Survival Guide for Local Government Budget Season

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We said the “B” word: Budgets. They can be…well, a bugger. Long, complicated, and requiring a lot of analysis. A few “B” words came to our mind when thinking of budget: “boring,” “baffling,” and “bothersome.” But that’s ok, because we’ve pulled together a list of local government best budget practices that are the exact opposite–short and sweet–to assist with your budgeting success.

 

A Clerk’s Survival Guide to Government Budget Planning

Determine What Elements to Include In Your Annual Budget.

Planning the annual budget is a long process, with many daunting tasks and thoughtful considerations. Some budgets are fairly straight forward, while others are specific and complex documents. Regardless of length and complexity however, there are some basic elements that are a part of every budget, such as:

  • Projected expenses
  • Projected income
  • Funding (including parameters and restrictions of these funding sources)
  • Estimates and actual adjusted numbers (which are completed and analyzed as the year progresses)

Thorough understanding of financial policies (or development of those), operating and capital policies and procedures, and management strategies help create a well-planned budget with realistic numbers and smaller contingencies. Each government should have an established process for budget preparation that includes the approval hierarchy, timelines, and parties involved.

Determine Needs and Priorities.

Understanding what the community needs, what should be a priority, what challenges you will face, and what opportunities exist will help you determine what needs take priority to strengthen your community and your relationship with constituents. A good idea of the opportunities, priorities and challenges you face give the budget a general direction for the upcoming year. Consider these questions, which will help you determine what expenses and projects should be included in the budget:

  • What programs or activities advance the cause of the community the most, and what resources do you have to carry out these programs?
  • How will these activities and programs be perceived with your constituents?
  • How will these line items and projects affect your community?
  • Who and what organizations will be involved and how will they be compensated?
  • What other items will be needed to run the activity (i.e. space, supplies, equipment, utilities, insurance)?

Analyze Assets.

Every government entity needs to assess its ability to fund projects and what the assets are at hand. This includes understanding operations, services provided, capital assets, and what it takes to maintain these.

Estimate Expenses.

While some of the expenses are fairly fixed and easy to estimate for the year—rent, salary, insurance—any new or changing projects or activities will require an estimated monthly and annual cost. Start by listing estimates for absolute necessities such as utilities, rent, salaries, and operating costs. Then, list expenses for program supplies and equipment, followed by a list of all obligations such as fees for services and liabilities. Finally, list estimated expenses for things you would like to be included, but aren’t necessities. Don’t forget to give yourself some room for costly unforeseen circumstances, or contingencies.

Estimate Income.

Just as you did with the expenses, start with the figures and estimates from funding sources that are regular and dependable, followed by any funds from fundraising, charge fees, sales, dues, investments and other sources of income.

Evaluate, Analyze and Adjust the Budget.

A budget requires the monitoring, measuring and analyzing of its programs for future budgeting. If an area of the budget is not meeting its financial goals, it needs to be reviewed to determine if the goals and processes remain relevant.

Each entity needs to develop, report, and update long term plans and projections for accurate budgeting, and how they expect those projects to be funded. No budget is perfect—it takes many heads and a lot of analyzing to determine how much money should go where—but with proper knowledge, input and analysis, you should be able to prepare a document that will tell you how much is available to spend on particular programs, activities and expenses.

Create an Adoptable Budget. A comprehensive budget will include all the information necessary for the recommended budget to be approved, including Goals, Projects, Income, Assets and Expenses. Most budgets also include the following, to help move the budget approval process along seamlessly:

  • Description of key policies, plans and goals
  • Key issues
  • Financial overview
  • A guide to operations
  • The budgetary basis of accounting
  • A budget summary

With the right planning and understanding, you can turn a budget into a few good “B” words, like “brilliant,” “bold,” and “balanced.” It just takes thoughtful planning and approaches to assess specific needs and measures to obtain them.

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