Budget
Administration
Administration
Individual lines are used to describe allocations for various items of expenditure; focus on what was purchased, not the purpose for the purchases.
Line-Item Budgeting
When economic or political conditions change, the budget is renegotiated; adaptiveness is maximized.
Repetitive Budget
The total labor cost to be expended for a set period of time calculated by taking every person in an organization, department, or project and multiplying the number of hours they are expected to work by their wage rates.
Labor Budget
Performance budgeting (PB) is launched by adding data on performance to the stockpile of information already processed through the budget.
Information Overload
A business’s forecasted revenues along with forecasted expenses, usually for a period of one year or less.
Operating Budget
1) Identify decision units, 2) Develop decision packages, 3) Rank the decision packages
Zero-Based Budgeting - 3 Steps
Annual budget on a cash basis with line items.
Traditional Budget
An estimate prepared for travel, utilities, office supplies, telephone, and many other common business expenses for a given period.
Expense Budget
The volume of services; qualitative characteristics such as access to services, courtesy with which they are provided, and responsiveness to citizen needs.
Outputs
A forecast that starts with the sales budget’s estimates of the total number of units projected to be sold, then translates this information into estimates of the cost of labor, material, and other expenses required to produce them.
Production Budget
Allows administrators in the organization to participate in the process of formulating the budget and then submit to upper-level administration for approval.
Site-Based Budgeting
Vertical comprehensiveness – alternative expenditures from base zero are considered for all government objectives and treated as distinct entities.
Zero Base Budgeting (ZBB)
Supervisors and middle managers prepare the budgets and then forward them up the chain of command for review and approval.
Bottom Up Budget
A system for compiling and presenting information on actual or expected results;
“buying” results through the expenditure of public funds.
Performance Budgeting (PB)
A written estimate of how an organization — or a project, department, or business unit — will perform financially.
Budget
Process of calculating the costs of operating and then applying the legal provisions and restrictions to determine the sources of revenue and amounts obtainable.
Budgeting
Spending was to be related not to actual growth but to desired growth, with only the designated margin available for new expenditure.
Structural Budget Margin
An estimate of a company’s cash position for a period.
Cash Budget
The impacts of government policies and actions on society.
Outcomes
An estimate of the quantity of goods and services that will be sold during a specific period.
Sales Budget
Very similar to zero-based budgeting, but it does not assume that all programs must be re-justified during each budget cycle.
Planning Programming Budgeting Systems (PPBS)
Horizontal comprehensiveness – comparing alternative expenditure packages to decide which contributes best to the larger programmatic objective.
Planning, Programming and Budgeting (PPB)
The total costs and maintenance fees planned for your company’s fixed assets.
Capital Budget
Performance budgeting (PB) often suffers from data shortage pertaining to the cost of producing public services and changing social outcomes.
Critical Data Gaps
Budgets are prepared by top management and imposed on the lower layers of the organization.
Top Down Budget