Budgeting Process Coursework - 1100 Words

Budgeting Process (Coursework Sample) Content: Budgeting processStudent NameCourse NameCourse NumberInstructorSubmission DateIntroductionPublic budgeting systems are ways of selecting societal means and ends. It consists of a number of participants and processes. The processes help in bringing the participants in to interaction. The main purpose of budgeting is to allocate the ever-scarce resources among the always-competing public demands. This ensures that the societal goals and objectives are obtained. The budget cycle is the life of a budget from inception to evaluation (Lee, Johnson Joyce, 2008). The budget goes through a number of processes, which include preparation and submission, approval, execution and audit, and evaluation. This ensures that there is transparency in the budgeting process. Preparation and SubmissionThis is where the decision process takes place. Considering a federal government budget, the president, who is the chief executive, has the overall responsibility for the budget preparation. Different government agencies on the request from the chief executive prepare and submit their budget request. However, the agencies have to consider the priorities as directed by the chief executive (Alesina Perotti, 1996). The requests are then assembled into one document. The chief executive then reviews the requests. Here the chief executive has to consider the general welfare of the society. The public interests have to be considered and the general effect such a budget will have on the whole economy (Lee, Johnson Joyce, 2008). Another vital concern is whether the budget estimates will yield a surplus or deficit. The chief executive having reviewed and approved all the submissions then presents the document to the congress. However, it must be understood that the president does not directly do all this work. The president has a team of professionals who help him as advisors. The overall mission of the federal government is to equally serve all people. Thus, when preparing th e budget, the public interests should be integrated in to the budget. The effect of the budget to the economic environment is very vital. It has to be considered whether the budget estimates may deter businesses from growing (Lee, Johnson Joyce, 2008). High taxation for example may have a negative effect on small businesses. Thus, budget preparation ensures that the public interests are integrated into the budget. ApprovalWhat the president represents to the congress is just a proposal. The congress immediately begins the process of reviewing the presidents request. Once the lawmakers have thoroughly reviewed the requests, the budget committee in the congress and in the senate both writes a budget resolution. The resolution is just a blue print and not a binding document. The document provides the congress with a framework that enables that a good decision is made on spending and taxation (Schick LoStracco, 2000). It sets the annual spending limits for all government agencies and departments though not for specific programs. After the resolutions are passed by the two chambers, a joint conference takes place to reconcile the documents and an ironed out version is voted on by both chambers. The congress and senate includes members who have been democratically elected by the citizens. The two houses play a major role in the budgeting process to make sure that the will of the people is considered. They curb vices like back door spending where the president can just money on non-approved programs (Lee, Johnson Joyce, 2008). They also ensure that corruption and embezzlement of public fund does not take place. With an approved budget, the public knows the taxation rates, and how their hard-earned money, will be spent. Execution and AuditExecution is the phase of action of budgeting. All the plans included in the budget are put in to operation in this phase. The budget directly or indirectly contains the plans for the work to be done in the whole year. It also c ontains the achievements expected to be met. Execution involves putting the plans in the budget into action. The budget and planning office monitor how the agencies are spending the money. Agencies submit reports with summaries of the already spent amount and projections for the remaining time (Schick LoStracco, 2000). The reports are reviewed to identify any spending pressures in due time and identify areas that need adjustment to avoid overspending. Since agencies had already submitted their requests to the president, the actual appropriation may vary from the actual amount requested. The agency must accommodate the difference. The agencies must work within their budget. To ensure this various controls are imposed on the agencies which include preaudit among others. After granting an allotment, the agency must submit a request to the government to be allowed to spend the money (Lee, Johnson Joyce, 2008). The request has to be matched to the specific budget to identify whether th e expenditure is within the budget. As time goes by the congress can make appropriate changes to accommodate any arising issues or demands.The execution process is closely monitored since it is the most important phase. This is where the theoretical budget is proved in action. If not well monitored, the complete budgeting process can turn out to be a waste of precious time (Premchand, 1983). Auditing also ensures that departments are strictly spending as per the budget to avoid misappropriations of funds. EvaluationThis is the final stage in the budget cycle. In this stage an assessment on whether public resources have been appropriately managed is done. This is to ensure there is good governance and efficient use of public resources. All government agencies must submit reports at the end of the financial year detailing how the appropriated money was spent. The body constituted to...