Budget Tools: Financial Methods in the Public Sector PDF
Preview Budget Tools: Financial Methods in the Public Sector
2 CQ Press, an imprint of SAGE, is the leading publisher of books, periodicals, and electronic products on American government and international affairs. CQ Press consistently ranks among the top commercial publishers in terms of quality, as evidenced by the numerous awards its products have won over the years. CQ Press owes its existence to Nelson Poynter, former publisher of the St. Petersburg Times, and his wife, Henrietta, with whom he founded Congressional Quarterly in 1945. Poynter established CQ with the mission of promoting democracy through education and in 1975 founded the Modern Media Institute, renamed The Poynter Institute for Media Studies after his death. The Poynter Institute (www.poynter.org) is a nonprofit organization dedicated to training journalists and media leaders. In 2008, CQ Press was acquired by SAGE, a leading international publisher of journals, books, and electronic media for academic, educational, and professional markets. Since 1965, SAGE has helped inform and educate a global community of scholars, practitioners, researchers, and students spanning a wide range of subject areas, including business, humanities, social sciences, science, technology, and medicine. A privately owned corporation, SAGE has offices in Los Angeles, London, New Delhi, and Singapore, in addition to the Washington, D.C., office of CQ Press. 3 4 Copyright © 2015 CQ Press, an Imprint of SAGE Publications, Inc. CQ Press is a registered trademark of Congressional Quarterly, Inc. All rights reserved. No part of this book may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the publisher. Printed in the United States of America Library of Congress Cataloging-in-Publication Data Chen, Greg G. Budget tools: financial methods in the public sector/Greg G. Chen, CUNY-Baruch College, Lynne A. Weikart, James Madison University, Daniel W. Williams, CUNY-Baruch College. —Second edition. pages cm Includes indexes. ISBN 978-1-4833-0770-1 (pbk.) 1. Budget process. 2. Expenditures, Public. 3. Budget. I. Weikart, Lynne A., 1943- II. Williams, Daniel W. III. Title. HJ2009.C47 2015 352.4′8—dc23 2014024319 This book is printed on acid-free paper. 14 15 16 17 18 10 9 8 7 6 5 4 3 2 1 5 FOR INFORMATION: CQ Press 2455 Teller Road Thousand Oaks, California 91320 E-mail: [email protected] SAGE Publications Ltd. 1 Oliver’s Yard 55 City Road London EC1Y 1SP United Kingdom SAGE Publications India Pvt. Ltd. B 1/I 1 Mohan Cooperative Industrial Area Mathura Road, New Delhi 110 044 India SAGE Publications Asia-Pacific Pte. Ltd. 3 Church Street #10-04 Samsung Hub Singapore 049483 Acquisitions Editor: Suzanne Flinchbaugh Editorial Assistant: Davia Grant Production Editor: Kelly DeRosa Copy Editors: Paula L. Fleming and Doug McNair Typesetter: C&M Digitals (P) Ltd. Proofreader: Jennifer Grubba Indexer: Jeanne Busemeyer Cover Designer: Janet Kiesel Marketing Manager: Amy Whitaker 6 Table of Contents Preface How to Use This Book Acknowledgments PART 1: INTRODUCTION Module 1: The Craft of Budgeting References PART 2: BUDGET TOOLS Module 2: Organizing Budget Data Understanding the Chart of Accounts Understanding Accounting Codes Fund Sources Programs Object Codes Summary Assignments Additional Readings Appendix A: Uniform Chart of Accounts for Local Governments of Utah October 29, 2013 Module 3: Fixed and Variable Costs Definitions of Fixed, Variable, and Step Costs In-Class Exercise: The MLK Settlement House Summary Discussion Questions Assignments Additional Readings Module 4: Breakeven Analysis 7 Definition of Breakeven Analysis A Simple Equation Midtown Soup Kitchen and Breakeven Analysis Summary Discussion Questions Assignments Additional Readings Module 5: Cost Allocation Selected Cost-Accounting Concepts Cost Accounting and Cost Objectives Program and Service Centers Direct Versus Indirect Costs Pool and Base Cost Allocation Methods Direct Allocation Method Step-Down Method Summary Assignments Additional Readings Module 6: Time Value of Money Some Basic Concepts of the Time Value of Money Formulas to Compute Time Value of Money and Simple Examples Formulas to Compute Present Value of Money and Simple Examples Net Present Value: Decision Criteria Summary Discussion Questions Assignments Additional Reading Module 7: Inflation Nominal Versus Constant or Real Dollars Base Year Calculation of Constant Dollars Deflators and Indexes Summary Assignments Additional Readings 8 Module 8: Sensitivity Analysis Scenario Analysis Example of Scenario Analysis Understanding Sensitivity Analysis Statistical Methods Summary Assignments Additional Readings Module 9: Integrating Budgeting With Performance Budget Proposal Budget Implementation Framework for Performance Budgeting Linking Performance Measures With the Budget Targets Benchmarks Standards Comparison With Prior Successes Actuals Variances Reporting Performance Data Integrating Performance Indicators With Expenditures Outcomes Outcome Measures Outcomes and Causality Outputs Outputs and Outcomes Early-Stage Outcomes Process Measures Measures of Satisfaction Process Efficiency Process Effectiveness Financial Efficiency Equity Difficulties in Performance Budgeting Summary Assignments References Additional Readings 9 PART 3: THE BUDGET PROCESS Module 10: The Budget Process: An Overview The Budget Call The Base Budget The Budget Manual Descriptive Text Performance Information Personnel Information Financial Information Decision Packages Additional Topics Time Frame Agency Role in the Budget Process The Executive Budget Submission The Legislative Budget Process Executive Approval Implementation and Follow-On Summary Assignment Additional Readings Appendix A: Budget Guidance Appendix B: Priorities Appendix C: Example of Virginia’s Decision Package Module 11: The Budget Document Organization of the Budget Document Transmittal Letter Budget Message or Executive Summary Revenue Estimates Detailed Schedules Capital Budgets Budget Information Budget Levels Budget Formats Line-Item Budgets Performance Budgets Program Budgets Other Information in the Budget Proposed Appropriation 10
The list of books you might like
