Assignment: Zero-Based Budgeting

Assignment: Zero-Based Budgeting.

Although there are different types of budgets, they all share similar characteristics. For example, all budgets list revenues and expenditures by type. Revenue is money collected through a variety of sources including taxes or federal grant funding in criminal justice systems. Expenditures detail how collected funds are paid out or spent. Usually the budget is printed on a spreadsheet clearly indicating revenue and expenditures.

Two techniques used to create budgets are incremental budgeting and zero-based budgeting. Incremental budgeting begins with the funding level from the previous year and then provides an incremental increase and/or decrease. Thus, additions or subtractions from the previous year’s budget occur when need is demonstrated. Zero-based budgeting requires justification of all budget requests by showing a need for both revenues and expenditures before funds are allocated. Although both types of budgeting techniques are used in public budgeting, zero-based budgeting is more commonly used in the private sector. Use of zero-based budgeting in the public sector may be more beneficial when an agency is facing financial stress or must reduce spending.

In zero-based budgeting, each budget heading begins with a zero balance and the budget is built from the ground up. Proposed budget items that cannot be justified as necessary or important are not approved or funded. In zero-based budgeting, three budgets may be submitted during the funding cycle in order to show the best-case scenario, the worst-case scenario, and the most-likely-case scenario with, for example, a 20% monetary difference between each. Each budget will prioritize spending by identifying high-priority items and low-priority items. If there are more budget items than money to spend, the high-priority items are funded first and the low-priority items are funded in a piecemeal fashion or not at all.

To prepare for this assignment:

• Review Chapter 1 of your course text, The Basics of Public Budgeting and Financial Management, and focus on common characteristics in budgets. Pay particular attention to revenue and expenditures.
• Review the article “‘Techniques’ for Governance.” Consider the advantages of using zero-based budgeting in public agencies.
• Consider zero-based budgeting as a technique for creating budgets. Think about how expenditures are justified using zero-based budgeting.
• Review the list of expenditures on the budget sheet provided in the Learning Resources.
• Think about how you might prioritize the expenditures you reviewed from highest to lowest.
• Consider the two expenditures with the highest priority and justify them according to your prioritized list of line-item expenditures.

The assignment (1):

• Prioritize the expenditures from highest to lowest.
• Using a zero-based budgeting technique, justify the two highest-priority expenditures according to your prioritized list of line-item expenditures.

Assignment: Zero-Based Budgeting

 

"If this is not the paper you were searching for, you can order your 100% plagiarism free, professional written paper now!"