Comparative Analysis Of Line-Item, Performance, And Program Styles Of Budgeting
There are different types of budgets. The three that I will be assessing are line item budgets, program budgets, and performance budgets. All three have strength and weaknesses.
One of the main strengths of a line item budget is that it is the most common and the simplest to read and prepare. With a line item budget, you can prepare the budget by evaluating expenditures from past years. This type of budget saves time and resources to prepare, as a lot of the information would be available from previous years. This budget may also be less work to defend as most of the expenditures are based on previous years.
One of the weaknesses of a line Item budget is that there may be a lack of analysis in the creation of the budget. If the budget worked well the previous year many organizations may not do an in-depth analysis. This could result in the organization accepting the status quo. This results in a spending rush which many police services refer to as March Madness. This is when departments unnecessarily spend unused money near the end of the fiscal year to ensure that the funds will not be clawed back the next year. When line item budgets grow, they may be open to scrutiny as it may appear excessive because there is no justification link to the increases.
Program Budget focus in the requirement to get the job. This type of budget can help determine if the job can be done with the finances available. Again, this type of budget has several strengths and weakness. This type of budget will help with prioritizing different areas of the budge and will assist in the planning and delivery of services. Program budget will help monitor assigned resources to a project in regards how they are used to meet the projects goals. This will help identify areas were cost savings can be made and identify were some areas may require more funding. Each project has its own budget which will help promote accountability for the police service.
Program budgets may require a lot of time and as it can take time to find to what exactly resource is needed. As this type of budget has several layers of administration that may govern the project it may be difficult to evaluate.
Performance budgets place the emphasis on the accomplishment rather than resources. As a result, a performance budget will be able to show a full view of which departments are performing and which ones are not meeting expectations. These budgets provide clear information that can be examined and understood by groups outside the police service. Performance budgeting is similar to program budgeting, the only difference is that id add ties expenditures to goal of each program. A performance budget will tie in the results with the funding. This means instead of estimating; the budget will combine the expected results and create the proposal for funding. The best thing about this type of budget is that it creates accountability for the police service. Funders and the public will know if you are meeting your expected goals and can track what improvements are made.
The problem is that not every aspect of policing has s definable metric. For example, a school resource officer is beneficial as they do not only deal with crime at the schools but are mentors to the children. The befit of having a School resource officer may not be able to be measures as some of the payoffs positive result of having a school resource office may not be observed tell several year later. This type of budget would not support risk taking and given that almost everything we do in police has some level of risk this would make difficult to support many decisions that have to be made in order for a police service to run efficiently. This budget is goal oriented which means you either meet your goal, or you don’t with this type of budget, this may cause problems. This may cause issues as you may be 95% to you goal but as you don’t reach you goal you failed. This could cause repercussions from the general public as well as the funders. Goals may seem easy to create on paper but with the uncertainty of police work them may be hard to meet in the real world. As a police service you are constantly dealing with changing dynamic such as employee retention injuries and call volume.
Performance budgets can be beneficial but could also be inefficient. Several factor would need to be assesses to determent if this type of budge is a good fit for your police service. Things like having the resource to implement this type of budget would be the biggest optical as many smaller police service have the management team wearing several hats within the police service and may not have the time to devoted to a budget that is labor intensive.
