1. Budgeting For the Public Leisure Services Agency
Financial Management
Budgeting
For the Public
Leisure Services Agency

2. Financial Management Preparing and Executing Budgets
Accounting Procedures
Accountability issues

3. Definition of the Fiscal Management Process
The management, custody and control of all revenues received by the agency and funds expended…......or the handling and responsibility for all money and items of value with the intent to accomplish the agency’s mission

4. Budgeting-Fiscal Management
A manager who believes in the value of his/her agency’s services to its constituents should be an aggressive seeker of funds to support its mission......not just a spender/allocator of what the agency receives.

5. Budget director’s (agency manager) dilemma
Balance
Fiscal Conservancy
don’t overburden taxpayer
maintain reasonable spending __________________________________
With
maintaining a viable, state of the art agency

6. Role of Leisure Service professional in fiscal management
need basic understanding of revenue sources, controls and accounting
need to be able to utilize budget to meet agency goals

7. Budget
Think of it as a fiscal or financial management plan for a given period of time
(most typically 1 year)

8. A well designed budget should accomplish the following:
1. provide a general statement of financial status (needs and resources), for all key operational (including program) elements.
2. Inform stakeholders of cost of achieving agency goals
3. Simplify operational procedures with well classified expenditures
4. Serve as a means of evaluating objectives

9. Budget types Operating day to day operations such as
salaries
rents
supplies
Capital Improvements
significant expenses such as large equipment, facilities and land
often managed as a separate fund (ie a bond issue)

10. Operating Budget styles
Line Item
(object classification by broad categories)
AGENCY
commodities
services personal
current charges, etc.
Problem: uses logical categories like supplies, but where the supplies are used cannot be determined
Program
starts with a line item basis but codes accounts by program units
AGENCY
Adult Softball
commodities
services personal
current charges

11. Program Style Budget illustrating several divisions and categories
Program Style Budget illustrating several divisions and categories. A straight line item/object budget would not have the extra division columns

12. Benefits of program style budget (Using the budget as a tool)
The reason for the popularity of the program budget type is the amount of useful information it can provide.
Programs can be evaluated and compared for cost effectiveness. Almost any combination of levels can be used.
For example, the administration account might remain general while tennis is broken into specific activities.

13. Legal aspects of budgeting
Enabling legislation and related state or local statutes typically outline agency fiscal policies, including but not limited to
sources of revenue (taxes, fees, etc.)
accounting procedures and tracking (audits)
calendars/presentation deadlines
public input, hearings and approval process

14. Budget process Steps include:
1. PREPARATION matching fiscal resources to the agency’s strategic plan
combo of top-down/bottom up approaches
develop justifications for all level
2. APPROVAL The policy board rules after agency presents and public input is heard
3. IMPLEMENTATION The manager authorizes expenditures while conforming to state law and established procedures

15. Budget preparation - need
Base budget on need that is justifiable
inflated arbitrary expenses reduce agency credibility
however, an agency loses credibility also if the manager is unwilling to ask for sufficient resources to do the job well....
just getting by isn’t supplying a quality service

16. Incremental budgets
Using incremental budgeting involves the process of adding a small increment (e.g. 4%) to last year’s budget.
it is easy and fits top down information on upcoming allocations (it is often used as a result)
This process is faulty in that it assumes that last year’s budget continues to meet constituent needs without justification.
instead, use the incremental approach for basic needs such as utilities, etc.. and let programs justify their existence.

17. Zero based budgeting options
zeroes out each account each year, requiring annual justification of every aspect of agency operations
is expensive and very time-consuming
As a result, many agencies use a modified zero base approach instead….where programs that are new, untested or marginal can be zeroed out and established programs not

18. Budget cutting What to look for
cuts in large expenditure areas result in the greatest savings
if personnel accounts for 75% of expenditures a 10% cut in this area will result in 75% of needed savings
consider cutting or privatizing entire program units rather than hurting all programs
look for poorly performing or expensive programs
cutting cost effective programs is inefficient
cutting adult sports (no subsidy) instead of youth sports (50% subsidy) results in no savings

19. Hints for budget preparers
always underestimate revenues
maintain a slight surplus (carryover) for emergencies and shortfalls
develop a special account (avoid use of the term miscellaneous) MPRD calls theirs NEW Programs, so that new programs, not thought of during the planning process, can be added while maintaining agency compliance with the Cash Basis Law

20. Investment of Idle funds
Agency managers are expected to invest idle funds so that interest can be earned until the funds are needed
the preferred investment is a certificate of deposit, as these are safe, relatively liquid and can be purchased with varying maturity dates. KS State Bank has a special savings/checking account that earns the owner 3-4% interest but requires 10 or more transactions per month. In other words, look closely at like options.
Your student recreation fees are invested but the interest is credited to the state’s general fund and not rec services

21. Bank selection
In a community the selection of a bank or banks might take the following forms
require a bi-annual (or less frequent) bid of services and merely take the best bid (certainly acceptable)...
use several banks to keep taxpaying banks happy (one for operating, one for capital, another for grants, etc..) can be confusing and necessitates some paperwork expenses.

22. Use of Banks
Banks are taxpayers and it is a nice to be able to use different banks in a community
The best policy is probably to have financial service bid on by various banks every 3 years or so (everyone has an equal chance)
Other approaches include keeping separate funds in different banks, or alternating, etc..