Top-Down Budgeting Methodology
Top-down budgeting is the preferred method of budgeting for government agencies and many organizations (Ljungham). The methodology of top-down budgeting is described as “dominated by top members of the executive branch and the legislative branch” (Williams & Calabrese, 2011, 178). The methodology entrusts top members to make annual budgeting decisions for their organizations. In many instances, top members also use this time to set annual program or department goals and targets. Top members make these decisions without solicitation of input from bottom levels of an organization. This can result in operational and logistical constraints in the lower levels of an organization when plans are implemented (Williams & Calabrese, 2011). Additionally, it can serve as a source of frustration for staff when uninformed budgeting decisions create consequences. This is particularly true when staff is tasked with making things work in the aftermath of budgeting decisions, despite having clear or attainable goals and budgets. Like all budgeting methodologies, there are benefits and difficulties.
The History of Top-Down Budgeting in the Context of the United States
The United States government has settled on top-down methodology after many decades of budget improvement and evolution. Around the early 1920’s, the United States budget was handled by the House of Representatives Appropriations and Ways and Means Committee. There was not a clear and defined process. The President would propose a new initiative and the Committee would adjust the budget accordingly. Due to increased spending and a growing national deficit, the government created the Bureau of the Budget (known today as OMB) and the General Accounting Off...
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...ver, the document defends this decision, “the top-down approach is suggested to help focus the agency’s resources on the items most material and most at risk to the agency’s financial reporting” (OMB, 2013). The document concludes by providing instructions and suggestions on how to use top-down methodology to complete the budgeting process. The government has used top-down budgeting for many years. This methodology ensures projects and departments are funded and approved by stakeholders. As stated, in today’s world, top-down budgeting is not the most successful way to budget. This places the government in an interesting position. The government must have full control of financial decisions in times of crisis but must also be able to act quickly. This should be balanced with government’s ability to incorporate requests from their respective agencies and departments.
Mikesell, J. L. (2010). Fiscal administration: Analysis and applications for the public sector (8th ed.: 2010 custom edition). Mason, OH: Cengage Learning
Naomi Nye was born to a German-American mother and a Palestinian-American father. However, she normally writes from her Palestinian-Arab perspective. In several of her poems within The Heath Anthology—“Ducks,” “My Father and the Figtree,” and “Where the Soft Air Lives”—Naomi Nye reminisces about her Muslim heritage and childhood as it correlates to her present identity. In addition, she incorporates the effect of the Palestinian-Israeli conflict on herself and on Arab culture in her work. Ultimately, Naomi Nye’s poetic work should remain in The Heath Anthology as her style demonstrates how historical events and a deep-rooted heritage can enrich a sense of identity and culture.
For government budgeting to be effective, the process that guides it must be an evolving one. As the government gets bigger, it will most likely destabilize the existing method. Therefore, it must change to keep pace with the demands and growth of the country. The process must be capable of handling the complexity of our nation and its multifaceted needs so it will always need revisions and restructuring to face these new challenges. Its ultimate goal must be to reinforce the government and strengthen the country.
Wildavsky, A., & Caiden, N. (2004). The new politics of the budgetary process (5th ed.). New York, NY: Pearson/Longman.
The budget is a method in which to reign-in discretionary spending, and will likely show variances between what costs have been anticipated and what costs are actually incurred. The Budget Process Budgetary planning may differ between organizations. Single-period budgets and rolling budgets have methodologies that provide advantages and disadvantages that may make one budget time frame better than another. A single period may require less time in planning during a fiscal year, but is less accurate than a rolling budget that is continuously planned on a repetitive basis. In either case, budgets are planned in advance in order for a company to operate profitably, and less so to have "actual results equal budgeted results."
For my field placement, I am supervised by a Licensed Clinical Social Worker (LCSW), M.V., at a county contracted agency in Los Angeles. Northouse (2012) describes traits as qualities for an individual. Hence, M.V. shares qualities for many traits that define her leadership traits. The first trait that I identified M.V. with having is intelligence, because of her superior language skills and knowledge about the program and agency (Northouse, 2012). Furthermore, M.V.’s intelligence allows her to be well respect at the agency, because of her appropriate decision making and hard work ethic. Staff members and interns respect M.V., because she is always the person to answer questions when they are unsure about specific procedures and policies. Moreover, M.V.’s intelligence allows her to also possess the trait of confidence. Northouse (2012) defines confidence as leaders that feel self-assured and feeling positive about one’s ability to succeed. Since M.V. is often the supervisor many view as a strong leader, her confidence comes from understanding the ability to make the decisive decisions. Furthermore, because of M.V.’s decisive leadership, her confidence allows people to be reluctant to question her decisions at the agency. Another trait M.V. shares is determination, which allows her to be focused and have the drive to complete difficult tasks in a timely manner (Northouse, 2012). Combined with her confidence and intelligence, M.V. is always determined to have perfect client files and notes finished in a timely manner. Moreover, M.V. takes the initiative to come in early and finish work later than other staff in order to complete administrative tasks at the agency. Alt...
“A budget is more than just a series of numbers on a page; it is an embodiment of our values”, Barack Obama. The utterance of these words could not have been a breath more of truth. For the Federal Budget is a reflection of the founder’s aspirations stated on the preamble. To specify, in the simplest of forms the preamble is a mission statement for the nation; it vaguely identifies the steps required for the prosperity of the nation. With the creation of the preamble, along came the Federal Budget; the budget being the nation’s budget that states the overall expenditures. The preamble being utilized in the birth process of the Federal Budget, Due to the lack of alignment between the federal budget and the preamble, funding in The big Five,
To effectively and efficiently manage one’s economic resources for the long-term, an accurate accounting of the current situation must be realized, and a subsequent plan put in place to achieve the highest and best results possible for the short-term contributing period. To make better financial decisions, there are an array of related tools available. These include budgets and the budget process, variances, financial statements, plus “assessments of risk and the time value of money, macroeconomic indicators, and microeconomic or personal factors” (Siegel & Yacht, 2009, p. 131). Budgets are money management plans which forecast expected performances of various budgetary items – including income, expense, cash and capital. By precisely
What is the federal budget? The federal budget is the yearly plan for how the US government will spend its money. After analyzing the federal budget, it was evident that the money was dispersed into three different clusters; the Big Five, the Middle Five, and the Little Guys. Although at first glance, the money may seem to be being evenly dispersed throughout the three, when taking a deeper look, there is clearly a fine line between what the government needs and what the government wants. The real question is; is the United States distributing its money correctly? In my opinion, after much research, the government could do a better job with the way it allocates its money. In each of the three budget clusters, the U.S. government should make
A budget is only a piece of a master budget. A master budget incorporates numerous budgets constituting a plan of action for a specified time period (Kimmel, 2009). The budgeting process, depending on the size of the company, can be done by one too many individuals working together to achieve a goal or goals. Depending ...
Participative budgeting has the advantage of transferring information from the subordinate to their superior This knowledge is likely to be more reliable and accurate as the subordinate has direct contact with the activity and therefore is in the best position to make budget estimates. Participative Budgeting also gives subordinates the opportunity to discuss organisational issues with superiors, in which an exchange of information and ideas can help to solve problems and agree future actions (Nouri & Parker 1998). This transferral of information is important particularly when dealing with a matter of high task difficulty as, the more difficult a task, the greater the need for consultation with subordinates. Participative budgeting has a higher performance rate when dealing with more difficult and more volatile tasks than non consultative budgeting (Lau & Tan 1998)
However, these reports can also be created to inform other organizational employees and the public. With a wide range of potential audiences, budget analysts must emphasize accuracy, thorough research and evaluation, and regulatory compliance. Due to a variety of audiences, effective budget analysts are able to communicate complicated decisions in layman terms (“Budget analyst,” n.d.). Ultimately, the work of a budget analyst may result in the success or failure of an
In order to answer this question, one must firstly look at the reasons why budgets are used as a form of organisational control in the first place. The role of a budget is to put long-term plans into exercise for the immediate future. Being used as a plan it enables managers to analyse the difference between planned and actual outcomes and with this information carry out the precise procedures to correct any negative variances to steer...
Line item budgeting categorizes various expenses and places them in list format on a document for budgetary purposes. This type of budgeting is considered the heartbeat of budgeting due to the systematic method by which it controls revenue and expenses, this is made evident when Tyer and Willand (1992), pointed out “Statutory or administrative controls could be imposed on the transfer of funds from one-line item to another, or between broad categories of expenditure.” According to Schick (1971), “line item budgets were attractive to legislative officials because they did not focus explicit attention on substantive policy issues or choices.”
If Incrementalism is adopted in budget process, it could be appropriate in researching the behaviours and strategy of policy actors; and could be a useful model in the process of administrative reforms. It could also be a good tool in the process of public management. Thus, Incrementalism may answer to key question by using previous historical data of what kind of budget has been used by the country in previous years, but it is not sufficient in the process of adopting new budget to count only on base budget. So, the Incrementalism is using base budget in the process of adopting new budget, and uses only inflationary adjustment from previous years and “the increments: some percentage increase from the base” and it “leads to a focus on micro-budgeting” (Lim, 2017, pp. 17-18). Then, when new budget is adopted, it’s has not too much of differences from previous year’s