1. Confidential & Proprietary Internal Kaplan Use Only. UNIT 3 PREPARATION OF UNIT BUDGETS AND BUDGET DOCUMENTS – Step 3 of the Budget Process

2. Confidential & Proprietary Internal Kaplan Use Only. BUDGET DOCUMENTS Budget documents can vary volume and depth depending on the jurisdiction Recent trends in budget publication have focused on creating budget documents that are easily accessed and comprehended by the public Executive Summaries Charts and Tables Narrative components describing the numeric data Historical and comparative data The Government Finance Officers Association annually awards the Distinguished Budget Presentation Award to State and Local Governments

3. Confidential & Proprietary Internal Kaplan Use Only. OTHER BUDGET DOCUMENTS In addition to an operating budget, some jurisdictions will also publish a capital budget -A capital budget details long term, large construction project spending and the purchase of fixed assets Debt Financing and Management is also reported in budget documents - You’ll learn more about capital budgets and debt reporting in Unit 7

4. Confidential & Proprietary Internal Kaplan Use Only. OTHER BUDGET DOCUMENTS (CONT’D) Common inclusions in budget documents include: -Executive Summary -Strategic Initiatives -Financial Guidelines -Revenue and Expenditure Analyses -Individual Unit, Departmental, Program Budgets -The budget methodology or organizational structure being utilized in the jurisdiction determines the lowest level of individual budget reported and then summarized into the overall budget -Narratives

5. Confidential & Proprietary Internal Kaplan Use Only. EXECUTIVE SUMMARY The Chief Executive utilizes the Executive Summary to provide the overall budget perspective -This summary often includes a reference to the strategic initiatives and financial guidelines that framed the budget considerations -The summary can also highlight specific areas of concern within the jurisdiction

6. Confidential & Proprietary Internal Kaplan Use Only. STRATEGIC INITIATIVES/FINANCIAL GUIDELINES As mentioned in the Budget Process Part I presentation, the strategic initiatives and financial guidelines are the framework around which a budget is crafted and budgetary decision are made -Including these items in the summary provides a bases for the Chief Executive to substantiate the budgetary decisions contained within the documents

7. Confidential & Proprietary Internal Kaplan Use Only. REVENUE/EXPENDITURE ANALYSIS Most budget documents will include analyses of historical and current revenues and expenditures This provides a perspective on how the budget has changed year over year and also includes how well the jurisdiction has performed when comparing prior budgets to actual performance. These analyses frequently include a forecast of future revenues and expenditures over a two to five year period This information is an indicator as to what future budgets may hold, or, what actions may be necessary to undertake in the current budget year in order for the jurisdiction to continue to be fiscally sound

8. Confidential & Proprietary Internal Kaplan Use Only. INDIVIDUAL UNIT, DEPARTMENTAL, PROGRAM BUDGETS The budget methodology or organizational structure being utilized in the jurisdiction determines the lowest level of individual budget reported and then summarized into the overall budget Funds, that are a way of accounting for revenues that are restricted for a specific purpose are also reported ◦ An example of a special fund is a Road Fund. A tax is levied on gasoline and then distributed to jurisdictions with responsibility for road maintenance (calculated via a formula). The tax revenue is then accounted for in a separate fund of the jurisdiction to be used solely for the maintenance of roads within the jurisdiction

9. Confidential & Proprietary Internal Kaplan Use Only. NARRATIVES Narratives have become an increasingly common feature of government budgets -Rather than confine the budget to solely numeric information, narratives provide an opportunity for the figures to be interpreted from a public administration perspective -In reading various types of budget narratives, you’ll find they can range from factual reporting to impassioned polemic -As jurisdictions are subject to increasingly sever budget constraints, budget narratives have often been utilized to substantiate reduced programs and services

10. Confidential & Proprietary Internal Kaplan Use Only. INFORMATION INCLUDED IN BUDGETS Revenue Expenditures Resources (personnel) Program Information -Summary of programs and/or services provided by the jurisdiction Workload Information -The amount of output the jurisdiction achieves -i.e. the number of social security benefits paid

11. Confidential & Proprietary Internal Kaplan Use Only. SUMMARY (CONT’D) In this unit, you’ve learned the most common documents contained in a government budget -Note that, depending on the jurisdiction, there are a number of variations or additional documents that may be included in a governmental budget