The art of the budget
In any jurisdiction, the budget document is perhaps the most important vehicle in presenting comprehensive information concerning the government entity. It should provide not only financial information but insight into the policies of the entity. Upon examining the document, the layman should be able to gain a clear understanding of revenues and expenditures, organization structure, goals, objectives and achievements.
In Allegheny County, Pa., state law requires the independently elected controller to submit a proposed annual budget to the county commissioners by November 15 and requires the commissioners to adopt a balanced budget by December 31. The formal development of the operating budget for the county’s fiscal year is a continuous effort from May through December.
General guidelines for budget preparation are compiled jointly by the controller and the budget and finance division and are distributed annually to each county department. They usually limit percentage increases and decreases for personnel and non-personnel spending and set parameters for cost containment.
As each department prepares its budget, the controller and budget and finance division review individual requests and develop a computerized model to illustrate allocation and assist in appropriation. Following publication of the controller’s budget, the budget and finance committee conducts public hearings before the commission and subsequently proposes a budget for approval.
According to the Government Finance Officers Association (GFOA), a successful budget document will serve as a policy document as well as an operations guide, a financial plan and a communications device.
As a policy document, Allegheny County’s budget details financial and programmatic policies, goals, priorities, pertinent legislative matters, issues, highlights and a profile of the county government. It also serves as a financial plan, describing all county funds and summarizing major revenues and expenditures.
The largest portion of the document is the operations guide, which contains the budgets for individual departments and programs. Mission statements and goals are included in this section, in addition to capital expenditures and a list of major capital projects for the budget year.
The operations portion of the budget describes the many activities, services and functions of each organizational unit. Data are presented with financial analysis, sources and accounting for financing. Graphs, charts and tables are used to assist in comparative analysis.
Throughout the year, Allegheny departments are surveyed and requested to provide input regarding their accomplishments and ongoing and planned projects. Responses are incorporated into the budget for prior year actual, current year and budget year.
Ultimately, the budget document is a medium for communication. Within Allegheny’s document, summary information in the operating and capital sections explains the budget planning process. And an overview of the local government, including its organization, the community, population and other background data, is presented to assist the reader in understanding the county.
Allegheny County’s budget document is submitted to GFOA each year. The reviewers’ comments and recommendations are incorporated into the subsequent fiscal year document in order to improve the overall presentation of the budget and to ensure that the voluminous information of the county is presented clearly and concisely.