1. BUDGET METHODS AND PRACTICE Preparation of Agency Budget Requests Review of Budgets Balancing the Overall Spending Plan Managing Budget Execution Audit & Evaluation

2. PREPARATION OF REQUESTS I Budget Instructions or Guidance –Main Goals of the Executive –Forecasts of Critical Operating Conditions and Prescribed BASELINE –A Prescribed FORMAT –A Time Schedule –MAXIMUM Increase

3. PREPARATION OF REQUESTS II Agency Proposals –Narrative -- Current Commitments and Expected Results from New Initiatives –Detail Schedules establishing Baselines –Cumulative Schedules Showing Effects of New Initiatives (up or down) on Details and Revised Totals Description dominates numbers. Budgeting is logic, justification, and politics -- not accounting.

4. Spenders’ Budget Tactics: Ubiquitous Cultivation of an active and influential (well-organized) clientele –Media Demonstrate competence –Deliver –Explain -- show understanding and mastery of situation

5. Spenders’ Budget Tactics: Contingent I Avoiding Cuts: Propose a study Cut Popular programs Dire consequences All or nothing You pick We are the experts Seeking Bucks for the Base Round up Glitter Sprinkling Physical units Workload and backlog

6. Spenders’ Budget Tactics: Contingent II Seeking New Bucks: Old stuff Initial commitment It pays for itself Spend to save Crisis Mislabeling What they did makes us do it Mandates Matching the competition It’s so small

7. Budget Justification -- Or, Why the Numbers in Next Year’s Budget are Different from this Year’s Major Programmatic Changes/New Services -- Major Cutbacks of Service levels Price/Wage Changes Workload Changes Methods Improvements Full Financing of Activities Initiated in the Current Year

8. Estimates: Grouped by Organization; Task, Purpose, Function, or Activity, AND OE or Account Code Wages and Salaries Non-Wage Personnel Costs Non-personnel Costs (Cost Drivers) –Volume x Unit Price –Ratios to another OE –Adjustment to Prior Year Cost Breakeven Analysis

9. EXECUTIVE REVIEW I Policy Rationale/Conformity with Executive Priorities Conformity with Budget Guidance/Including all Required Supplemental Documents Arithmetic

10. EXECUTIVE REVIEW II Linkages Program Changes Omissions Ratios, Shares, Trends Clear Tradeoffs

11. BALANCING THE CONSOLIDATED BUDGET Budget Message Summary Schedules Detail Schedules –Performance Targets Supplemental Data –Many on the Assumptions Presented in the Budget Guidance and Trends

12. BUDGET EXECUTION I Preventive Controls –Procurement –Personnel –Pre-audit –Allotments Feed-forward Controls -- Diagnostic Tools, e.g. variance measures Feedback Controls -- affect Next Year’s Budget, Fig. 3.1

13. BUDGET EXECUTION II Internal Controls –Personal Responsibility –Personnel Qualifications & Rotation –Segregate Responsibilities –Separate Operations and Accounting –Maintain Controlled Proofs and Security –Record Transactions -- complete journal and general ledger