, although major bureaucratic issues began towards the beginning of 2010 (Rubin 5).

In New York’s history, major educational financing reforms began at the beginning of 2010, when the educational system for the New York State embarked on a different system of designing and implementing the school budgets (Rubin 11). When Cuomo took over the governorship and the ultimate control of the New York States affairs, including the educational policies and budget allocation, certain turnarounds occurred. According to Rubin (13), Cuomo has been advocating for an increment of the school budgets but has been oblivious about the present teacher’s evaluation system that seems controllable.

Most of the issues that have been persistent in the education department of the New York State have revolved around budget allocation, the assessment of the performance of the teachers, the agendas proposed by the governor, and the individual plight of the students (Pecorella and Stonecash 17). Bureaucratic issues that have affected policy development and administrative reforms in the N.Y. State Budget began since 2010 when Governor Andrew Cuomo and other education departments remained at loggerheads with the teachers concerning budgetary allocation.

Pecorella and Stonecash (14) assert that while Governor Andrew Cuomo has been pushing for reforms that would assist in improving the performance of the students, teachers and the expenditures of the schools, several bureaucracies within the two houses of the parliament and several other organizations for the teachers have been causing lags in the development agendas of the governor. Rubin (21) states that major bureaucracies have been eminent in the issues that surround the budget and dollar amounts.

Debates over Budget & Dollar Amounts

When he took power in 2011, Cuomo found the economy of the New York State in distress due to the spillover of the 2007-2008 economic hardships (DiNapoli 31). The persistent action aimed to improve the education department of New York has been the budget reforms that have resulted in the launch of the $142 billion education budget in April 2015 (Pecorella and Stonecash 23). However, several bureaucracies have affected the effective approval of the budget by the parliament.

One of the major debates that surrounded the budget and dollar amounts is the issue that concerns the excess budget that would definitely benefit the private schools rather than the public schools. Many opponents from different political affiliations with Cuomo argued that the budget is beyond the ability of the N.Y. State given its recent financial crunches (Pecorella and Stonecash 16). For the bill to remain approved, the involvement of the Senate and the State assemblies were indisputable bureaucratic arrangements.

War on budget formation and increment of the education finance began right from 2009, even before Cuomo become the governor of the State of New York. However, the proposals of Cuomo caused serious debates (DiNapoli 24). In 2011, the budget was at $125 billion, and in 2012; the budget was at $129 billion. In the fiscal years of 2013 and 2014, the education budgets were approximately $133 billion and $134 billion, respectively (DiNapoli 29).

According to the sentiments of Cuomo, the budget for education has been soaring, and teachers have been underperforming in schools, while the assessment tests for the teachers indicate otherwise (DiNapoli 15). While the status quo is an issue, which Cuomo is fighting in the rigid education systems, lawmakers and politicians have further promulgated the prevalence of the faulty educational systems in the New York State. The table below indicates the manner in which the school’s expenditure has been, and how bureaucracy has been affecting the budget reforms since the year 2011.

Table: Bureaucracies in the New York State Education Budget from 2011 to date.

A 2015-2016 budget proposal of $142 billion that increases the total spending for the education by 2.8% and a growth of 1.7% in the State taxpayer expenses would seem ridiculous to most of the New York residents (DiNapoli 13). This statement was a strong argument that most of the republican lawmakers raised against the education budget proposals. The opposing team against the reforms also commented that the $1.6 billion increase in the education spending would encourage performance laxity given the fact that the amendments to improve the assessment of the public teachers and the ethics reforms were on the verge of collapse (DiNapoli 38).

On the other side of the argument, most of the lawmakers and the teachers who were supporting budget increment claimed that the effective allocation of funds to the schools would support the proposed school reforms (Cuomo 21). The issues were however complex, as the bureaucratic arrangement of the Senate and the assembly caused controversies.

Differences between the Political Parties

The direct involvement of politicians in the state and national governments is a regular cause of disagreement in America. The proposed amendments on the budget and on the education policies of the New York Schools faced bureaucratic delays due to the political differences that exist between the lawmakers in the Senate house and in the State assembly (Cuomo 7).

While figuring out how politics directly contributed to the bureaucratic delays experienced in the endorsement of the Cuomo educational reforms, it is first important to understand the composition of the two legislative houses. Since time immemorial, the government of the United States has faced serious challenges in handling the political differences between the two major political parties, the democrats’ political party, and the republicans’ political party (Cuomo 27). The two houses, the Senate of the New York State, and the assembly have different numbers of political representatives (Cuomo 42). The significances of the Cuomo reforms were definitely void when it came to political differences.

For any amendment or reform to become legal, the involvement of the two legislative houses is paramount and normally indisputable. Governor Cuomo is a staunch democrat and his proposals towards increasing the education budget and imposing the ethics and assessment reforms were almost useless before most of the republicans’ who attended the parliament sessions (DiNapoli 31). Although the reforms must bureaucratically get the approvals of the two houses of legislators, the lawmakers of the democrats’ side were proposing while majority of the republican were opposing the budget and ethics reforms that Cuomo had presented (Cuomo 15).

The republican members said that it was rather absurd and irrational for the lawmakers to pass the amendments knowing very well that New York State could not keep up with the growing educational expenditures (Cuomo 23). The republican lawmakers further argued that the budget was a private deal between the governor and the private investors to frustrate the funding systems of the public schools.

Conclusion

Bureaucracies in government organizations are increasingly becoming a nuisance to the development agendas and reform strategies intended by some reformist officials. The bureaucratic arrangements in the amendment of the New York State budget are gradually affecting the process of providing schools with the most desired reforms. Even as the approval of the reforms proposed by governor rightfully, require the involvement of the Senate and the State assembly, political differences between the lawmakers of democrats’ and the republicans’ are harmful.

The New York State budget for educational policies requires interplay of several policymakers to approve the amendments. Nonetheless, despite bureaucracy causing some controversial debates among the lawmakers and the involved members, bureaucratic arrangements are important in ensuring that policymaking is procedurally right. Such bureaucracies are generally important in ensuring that policies associated with the development agendas set for the States are in tandem with the legal, social, and public demands.

Works Cited

Cuomo, Andrew 2015. 2015-16 Executive Budget. Web.

DiNapoli, Thomas 2012. Report on the State Fiscal Year 2011-12 Enacted Budget. Web.

DiNapoli, Thomas 2015. Preliminary Report on the State Fiscal Year 2014-15 Enacted Budget. Web.

Pecorella, Robert, and Jeffrey Stonecash. Governing New York State, Sixth Edition, New York, United States: SUNY Press, 2012. Print.

Rubin, Irene. Public Budgeting: Policy, Process, and Politics, London, United Kingdom: Rutledge Publishers, 2015. Print.

Introduction

According to (Jensen, 1996), most Departments of correction are incurring challenges in terms of cost and this directly impacts individuals. In order to save cost for the budget, the departments are reducing expenditure on the basic expenses such as lighting and the volume of water being used by inmates as well as installing panels to enhance energy saving. The prisons are also being encouraged to be generating their source of livelihood by engaging in income generating activities such as agriculture, where the inmates can provide labor. Any program that seems not to deliver as targeted is also being considered for elimination as well as reducing excess and unnecessary expenditure such as time allocated for recreation. The workload in the cells is also being considered for reduction by ensuring more inmates in the cells are engaged in community service. The aim of this paper is to address each of these areas where effective reduction in the D.O.C budget is possible.

Essay Body

Research has shown that, if there can be timers in the cells to regulate the consumption of electricity in the cells, it is possible to have them turn off the lights at a certain time of the night such as 11 pm. Prison wanders should be sensitized through energy-saving teams organized by the federal government to conduct training as well as provide an assessment to the personnel on the ground. This should be targeted towards establishing a change implementation plan. Prisons should start using compact-fluorescent tubes that should be turned off if not being used. In case there are recreational facilities such as TVs and computers or any other electronic; it should be turned off whenever it is not in use. Light sensors should also be installed in common rooms and hallways as well as gyms to ensure lights are only on when these facilities are in use. The gadget operates on the motion of the objects and is able to detect when inmates are moving in and out thus putting on and off the light as necessary. (Cole, 2005).

(Freudenberg, 2001) suggested that, the budget on the consumption of water may also be cut down if the number of flashes in the toilets can be regulated to a maximum of two per minute in each toilet allocated to inmates. These should be accompanied by programs to educate the inmates so that there is harmony in implementation as this would make them cooperate. Inmates should only wash their clothes and dishes only when they have a full load that should be specified. Water may also be saved by installing conservacaps to function with the already existing meters for flushing in all the urinals as well as toilets. Although this process is expensive, studies have shown that it is effective in reducing substantial water usage at a low cost. This should start by renovating one of the already existing toilets to study the cost and later expanded when the functionality of the system is proved. The method is efficient because the entire fixture does not have to be replaced when installing this gadget. Research has shown that the system has a capacity to save at least 3million gallons of water every year in a standard correctional center.

Water flow can also be controlled by the use of a one-minute shower push button that resists water vandalism by the inmates. The flow is timed so as to open the flow for about 45 seconds to one minute after when it closes. The facility applies with showers and other minor washing facilities such as those meant for washing hands. The system is designed to regulate heating costs with minimal supervision by even those inmates who have reduced mobility. The push-button showers are designed with infrared mixers that do not require a touch on the operation and are therefore hygienic for the inmates to use even when they are congested. When the infra-red field is broken, the sensor becomes activated and a timed flow of water starts. Research has shown that more than 80% of the normal consumption of water can be saved by the system on yearly basis. In the case of an inmate with limited mobility, the showers are specially designed for them to ensure they do not consume a lot of water corresponding to the time taken by the particular inmate to shower. (Flanagan, 1998).

(Greifinger, 2007) argued that, as one of the measures to reduce energy consumption in the prisons, solar panels can be installed in addition to turbines that are driven by wind. These systems should be put up at facilities owned by states wherever there is enough space. This would provide maximum benefit, especially during summer seasons thus reducing the cost of electricity in the correction centers. This should be done without minding up-front cost and then part of the money saved should be used in servicing the system periodically. Research has indicated that the facility has a capacity to provide at least 30% of the total demand of energy in correction centers which accounts for about 10% of annual demand when peak performance is averaged.

In terms of food consumption, a significant budget can be cut down by involving inmates in agricultural programs through the state’s unutilized agricultural lands. Studies have shown that the program can subsidize the volume of food consumed by inmates by up to 60%. The part of the saved budget should be used to buy other necessary farm inputs to sustain the farming as well as provide transport for the inmates to the agricultural lands in case they are located far from the correction centers. (Johnston, 1976).

According to (Shleifer A. (1997), the correction centers should ensure as much as possible they have not employed workers to perform duties regarding the attendance of the inmates. There should be a properly regulated program that makes maximum use of inmates following duty rosters. Whenever there are inmates being assigned community work, there should be a certain number of them who should be left behind to perform duties such as cooking and washing of utensils as well as washing of the facilities.

Research has shown that some of the inmate’s programs do not deliver the expected outcomes and they end up consuming a significant part of the budget allocated for the inmates at the expense of other basic needs. Such programs should be reduced and where possible eliminated. They include supervision of offenders who are on low as well as moderate risks and any supervision on offenders not accused of a felony. Supervision of inmates on various crimes such as sex offenses also ought to be reduced from about 48 months to 30 months. Those who are not under serious offense should be put under supervision for just 12 months. (Simon, 1992).

Conclusion

Studies have shown that, when inmates are provided with excess recreation time, they are likely to engage in a fight and other forms of assaults that are risky even to other workers. This means an extra budget is incurred as the workers have to be compensated for the damage caused to them. The solution to this problem would be to significantly cut down on the recreation time to as low as one hour. (Bopp, 1976).

It is possible to reduce the challenges being encountered in the most department of correction by cutting down on the consumption of basic necessities such as water as well as save much energy through controlled use of the already existing resources. If this is done, centers for inmates would not require an extra budget and the inmates would also receive better and adequate services which are part of their rights as they get reformed in those facilities. (Dye, 1981).

References

Jensen J. (1996): States and Common Pool Resources: Blackwell Synergy pp45-49.

Cole T. (2005): American Corrections: Thomson Wadsworth pp28-34.

Freudenberg N. (2001): A review of the impact of the correctional programs: Springer pp57-62.

Flanagan J. (1998): Energy & Environmental Visions for the New Millennium: Fairmont Press pp39-44.

Greifinger R. (2007): Public Health Behind Bars: From Prisons to Communities: Springer pp19-24.

Johnston H. (1976): Energy Economy in Government Buildings: Energy Conservation and Energy: Elsevier Science & Technology pp98-103.

Shleifer A. (1997): The Proper Scope of Government: Theory and an Application to Prisons: MIT Press pp37-40.

Simon J. (1992): emerging strategy of corrections and its implications: Blackwell Synergy pp27-31.

Bopp A. (1976): A Naive Economic Model of the Maintenance-Corrections Allocation in a Prison: Lexington Books pp69-75.

Dye T. (1981): Understanding Public Policy: Prentice Hall pp74-79.

A review of the issue/topic selected

In history, budget reduction has become one of the most frequent and unlikable means of dealing with nonprofit organizations (Cogan & Timothy 112). Despite the fact that the practice has always comprised of the usual cycles of deficit and surplus, operating under reduced budget has become very common habit in the current financial crisis.

Considered that most institutions have little unfounded spending to be corrected, managers should identify new and innovative ways of reducing spending in their organizations.

Through this process, care should be taken to ensure that the provision of service and organizations’ goals are not compromised at the expense of reducing spending. This article focuses on local government budget reduction processes, its background information, its common practices, its desired practices, its shortcomings, and its recommendations.

Nearly, every local government in the US is dealing with the want to decrease their budgets and carefully examine their expenditures (Bartle 12). Usually, budget reduction processes have been carried out for decades in several local governments. As such, the processes have been a routine for most governments.

Notably, budget reduction varies from local government to the other, from an institution to the other, and from a state to the other. The processes include the combinational of short term and long term advances.

In most local governments, the stress is on decreasing their expenditures and not filling vacant positions. On the other hand, other local governments have emphasized on the focusing on their core functions and outsourcing other functions.

Selected background information

As early as 2000, enhancing the use of performance information in government budgeting processes was getting a worldwide attention (Cogan & Timothy 132). However, high levels of attention and activity did not necessarily translate into progress in achieving the needed goals for performance-informed budgeting.

In the year 2008, the fiscal crisis in the US left the federal government and the local government with many challenges. To overcome these challenges, practical policies such as budget reduction processes, were adopted. After the year 2008, most local governments in the US were on the cutting edge of implementing reforms to promote performance measurement in budgeting and share good practices.

Why the issue was selected

For every local government, budget is a crucial economic policy tool. Budget interprets government’s strategies, political pledges, and objectives into choices on how much revenue to collect. Equally, the budget indicates the plans of collecting these revenues and their applications in meeting the local government responsibilities.

After the year 2008, budget reduction processes have become important fiscal management factors for every local government in the US.

Compared to other fiscal management factors such as capital planning, expenditure controls, revenue analysis, forecasting and investing public funds, the budget reduction process is vital to the creation of sustainable financing strategies and economic developments during economic crisis such as recessions. In this regard, the topic on budget reduction process was focused on in this article rather than on other fiscal management topics.

Equally, the topic on budget reduction process has been selected because currently there is an increasing need for an efficient budget to control local government’s spending in the face of dormant revenue growth.

It is a fact that during slower revenue collection periods, measures that enhance budget reduction should be put in place to attain a financial equilibrium. Given the fact that most local governments in the US are experiencing slower revenue collections, the topic was highlighted in this article to stress on its relevance.

It is vital for every local government to adopt budget reduction processes not only to reduce on their spending, but also to ensure that quality services are provided to its residence without cutting back on the number staff. Therefore, this process compared with the other fiscal management factors will come in handy during such crucial times.

Common practices

Although budget reduction processes are unique to every local government in the United States, there are some common practices applicable to all the organizations. These practices are reengineering current operations, outsourcing, and use of technology.

By reengineering their current operations, local governments are supposed to come up with innovative ways of maximizing on their labor force for increased production.

Through this approach, managers may be required to serve more than one organization, professional growth can be shared with other local governments, and service delivery may be distributed in conjunction with other local governments. By doing so, transportation cost, administrative cost, and other relevant cost will be reduced.

Through outsourcing, local governments are required to specialize on their core functions and let external companies provide non-core functions (Cogan & Timothy 135). Local governments can focus on providing education services, health care services, transport and communication services, and security services, and let external companies provide services such as payroll services and maintenance services.

Although this method is the most efficient means of the budget reduction process, dismissal of the current employees undermines its reliability (Pierre 167). When putting this practice into effect, local governments should negotiate with these external companies to hire the current local government employees displaced by the enforcement of the practice.

Another common approach of the budget reduction process is the adoption of technology as a tool of offering services. With appropriate technology, local governments can ease how their residences access some of their services. For instance, residences registering for the delivery of these services should be done online.

Similarly, customers should be able to transact their payments online. Through these, queues and personnel required to serve the customers will be bypassed.

Desired practices

The above practices have enabled the local governments to reduce their budget spending. However, more desired practices should be adopted to enhance budget reduction processes. These desired practices are optimizing revenue generation, improving program efficiencies within and across agencies, facilities’ optimization, and managed application services.

With the appropriate use of modern information technologies, revenue collection agencies should be able to come up with an efficient collection management process to increase the amount of revenue collected (Keith & Allen 134).

New technologies will provide the agencies with advanced means of collecting revenues and detecting tax defaulters. Through this, they would be able to optimize their resources towards revenue collection for increased returns, enhance their relations with taxpayers, and get better forecasting abilities.

Another ideal practice is improving program efficiencies within and across agencies. Through the rapid process improvement, local governments can be able to gather cross-functional teams in their organizations with the aim of attaining focused and hasten enhancement processes.

By doing so, they will be able to recognize challenges to implementing an operational efficiencies, adopt effective ways to decrease process-related inefficiencies, and center their organizations on their chief functions.

A different ideal practice is facilities’ optimization. Through this practice, local governments can reduce on their budget at the same time offer key prioritize.

The practice can be achieved through process improvements such as automating most services, professional real estate assortment supervision, and adopting energy management programs. In the long term, this practice will lead to a decrease in operating costs, maintenance costs, energy costs, and carbon dioxide emission.

Through managed application services, local governments will enhance their IT operations while reducing on their cost. Currently, most local governments’ IT departments are faced with multiple challenges. These challenges are aging IT facilities, reduced IT budgets, and augmented demands for them to meet their mandates.

Therefore, through managed application services they can be able to center on their primary missions, reduce operation cost, increase the value of their IT facilities and their performance, and increase their innovative abilities.

Shortcomings

It should be noted that the above practices of budget reduction process have their own shortcomings if they are not implemented appropriately. For instance, when optimizing revenue generation, failure to assess all the cases recognized through analytics will cost the local government huge returns from lost returns collection chances.

Similarly, through some of the above approaches such as outsourcing, some of the local government employees may be retrenched because of their roles being outsourced. This would increase cases of the unemployment, which the local governments should be fighting.

Usually, outsourcing has been challenged with heated debates from the affected individuals. Although the employers view the approach as beneficial, the employees believe that the approach will cause them agony.

Another approach of the budget reduction process is that during its implementation process there is risk of local governments and related agencies cutting back on some essential services to reduce on the cost of operations (Kemp 147). If the service affected is very essential to the customers, tension will arise between the customers and the service provides.

Recommendations

During these serious financial times, local governments should not only center on uplifting their financial situations, but also on amendments that will add to their long-term viability. In this regard, the below recommendations should be implemented.

It is crucial that local governments adopt new mindsets. Based on the above practices, the need for a new mindset in these organizations is apparent. Local governments cannot only focus on providing quality services; they must also ensure that the services are provided at a lower cost.

Similarly, local governments should increase their scales to increase on their savings (Ffolliott & Luis 45). This implies that these organizations must adopt new strategies to improve on service delivery and cut on the cost of production. Therefore, local governments and other relevant agencies must consider working together to ensure that projects are administered, deliberated, and trailed at the local levels.

Through this approach, local governments and the relevant organizations can ensure that value addition and cost reduction are consolidated at the same time getting rid of the possibilities of establishing new inefficiencies. Local governments should act with immediate attention.

It is pleasing to note that more local governments are discovering ways of reducing their budget with each passing year. However, those local governments who will continue to reduce on their service production in the future will soon find themselves in situations where they will be left with no service to cut back.

Conclusions

In conclusion, it should be noted that budget reduction processes in our local governments are unavoidable if they must remain viable in the near future. Nearly, every local government in the US is dealing with the want to decrease their budget and carefully examine their expenditures. As such, budget reduction varies from local government to the other, from an institution to the other, and from a state to the other.

In this article, common practices and desired practices of budget reduction processes have been highlighted. Common practices are reengineering current operations, outsourcing, and use of technology. By reengineering their current operations, local governments are supposed to come up with innovative ways of maximizing on their labor force for increased production.

Through outsourcing, local governments will be required to specialize on their core functions and let external companies provide non-core functions. With appropriate technology, local governments can ease how their residences access some of their services.

On the other hand, the desired practices are optimizing revenue generation, improving program efficiencies within and across agencies, facilities’ optimization, and managed application services.

Through these serious financial times, local governments should not only center on uplifting their financial situations, but also on amendments that will add to their long-term viability. Therefore, they must adopt new mindsets and increase their scales to increase in their savings.

Through this approach, local governments and the relevant organizations can ensure that value addition and cost reduction are consolidated at the same time getting rid of the possibilities of establishing new inefficiencies.

Works Cited

Bartle, John R.. Management policies in local government finance. 6th ed. Washington, D.C.: ICMA Press, 2013. Print.

Cogan, John F., and Timothy J. Muris. The budget puzzle: understanding federal spending. Stanford, Calif.: Stanford University Press, 2001. Print.

Ffolliott, Peter F., and Luis A. Tapia. Natural resources management practices: a primer. Ames: Iowa State University Press, 2001. Print.

Keith, Robert, and Allen Schick. The federal budget process. New York: Nova Science Publishers, 2003. Print.

Kemp, Roger L.. The municipal budget crunch a handbook for professionals. Jefferson, N.C.: McFarland & Co., 2012. Print.

Pierre, Jon. The SAGE handbook of public administration. London: SAGE, 2012. Print.

Introduction

Hamden is a county situated in the state of Connecticut (Hamden Economic and Community Development 1). Just like any other county in the United States of America, it has in place several programs that are targeted at providing social and other services to the inhabitants.

The local authority in Hamden is in charge of the provision of a number of services. They include health services, security and other emergency services like fire response.

The author of this paper takes a critical look at the budgetary procedures in the county. In this paper, the author restricts their discussion to the Fire Department in the City of Hamden.

The Fire Department in the city of Hamden has a long history that dates way back to the 1800s (Hamden Fire Department History 1). The organization was founded by the community members in a bid to protect their homes and businesses among other properties.

The community members were interested in protecting their property in the event of a fire. So rudimentary was the formation of the fire department that the community relied on simple materials like buckets.

According to information obtained from Hamden Fire Department’s website, the structure of the entity is fairly complex. As far as organizational structure, the entity is headed by a Fire Chief (Hamden Fire Department Organization Chart 1).

The Fire Chief has one deputy in charge of four other departments. In addition, it is easy to establish, from the organizational structure chart provided, that the department has a total of five fire stations. From the chart, it is clear that organization is a multi-faceted entity.

Given this multi-faceted nature of the organization, it is clear that a detailed budget should be put in place to ensure its proper functioning. In this paper, the author looks at one such budget and makes a detailed analysis focusing on several aspects of that document.

More importantly, the budgetary review carried out in this paper looks at the shortcomings of the document and makes recommendations for future improvements.

The Budgetary Process: A Brief Overview

Every society, be it a city, state, or a federal government, has a list of items it intends to fulfill as far as provision of services is concerned.

Aronson and Schwartz (23) are of the opinion that every level of governance requires a budget to enable it estimate the spending to be incurred during a given period of time. In other words, budget is more or less a form of financial approximation for a given period of time.

According to the two authors, the budgetary process is the mandate of the office of the leader of a local authority. In this case, the entire process of formulating the budget approximations falls squarely in the office of the Mayor of the city of Hamden.

Consequently, the mayor is expected to factor in all the departments that fall under his jurisdiction in their respective local authority.

In the opinion of Kemp (49), cities should take into account the revenue they collect and the funding they expect from the national government as they prepare their budgets.

In addition, the leadership in such cities should factor in the demand of the various services they offer so as to achieve equitable allocation of resources.

In the case of the city of Hamden, the mayor is expected to take into consideration 35 different categories of departmental structures in their expenditure approximations every year.

The Heads of the various departments in a local authority are expected to hand in estimates of their revenue and expenditure to the person designated to head the finance docket (Kemp 58). Members of the public are also invited to participate in the budget making process (Kemp 58).

Their input is considered after the professional heads of departments have made their recommendations to the mayor. Thereafter, the head of finance is expected to compile the said estimates and hand them over to the mayor.

After receiving the estimates, the mayor is expected to submit them to the legislative arm of the local authority for approval. The budget is expected to run for one fiscal year (Aronson and Schwartz 55). In the case of the city of Hamden, the fiscal year runs from July to June of consecutive years.

Operating with Capital Budgets

Aronson and Schwartz (6) argue that a budget per se is a detailed account of the financial plan of an organization. In this case, the organization in reference is the city of Hamden. More specifically, the review focuses on the city’s Fire Department.

The financial plan for such an organization is expected to be subdivided into two categories. The two are the operating and the capital plans (Fulton 1).

The first category of budget is one that takes into account the daily functioning of a particular organization over a period of one year. According to Fulton (1), the person heading such an organization is tasked with the responsibility of reviewing the said plan.

The person in charge of the budgetary allocation is to ensure that those authorized to incur expenditure do not divert from the norm.

On their part, capital budgets address the issue of investment. They account for any investment that a given organization intends to make internally (Fulton 1). In the case of the budget discussed in this paper, the Hamden Fire Department may have several investments it seeks to actualize.

As such, the department is required to have an internal way of realizing its goals and objectives. As such, the department will allocate itself a given period of time over which the said investment is to be realized.

The amount of money spent over that period for the said investment is referred to as the capital budget.

Kemp (17) opines that different local authorities have specific periods over which their investments are to be achieved. Further, the author argues that capital budgets run between 5 to 10 years.

Operating with Capital Expenses

According to Kennon (1), every organization has a set of expenses which it must incur to meet its diverse objectives. As a result, analysts argue that the funds spent by an organization to enable it fulfill its nominal operations constitute the entity’s operating expenses.

In this regard, one would argue that the operating expenses for Hamden Fired Department include wage bill for the staff and the funds set aside for the maintenance of the various machines that the organization operates.

Many organizations are expected to perform efficiently by ensuring that they keep their operating expenses at an all time low. The organizations can achieve this by cutting back on unnecessary expenses.

Capital expenses are those that an organization is expected to incur over a given period of time (Gruttadaro 1). Organizations like the Hamden Fire Department incur capital expenses due to the acquisitions of such assets as machinery and buildings.

The acquisition of such assets is crucial to the operations of the organization. It is noted that there is a difference between capital and current expenditure. However, Gruttadaro (1) is of the view that, at times, ambiguity prevails as far as the differences are concerned.

For instance, when the said fire department conducts repairs over an extended period of time, the undertakings are referred to as operating expenses. In the event that such repairs are carried out all at once, the same is referred to as operating expenses.

Sources of Revenue and Budgetary Allocations

Aronson and Schwartz (23) are of the opinion that local authorities require a source of revenue so as to fund their operations. Such jurisdictions as cities and states are mandated by law to collect different forms of taxes.

The said taxes constitute the revenue upon which the particular jurisdiction relies to fund its operations. The state of Connecticut, for example, is mandated by law to collect revenue in form of taxes. In addition, the state receives a specified portion of revenue from the federal government.

The latter is meant to supplement the revenues that a state collects through taxes and other such sources.

A look at Connecticut’s State Revenue reveals some of the said sources of revenue. Personal income tax, sales and use tax, as well as corporation tax are some of the most significant sources of revenue as far as taxes are concerned.

Motor vehicle licenses and business registration licenses form the second tier of revenue sources. Transfers from the federal government form the third tier of source of revenue for the state. Such cities as Hamden have similar sources of revenue.

Shortcomings of the Budget Making Process

In this paper, the author has established that a budget is a systematic mechanism through which an organization allocates its various resources for effective delivery of services. The resources in reference here range from the financial to the human investments in the city (Kemp 31).

The said resources are organized in such a way that during a given fiscal year, the operations of an organization like Hamden Fire Department run smoothly.

The budget prepared by Hamden Fire Department has various shortcomings. One of the shortcomings is the fact that the organization puts more emphasis on recurrent expenditure as opposed to allocating funds to such investments as radio communication.

The shortcoming stems from the fact that the drafters of the budget may have lacked the ‘foresight’ of the department in mind. Capital expenditures are usually the best way through which an organization can become sustainable.

In the case of Hamden Fire Department, there is not a single capital budget set aside for the purchase of modern firefighting equipment.

It is noted that changing trends in tackling fires require such organizations as Hamden Fire Department to upgrade and provide firefighters with new and modernized machinery.

The process of developing any given budget, as already indicated, ought to be all inclusive (Kemp 100). To achieve this, members of the public should be given a longer period of time to make their contributions towards the budget making process.

The input of the community members should be taken seriously by those drafting the budget. Local authority budgets are made for the benefit of the people who reside within the said localities. For that reason, the people ought to be given more time to contribute towards the making of the budget.

The drafters need to spur public participation through various strategies, including engaging in civic education. In addition, the department needs to set money aside to educate members of the public on matters to do with fire prevention.

Recommendations

Several recommendations are made in this report to improve the budget making process. The benefits of these recommendations are not restricted to the Hamden Fire Department.

On the contrary, they apply to other similar organizations operating within Hamden City and beyond. The following recommendations are made:

1. Members of the public should be involved actively in the budget making process. The Hamden Fire Department should hold quarterly open days to identify the demand for emergency services in the city.
2. A budget requires the input of professionals. In the case of Hamden Fire Department, there is minimal input from fire and emergency experts, hence the minimal allocations towards education. The Fire Chief and the Mayor should consult with professionals in disaster management to get advise on the procurement of the necessary equipment. Such a process will reduce recurrent expenditure.
3. The Hamden Fire Department should open its operations for interrogation by the public and auditors to avoid mismanagement of funds.
4. To avoid wastage of funds, the Fire Chief should work with the Mayor to legislate on spending ceilings. The same will prevent the urge to increase expenditure unnecessarily.

Conclusion

Budgets are more beneficial to the organization if they respect public-private partnerships and if they are properly audited.

For instance, if the mayor of Hamden City wants the budget to meet the objectives of the various departments in the city, there is a need to thoroughly vet the financial approximations before new ones are passed.

Audits will highlight several items like recurrent expenditure and how funds can be redistributed to other areas that deserve higher allocations.

In addition, local authorities need to have their budgets audited to avoid instances where money is misappropriated. Ultimately, a budget should ensure that the objectives of the organization are met.

Works Cited

Aronson, Richard, and E. Schwartz. Management Policies in Local Government Finance. Washington DC: International City/County Management Association, 2013. Print.

Fulton, Jeff 2013, Operating vs. Capital Budgets. Web.

Gruttadaro, Daniel 2013, What is Capital Expense? Web.

Hamden Fire Department 2013, History. Web.

Hamden Fire Department 2013, Organization Chart. Web.

Hamden Economic and Community Development 2013, Hamden at a Glance. Web.

Kemp, Roger. The Municipal Budget Crunch: A Handbook of Professionals, North Carolina: McFarland, 2012. Print.

Kennon, Joshua 2013. Operating Expense on the Income Statement. Web.

Outline

The federal budget deficit is on the highest mark ever. This calls for tough choices that will involve cutting down the budget expenditures as well as the adoption of tough austere measures to curb the wastage.

The recommended work efforts of the Congressional Budget Office (CBO)on a budget regarding the process of budget making are listed below. The CBO gives advice on array of the policy options in the annual budget is to provide solutions on how to save through thrift use of resources.

It is said that most of the time, the recommendations they give are ignored. A number of organizations have come up in a bid to put pressure on the government to adopt austere measures in order to check the budget gap before it gets out of control. Indeed it is the responsibility of every citizen to check on how the Federal government spends their hard-earned taxes.

Based on the aforementioned, it is clear that some items should be cut from the federal government Budget. The options will cover single items picked from four broad areas in the federal budget, where there is evidence of waste.

Options

1. The federal government spent over $3 billion to re-sand the beaches. The project dubbed “re-nourishment” is meant to replenish the beach with sand in order to attract more tourists.
   However, according to the experts from National Oceanic and Atmospheric Administration, the exercise is futile because the seawater will wash it back to the sea as easily as the original beach sands (Gray 2012, p 271).
2. Systematic plundering of over $20.8 billion in Iraq aid. (Reidl 2009)
   After the invasion, the government embarked on massive projects to rebuild the infrastructure of Iraqi, But it’s now being revealed that billions of dollars earmarked for reconstruction projects in Iraq were either wasted or stolen through well-devised fraud schemes.
3. More than 50,000O federal homes are vacant. (Reidl 2009)
   Due to the economic slowdown that has led to the slump in the housing market, which in turn led to 50,000 houses being unoccupied. This has lead to loss of billions of tax payer’s money.
4. Over $146 million is spent annually in-flight upgrades because federal government employees choose to exploit weaknesses in the control system to avoid flying in coach. If the officials fly not the first class but more scrutinized business class, it will result in five times less (Reidl 2009)

Reference List

Reidl, Brian. The Heritage Foundation. 2009. Web.

Gray, Jim. Focus: Arrogance and Greed America’s Cancer. New York: AuthorHouse, 2012.