Advantages And Limitations Of Budgeting

A budget is a plan of action set by resources required to implement the plan. Simply, budget plans are put in place to help fix most of the fiscal damages that a company and or an agency would face. A recent study by Walther and Skousen (2009, pg. 10) indicated that, “A budget is a detailed financial plan that quantifies future expectations and actions relative to acquiring and using resources. Budgets don 't guarantee success, but they certainly help to avoid failure”. Although, there is no promise of success, a budget plan tends to predict the spending and can show the fiscal path of an entity. Hence, it also allows room for avoiding excess spending that can cripple a business. In this easy, the New York City-Department of Consumer Affairs’-(NYC, DCA) budget reports will be used as an example to better understand budget practices. This report sets out to give some possible recommendations on how to solve the current budget predicament faced by that the NYC, DCA. Based on the analysis of NYC, DCA’s current budgeting process discussion of the budgeting literature will evaluate the advantages and limitations of the current budgeting process. Suggestions on the implications of the actions will be offered so as to meet the budget requirements. In this report,

Due to the primarily aging population of the United States, state and local governments are allocating large and increasing shares of their budgets to expenditures on Medicaid and on retirement benefits that they have promised to their past and current employees. As these expenditures consume more of their budgets, there is less to spend on transportation, parks and recreation, education, public safety, and all the other services that these governments provide. We are thus experiencing the onset of a New Fiscal Ice Age, a period in which a given level of tax revenue purchases a considerably lower level of current services (Kiewiet & McCubbins,