Evaluation of Agency's Budgeting and Cumulative Report (Essay Sample)

Evaluation of Agency’s Budgeting and Cumulative Report
Name
Institution
Date
Budget Overview
The agency’s expenses include salary expenses, supplies, consultants, communications, equipment, travel, audit, training, education, medical care and space. The agency’s budgeting falls under the education, training, employment and social services function under the Fiscal year 2012 budget. The agency’s budget further falls under the social services sub classification.
Budgeting is usually a responsibility mandated to the finance department but really involves everyone on a micro level. The Financial analysts may compile and monitor it but they have to collect information from all other departments because expenses cut across all departments. It is therefore important for the mangers and their subordinates to be actively involved in the planning because they have more experience with the daily running of the agency and are therefore more aware of daily costs as well as miscellaneous costs (Wildavsky, 2006).
The agency may need to hire consultants to help them gauge market trends and what changes are likely to affect their expenditure. Consultants will also likely help them know what the law requires of them, what the mandatory costs are and what costs they do not have to incur. It is also important that they consult on requirements they may have overlooked that could crop up in the future when they are least expected.
Budgeting Assessment
Budgeting for an organization falls into two categories, mandatory and discretionary budgeting. Mandatory budgeting usually is the kind that is laid out by law and entails incurring expenditures on requirements by the law. Usually Medicare and social security take up the bulk of most of the mandatory budget. Other mandatory law requirements for budgeting include but are not limited to earned income, unemployed people’s compensation and taxes. Discretionary spending is spending that the organization could do without or subsidize for a cheaper version that would work just as well.
Program administrators are mandated with the careful observation of mandatory budgeting and are required to keep up with emerging law requirements to ensure the agency does not overlook new requirements during budget or worse still get into trouble with law enforcers. Primary accountability areas include but are not limited to Medicare, social security, health and safety compliance and audit (Braconier, 1999). Regular updates especial to funders and stake holders are also expected. They might have to be looped in during budgeting especially discretionary budgeting.
Politics surrounding accountability and the allocation of resources especially in certain industries such as social services are inevitable. In response to this, the International Monetary fund drafted a code of good practice in relation to fiscal policy. The code places a lot of emphasis on transparency and accountability among those taxed with the planning and implementation of budgets. It also outlines the importance of having those directly affected by the budgeting take part in decision making during planning and allocation of resources.

Analysis of Budgeting Plans and Actual Expenditures
Budgeting efficiency is measured by the extent to which actual expenditures measures up to planned or budgeted expenditure (Hammonds, 1997). Usually the difference is either in surplus or in deficit neither of which should be the case. Continued efficiency usually has the planned expenditure amount as close as possible to the actual expenditure because that’s the whole point of planning. A deficit is often a result of poor planning which entails an oversight of important future expenses. There should be enough estimated provisions for unforeseen or emergency expenses. Sometimes a deficit is inevitable as there could be unpredictable occurrences that cost more than the set aside provision. This however should be in very exceptional cases and must not recur.
Some of the intergovernmental organizations that may affect the agency’s budgeting decisions include United Nations Children’s Fund and World Health Organization. This is because both directly deal with important aspects of the agency’s main functions.
Implications of Foreign Policy
Policy making in one way or another affects budgeting. Changes in foreign policy are likely to adversely affect budgeting especially when they are passed after budgets have already been drafted. For instance a tax cut could lead to less governmental revenue, but could also boost private investment. Usually, it is difficult to make provisions for policies that are likely to be passed because it is difficult to predict such policies or the extent of their effect on the economy. Usually policies that are aimed at stabilizing an economy have short term effects on budgeting. However policies which end up having an unanticipated adverse effect on the economy may adversely affect budgeting and could mean more actual expenditure and less anticipated revenue for organizations.

Budget Requests and Recommendations
I would recommend a more detailed plan. Planning entails determining what should be accomplished way in advance. It entails, the what, how, by whom and at what cost. The more detailed a plan is the better it can be budgeted for and usually the finer the break down the easier it is to narrow down more accurately to costs that would otherwise have been overlooked. There are four kinds of planning, contingency, tactical, managerial and strategic. Usually a combination of the four methods yields better results.
Strategic planning involves the determination of organizational goals and how to achieve them. This usually is done at top management level during strategic business planning and usually covers the broader objectives and goals. During this stage, the strategy lay out determines how well the budgeting needs are outlined and consequently planned. Usually strategic planning covers the organization’s end goals and therefore usually it is very general. A good strategic plan attempts to break down goals into short long and medium term goals. These are further broken down into shorter period goals such as monthly or quarterly goals. When goals are broken down into such fine details, the budget plan also has to be broken down into such specific fine details. It is therefore easier to measure fluctuating and miscellaneous expenses more accurately making it likelier for the actual expenditure to match the budgeted one.
Tactical planning entails the actual implementation of strategic plans and involves the middle and lower management. At these levels, budgeting is much more detailed as the people on these levels are more hands on with the day to day running of the organization and by extension are at a better position to predict costs. They therefore work the real situation on th...