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Literature review on the budgetary process
The processes involved in budgeting
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Recommended: Literature review on the budgetary process
Governmental Budgeting Process
Budgeting in the public sector is typically performed with the culmination of many departments. It combines planning and budgeting to assist individual departments in developing their budget to be consistent with specific objectives as well as strategic goals. Revenues can be particularly challenging to forecast due to unknowns such as enrollment and state funding. “Black Hawk College relies on three primary sources of revenue: tuition and fees, property taxes including Corporate Personal Property Replacement Tax (CCPRT), and state funding” (Black Hawk College, 2009). In addition to these revenue sources, the college receives revenue by way of interest income, facilities rental, federal sources, customized training, and contingency funding.
Tuition and fees comprise 42 percent of overall revenue received. During the process of budget building the Chief Financial Officer is charged with determining an appropriate increase to tuition and fees which is then voted upon at the February board meeting. Fees included are instructional materials fee, auxiliary fee, and technology fee.
Property taxes from the nine (9) counties the college serves are levied each year for all taxable real property in the district on the basis of the equalized assessed property values (EAV). The assessed values are established by each of the respective counties. CPPRT is classified as local source revenue.
State funding is received through two primary sources: Illinois Community College Board (ICCB) Equalization Grant and ICCB Credit Hour Grant. “The equalization grant attempts to reduce the disparity in local funds available per student among each district” (Black Hawk College, 2009). The credit hour grant is...
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... retraining or enhanced training.
In conclusion, revenues can be particularly challenging to forecast due to unknowns such as enrollment and state funding. It is imperative the college be able to forecast when revenues will be received and in what amounts as well as when expenditures will occur and in what amounts over the course of the fiscal year and beyond. With a watchful eye on the economic conditions in the area and a keen sense of forecasting the community wants and needs, it is possible to make accurate predictions as to revenue.
Works Cited
Black Hawk College. (2010, October). Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2010. Retrieved February 16, 2011, from http://www.bhc.edu/DocumentView.aspx?DID=1809
Lee, R.D., Johnson, R.W., & Joyce, P.G. (2008). Public budgeting systems (8th ed.). Massachusetts: Jones and Bartlett
I attended the Saturday Lab 1 session discussing the Denison Specialty Hospital case study. In our session, we had a through discussion into the different budget terminology. I learned about the difference between accrual and cash accounting methods, which is based on the timing of when the revenue and expenses are recognized. I also learned about responsibility centers as an organizational unit under the supervision of a manager, who is responsible for its activities and results. In addition, the manager is accountable for the budget of the department that they head. Therefore, a centralized form of management in developing the budget because it makes easier to because the information for the department budget is located
Mikesell, J. L. (2010). Fiscal administration: Analysis and applications for the public sector (8th ed.: 2010 custom edition). Mason, OH: Cengage Learning
Since the 1980’s the cost of attending colleges have increased rapidly. Rising costs of for Medicare, highways and prisons have caused many states to reduce a percentage of their budget for higher education. Colleges and Universities currently face a very serious challenge:
Our Preamble lists five main goals that are required to help create a strong and stable society within our country. However, money is required in order to achieve these goals. We get this money from the Federal Budget which is the yearly amount we receive in order to better our country. The question here is, are we slicing the pie correctly in relation to the federal budget? In each of three budget clusters, the U.S Government should make adjustments in the way it is distributing money by making changes involving the Big Five, the Middle Five, and the Little Guys.
At the beginning of the 20th century, government budgeting was a decentralized process more conducive to the small government ideals at that time. The executive branch was less involved in the process and less influential in terms of funding decisions. There were no definitive procedures and no real central authority. The submission process was informal and chaotic. Each agency subm...
McManus, Doyle. “Drawing Budget Battle Lines.” Editorial. Los Angeles Times. Los Angeles Times, 14 Apr. 2011. Web. 5 June 2011. .
...earn the material. Schools for the most part budget the money that they get to the best of their ability, but need more money to use for these basic and important needs. Overall the school budget committee needs to start from the bottom and fund what is necessary and needed to get schools back on their feet. These easily solved problems are a key part of school funding and should be addressed appropriately.
Local governments rely on property tax as a source of revenue to pay for school. Yet people in the urban areas pay the higher tax than suburban and wealthy communities, states on the other hand, relies on The Average Daily Attendance (ADA), which calculates state aid to school districts, tends to discriminate against urban school districts with high absentee rates by automatically, and excludes 15 percent of its student aid. Therefore, in many urban areas, the state ratio of funding remains significantly lower than 50 percent out of the tree entities the federal government allocates the least amount of funding. Residents in these areas who are under edu...
The federal budget is known as the notorious economic tank from which money is distributed to various programs. The money used every fiscal year, which begins October 1st and ends September 30th the next year, belongs to the people. The government raises this money through taxes and they spend it on national defense, Medicare, and social security. The federal budget is an exercise in making choices, and those options will certainly affect individuals living in the U.S. These choices cause debt to pile up on the government, who is struggling to make it disappear. The deficit and debt of a government gauges how well it is being run and how well it has been run in the past. According to The Economist the national debt is the total outstanding borrowing of a country’s government; it is an accumulation of deficits that has yet to be paid off (Economist, A-Z). The current U.S. federal deficit, as of the 2013 fiscal year, is a monumental $680 billion dollars, adding to an even higher debt. Any attempt to diminish this debt has the consumer footing the bill, but there has to be a different way. There have been requests to increase taxes, to raise revenues for transportation infrastructure, to restrategize the military force or to make defense more affordable (“15 Ways to Rethink the Federal Budget”, Brookings).
With the rapid growth of college tuition, it has become an important issue in higher education. College Tuition is simply defined as the charge or fee for instruction, at a private school or a college or a university. Most people agree today that college tuition is too high or that it needs to be completely dismissed. There are some however, that may disagree with the claim about college tuition and state that college tuition is necessary for college growth, and it’s primary purpose is to pay for college expenses to support the institution financially. Research shows that college tuition is too high and that debt has become a standard in America after attending post-secondary school.
As colleges’ funds dry up, colleges must turn to the public to further support higher education. By raising state taxes, colleges can collect funds to help improve the school’s budgets. The state provides funds from the taxes for colleges to receive a certain amount for each student currently enrolled. All community and traditional four year colleges collect these funds in order to maintain the school’s budget. As reporter,
-Hyman, David M. (1990) Public Finance: A Contemporary Application of Theory to Policy, 3rd, Dryden Press: Chicago, IL
Rabin, J. (2003). Encyclopedia of public administration and public policy: K-Z. United States: CRC press.
It requires an adequate and sound organizational structure, that is, there must be a definite assignment of responsibility for each function of the enterprise. Budgeting compels all the members of management, from the top to bottom to participate in the establishment of goals and plans. Budgeting compels departmental managers to make plans in harmony with the other departments and of the entire enterprise. Budgeting helps the management to put down in figures what is necessary for a satisfactory performance. Budgeting helps the management to plan for the most economical use of labor, material and capital. Budgeting tends to remove the cloud of uncertainty that exists in many organizations, especially among lower levels of management, relative to basic policies and objectives. Budgeting promotes an understanding among members of management of their co-workers' problems. Budgeting force management to give adequate attention to the effects of general business conditions. Budgeting aids in obtaining bank credit as banks commonly require a projection of future operations and cash flows to support