1. © 2012 Delmar, Cengage Learning Section V Getting the Job Done… Through Others Chapter 14 Budgeting and Managing Costs Creatively

2. © 2012 Delmar, Cengage Learning Budget Defined Budget –A list of probable expenses and income during a period –A critical instrument in law enforcement planning, administration and operations Financial budget –A plan or schedule adjusting expenses during a certain period to the estimated income for that period

3. © 2012 Delmar, Cengage Learning Types of Budgets Operating budget Capital budget Discretionary budget

4. © 2012 Delmar, Cengage Learning Purposes of Budgets A plan for and a means to control resources Permit decision making at lower levels Help reduce tendency for divisions to build their “own empires” Compare expenditures with services provided Law enforcement’s work plan transformed into dollars Reflect the political realities of law enforcement agencies and their jurisdictions

5. © 2012 Delmar, Cengage Learning Responsibility for Preparing the Budget Managers at each level should be responsible for the budget they need –Based on input from their subordinates –Results in all-levels budgeting Budgets will be more accurate and complete if –They are prepared using a logical process beginning with the department’s lowest levels and working upward

6. © 2012 Delmar, Cengage Learning The Budgeting Process Developing a budget is an art, not a science. Determine personnel costs. Review last year’s budget.

7. © 2012 Delmar, Cengage Learning Budgeting Systems Line-item budgeting Performance budgeting Program budgeting Activity-based costing Zero-based budgeting

8. © 2012 Delmar, Cengage Learning Budget Categories Variable costs Fixed costs

9. © 2012 Delmar, Cengage Learning Monitoring the Budget After the budget is passed, spending must be monitored. Variance analysis is comparing actual costs against what was budgeted and analyzing the differences.

10. © 2012 Delmar, Cengage Learning Cutback Budgeting Providing the same or more services with less funding Causes of cutback budgeting –The problem is considered solved –Erosion of the economic base –Inflation –Taxpayer revolts –Limits to growth

11. © 2012 Delmar, Cengage Learning Approaches to Handling Budget Cuts Cut all requests for personnel increases. Cut equipment viewed as luxuries. Use precedent—cut items that have been cut before. Recommend repair and renovation, not replacement. Recommend a study to defer the costs. Cut all costs by a fixed amount. Cut departments with a bad reputation. Don’t cut when the safety of staff or the public is involved.

12. © 2012 Delmar, Cengage Learning Managing Costs Creatively Identify common cost problems Employee cost improvement suggestion programs

13. © 2012 Delmar, Cengage Learning Creative Ways to Reduce Costs Sharing resources Using a regional approach or consolidating services Establishing community resource centers Contracting Using a quartermaster system Using volunteers Privatizing

14. © 2012 Delmar, Cengage Learning Increasing Revenue Fundraising Donations Charging for some services Using asset forfeiture statutes Going green Seeking grants