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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.

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