Budget Tools: Financial Methods in the Public Sector

✍ Scribed by Greg G. Chen; Dall W. Forsythe; Lynne A. Weikart; Daniel W. Williams

• Publisher: CQ Press
• Year: 2014
• Tongue: English
• Leaves: 516
• Category: Library

✦ Table of Contents

Half Title
CQ Press
Title
Copyright
Contents
Tables, Figures, Boxes, and Worksheets
Preface
How to Use This Book
Acknowledgments
Module 1: The Craft of Budgeting
References
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
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
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
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
Summary
Assignments
References
Additional Readings
Appendix A: Chicago Budget Message
Appendix B: Richmond, Virginia, Budget Message
Module 12: Determining the Baseline Budget
Defining the Baseline Budget
Nonpersonnel Services
Technical Adjustments
Annualizing the Base
Contract Values
Small, Infrequent Expenditures
Ratio of Expenditures to Number of Employees
Distribution to Line Items
Inflation
Calculation of Inflation
Garden City Day Care Center’s Baseline Budget
Personnel Services
Changes in Personnel Levels
Revenues
Summary
Assignments
Additional Readings
Module 13: Decision Packages: Cost Estimates
Budgetary Cost Estimate for a Decision Package
Steps for Making the Estimate and Work Paper
Cost Estimate Example: Garden City Day Care Center
Summary
Assignments
FluQ Case
Additional Readings
Appendix A: Format for Cost Estimate
Module 14: Decision Packages: Budget Justifications
Budget Justifications
General Guidelines for Budget Justifications
Section Breakdown
Budget Justification Example
Summary
Assignments
References
Additional Readings
Module 15: Budget Cutbacks
Decrementalism
Retrenchment
Examples of Fiscal Crises
An Exaggerated Fiscal Crisis
A Serious Fiscal Crisis
Summary
Assignment
References
Module 16: Legislative Budget Tools
Introduction to Budget Presentations
Delivering the Budget and Testifying
Two Scenarios
First Testimony
Second Testimony
Legislative Hearings
Message
Focus
Clarity
Preparedness
Loyalty
Legislative Analyst’s Tools
Quantitative Information
Transactional Changes
Capital Budget
Qualitative Information
Status
Policy Choices
Committee Report
Summary
Assignments
Additional Readings
Appendix A: New York City Fire Department’s Fiscal 2014 Budget
Module 17: Cost-Benefit Analysis
Concept of Cost-Benefit Analysis
History of CBA: A 200-Year-Old Tool
Conducting Cost-Benefit Analysis
Determining Standing and Perspectives
Determining Alternatives or Basis for Comparison
Listing Impacts
Monetizing Impacts, Including Both Costs and Benefits
Inferential Methods
Discounting Future Impacts
Calculating Program Net Present Value
Example of Net Present Value
Benefit-Cost Ratio
Example of Net Present Value and Benefit-Cost Ratio
Performing Sensitivity Analysis
Partial Sensitivity Analysis
Total Valuation Analysis
Monte Carlo Analysis
Example: Cost-Benefit Analysis of Brooklyn’s Atlantic Yards
Selecting the Alternative With the Largest Net Social Benefits
Limitations of Cost-Benefit Analysis
Summary
Assignments
Additional Readings
Module 18: Life Cycle Costing
Basic Concept of Life Cycle Costing
Brief History of Life Cycle Costing
Calculating Life Cycle Cost
Example of Life Cycle Cost
Limitations and Qualifications of Life Cycle Costing
Example of Life Cycle Costing in Public Projects With Unequal Economic Lives
Current Status in Application
The Future of Life Cycle Costing
Summary
Assignments
Additional Readings
Module 19: Capitalization and Depreciation
Government Accounting Standards Board (GASB)
Asset Capitalization
Categories of Capital Assets
Valuation of Capital Assets
Depreciation
Standards of Depreciation
Methods of Depreciation
Summary
Discussion Questions
Assignments
Additional Readings
Module 20: Long-Term Financing
Financing Capital Projects
Municipal Bonds
Types of Municipal Bonds
Bond Structure: Term and Serial Bonds
Debt Repayment Schedules
Summary
Assignments
Additional Reading
Module 21: Investment Strategies
Governing Authority and Investment Policy
Investment Policy
Investment Policy Statement
Short-Term Investment Strategy
Issues in Short-Term Investments
Investment Objectives: Safety, Liquidity, and Yield
Default Risk and Market Risk
Key Short-Term Investment Vehicles
Long-Term Investment Strategy
Key Concepts and Issues in Pension Fund Investment
Long-Term Investment Practices and Considerations
Key Investment Vehicles
Summary
Discussion Questions
Assignments
Reference
Appendix A: Sample Investment Policy
Module 22: Operating Plan and Variance Analysis
Allocation
Allotment
Variance Analysis
What Causes Variances?
Budget Modifications
Summary
Assignments
Additional Readings
Module 23: Cash Management and Internal Controls
Cash Management Policy
Types of Cash
Cash Receipts
Cash Payments
Checking Accounts
Petty Cash Funds
Credit and Debit Cards
Electronic Transactions
Controlling Personnel and Nonpersonnel Services
Requiring Vacations
Controlling Travel and Cell Phone Use
Monitoring Vendors
Preventing Bribery
Examples of Fraud
Summary
Discussion Questions
Assignments
References
Additional Readings
Module 24: Forecasting and Managing Cash Flow
Liquidity
Cash and Cash Flow Management
Cash Flow Budgets
Preparation of a Cash Flow Budget
Cash Flow Management Strategies
What Options Are Available If a Cash Shortfall Occurs?
What Options Are Available in the Case of Too Much Short-Term Cash?
Investing Short-Term Cash
Margin of Safety
Implementing and Updating the Cash Budget
Summary
Discussion Questions
Assignments
Additional Reading
Module 25: Government and Nonprofit Accounting
Fund Accounting
The Accounting Equation
The Balance Sheet or the Statement of Financial Position
Income Statement or Statement of Activities: The Statement of Revenues, Expenditures, and Changes in Net Position
Statement of Cash Flows
Journal Entries
Debits and Credits
Example of Debits and Credits
Summary
Assignments
Additional Readings
Module 26: Financial Statement Analysis
Fund Accounting
Oversight
Financial Statements
Government Balance Sheet: Statement of Net Assets or Statement of Financial Position
The Income Statement: The Statement of Activities or the Statement of Revenues, Expenditures, and Changes in Fund Balance
Ratio Analysis
Liquidity
Solvency
Profitability
Sustainability
Example of Ratio Analysis
Summary
Assignments
Additional Readings
Located Online
Appendix A: New York State Chart of Accounts
Appendix B: Spreadsheet Basics
Appendix C: Graphing Data Using Excel
Glossary
Index
Advertisement