The economic downturn of the past several years has been devastating to local economies and, by extension, their local law enforcement agencies. According to a report by the National Institute of Justice, the United States is currently experiencing the 10th economic decline since World War II (Wiseman 2011). The impact of this downturn will result in a change of how law enforcement services are delivered.
As has been discussed by the COPS Office Director, Bernard Melekian, in a series of recent articles published in the Community Policing Dispatch, expectations will not be lowered just because an agency now has fewer officers, or because the budget is limited. Simply doing less while waiting for local budgets to recover to pre-2008 levels is not a viable option. Law enforcement leaders are faced with budget contractions that are in need to identified in different ways to deliver police services and, perhaps more importantly, articulate what the new public safety models will look like to their communities (Melekian 2011a).
The effects of the economic downturn on law enforcement agencies may be felt for the next 5–10 years, or worse, permanently. These changes could be permanently driven not just by the economy, but by local government officials who determined that allocating 30–50 percent of their general fund budgets for public safety costs is no longer a fiscal possibility (Melekian 2011b). While it appears that the economy is beginning to recover on the national level, most economists agree that local jurisdictions are still in decline and will continue to be so, at least in the short term.
Due to the decline of tax revenues because of Foreclosures County and municipal budgets tend lagging behind the general economy, which is one of the main source of funding for local agencies. Agencies are also faced with the budget realities, the current model for service delivery—which has been with us for the last 50 years—is already starting to change, and will be forced to continue to change dramatically and rapidly in the next 3–5 years. Police departments have been one of the affected by the current economic climate.
Restricting revenues nationwide have forced local governments to make cuts in spending across the board, which has affected everything to include public safety operating budgets. However, while these budget cuts are threatening law enforcement jobs the responsibility to serve and protect remain. There has been no methodical way of measuring the effect the economic downturn has had on police agencies across our nation. A good example is how Nigeria has been experiencing difficulties in Budget implementation.
The objective of the article was to present alternative forms of budgeting and after exposition on them, to recommend one that could mitigate budget implementation problem for Nigeria. Two types of budgeting addressed are incremental and zero-base. Under incremental budgeting, a certain percentage is added or subtracted from previous period’s figures to arrive at new period’s budget. Under zero bases, every program is reevaluated for its merits, as if previous budgets never existed. The starting points are the results hoped to achieve, and every debate about budget implementation is done prior to passage.
Zero base budgeting is analogous to marketing concept in terms of information requirement and zeroing in on customized needs. To the extent that zero base budgeting plans, executes and controls, it serves as a management tool. Nigeria’s budgeting has been incremental, overly politicized and not carried out by experts, but merely based on benchmark price and quota of daily oil production. Factors militating against proper budgeting in Nigeria are distortions in fiscal transparency. Budget implementation in Nigeria is a critical problem.
Many have blamed our poor socio-economic and infrastructural development on low degree of budget implementation, which is a result of incremental budgeting process. The paper therefore recommends zero based budgeting to Nigeria at all levels (GJSS, 2012). Sometimes inefficiencies result due to poor integration of the finance and strategy. “Budgeting and performance are typically overseen by the finance department, whereas planning s coordinated by strategy department. Often, the two processes aren’t well integrated,
resulting in strategies that are often dictated by the budget process instead of vice versa” (Gary 2003). The reason for this could be that everyone involved may be attempting to accomplish the same goals, but also trying to make sure that the outcome will be beneficial to them, such as a substantial bonus or a reward. A budget cycle refers to the whole process from the commencement of developing a budget to the execution of the final charge on the budget. Since the majority of the budgets are prepared for a one year period, budget cycles cover the costs and expenditures for a period of one year.
However, there are budget cycles that run for more than one year period. Government budgets have a budget cycle of at least 18 months from the conception of the various departments’ budgets to the time the appropriation bills are signed into law (Hyde, 2001). The initial steps of the budget cycle take place in the various departments and agencies. The program officers in the various departments compile all information that is necessary in the preparation of the budget. The budget cycle culminates with the president’s budget application to the Congress.
This often takes place in February (USDOJ, 2011). A budget refers to a list of premeditated revenues and expenses. It represents a tool for savings and expenditure. A budget can also be defined as an organizational plan that is stated in monetary terms. It is used as a road map for conducting the activities, objectives, assumptions, and strategies of an organization. A budget cycle is comprised of various stages. Budget planning for the new fiscal year marks the first step of the budget cycle, while closing and carry forward activities mark the end of a budget cycle (Hyde, 2001).
The steps outlined below are steps of a sample government’s budget cycle: Budget submissions: this entails the submission of the budget plans to the respective Budget Offers in various government departments. The budgets are reviewed and approved. Budget approval: this entails the executive committee approving the budget. The Initial Budget Authorizations are then submitted to the respective supervisors who address the respective cost items. Global Changes: the salaries are adjusted so that they reflect salary increases that are permitted by the Salary Subcommittee and the Human Resources Department.
Closing: this entails the closure of the budgets at the end of the fiscal year. Carry forwards: it entails carrying forward all the unspent money to the following fiscal year. This marks the last step in the budget cycle. In most instances, law enforcement management prepares master budget for the coming year. The master budget includes the projected expenses and maintenance which is incorporated in the master budget and other smaller budgets such as training, overtime, marketing, administrative, and departmental budgets.
By establishing an operating and financial budget for a future period, management can identify problems in advance. This can be maintained by forecasting for future predictions. A forecast is a reflection of the future. When forecasting is taken into account, two key aspects to consider are cash budgets and expenditure forecast. In most instances, budgets are and should be prepared for a future period such as an oncoming accounting or financial year. They are detailed by quarters or months. Typically, annual budgets are not altered once the year begins.
However, budgets should not be rigid so as to prevent timely actions if need arises. Instead, budgets should only act as a guide rather than a restriction. However, there are rare circumstances when an annual budget should be revised such as due to a radical change in the business environment. Budgets are also important for obtaining funding since they portray an organization’s capacity to the lending institutions and financiers. Additionally, budgets are important management tools, they aid in setting milestones that need accountability to achieve, and aid an organization in identifying risks and establishing benchmarks.
Thus, budgets facilitate the process of making adjustments to avoid risks, and to measure the benchmarks. Understanding the significance of budgeting marks the first step towards successful financial planning. It plays a significant role in the strategic planning process by an organization. It outlines the future financial goals and needs of an organization such as technological needs, overhead needs, financial requirements, and capital improvements. I have a very strong opinion that budgeting should not be scrapped, rather be modified to meet the current business environment.
Organizations would have to restructure compensation programs so that managers no longer have an incentive to favors short-term goals over the longer-term. Budgeting will have to be flexible to be able to be adjusted from time to time to reflect changes in organizational goals and the economic environment. Again, accounting department should be responsible for compiling only budget information; they should not determine the budgeting process. Management, through the planning process should determine the budget, and all departments should be included in the process. Budgeting should be both top down and bottom up; i.
e. upper level management and middle level management will both work to finalize a budget. We can streamline the budgeting process by developing a financial model. Financial models can facilitate “what if” analysis so we can assess decisions before they are made. This can dramatically improve the budgeting process. One of the biggest challenges within financial planning and budgeting is how do we make it value-added. Budgeting requires clear channels of communication, support from upper-level management, participation from various personnel, and predictive characteristics.
Budgeting should not strive for accuracy, but should strive to support the decision making process. If we focus too much on accuracy, we will end-up with a budgeting process that incurs time and costs in excess of the benefits derived. The challenge is to make financial planning a value-added activity that helps the organization achieve its strategic goals and objectives. In order for department to compensate for dwindling budget, many law enforcement officer have had to learn how to focus on what can they can sacrifice from their normal lifestyle in order to offset the reduction in available spending.
Some of these sacrifices have included families foregoing summer vacations, or shopping in discount stores instead of department stores they are accustomed too. However, today law enforcement agencies are faced with the difficult task of maintaining the same service that their communities expect despite the extreme reduction in available resources. And, in order for them to deliver the same high level of protection and emergency responsiveness that the communities depend on, law enforcement agencies must find new and inventive techniques to address those needs in cost-effective and maintainable way.
Agencies must have a good understanding of how budgeting marks the first step towards successful financial planning. Budgeting has a significant role in the strategic planning process by any organization. It provides the framework for future financial goals and the needs of an organization such as technical equipment like laptops, radios, and side arms. It also shows the overhead needs, and departmental financial requirements. It can also outline the costs involved in order to get the resources that are required to meet their financial goals. Developing a
budget is an important tool for determining the department’s performance, in motivating the upper-management, other members of staff, and measuring the results towards accomplishing the organization’s financial goal. References Gary, L (2003) Breaking the Budget Impasse. Pg 3, Retrieved September 30, 2013, Idio, U. S. (2012). THE BUDGET AS A MANAGEMENT TOOL: ZERO BASE BUDGETING, PANACEA TO BUDGET IMPLEMENTATION IN NIGERIA. Global Journal of Social Sciences, 11(1), 1-7. Retrieved from http://search. proquest. com/docview/1036581432? accountid=32521 http://www. cops. usdoj.
gov/files/RIC/Publications/e101113406_Economic%20Impact. pdf Melekian, B. , (2011a). Director’s Message. Community Policing Dispatch vol. 4, no. 3. http://cops. usdoj. gov/html/dispatch/03-2011/DirectorMessage. asp. Melekian, B. , (2011b). Director’s Column: July 2011. Community Policing Dispatch vol. 4, no. 7. http://cops. usdoj. gov/html/dispatch/07-2011/DirectorMessage. asp. Wiseman, J. , (2011). Strategic Cutback Management: Law Enforcement Leadership for Lean Times. Research for Practice, Washington, D. C. : U. S. Department of Justice, National Institute of Justice, NCJ 232077.