A budget is a plan for financing an enterprise or government during a definite period, which is prepared and submitted by a responsible executive to a representative body (or other duly constituted agent) whose approval and authorization are necessary before the plan may be executed. In the case of Uganda, it is a financing plan for one year prepared by the president and approved by Parliament. Some scholars have argued that budgets are a waste of time and valuable resources.
But this statement is not entirely true as the budget process has some very useful roles in public administration as shown below;- Financial control. Government needs to be able to exercise control over the ministries and departs – i. e. to make sure that the ministries are keeping to plan and that necessary actions can be taken to put them back on track when needed. Government needs to have control tools to make sure that financial plans and targets are being achieved, and the best tool is the budget.
The budget is a plan set out in numbers, which enables the government to exercise control. The difference between what is budgeted to happen and what actually happens is termed a variance. A favorable variance means that ministry or department is doing well while an adverse variance shows those that are not. Allocation of scarce resources. One of the biggest tasks of government is the allocation of scare resources. This is often done through the budget. Resource allocation refers to the distribution of resources, and in particular finance, from the center to peripheral levels.
Because the budgetary process is often participatory, it enable the various ministries and local governments to identify their needs and present them to the centre. Programme Coordination. The budget process serves very well to coordinate government departments and ministries. It is at this budget process that the government can get to know who is doing what and at what cost. Government can for example be able to tell that water for irrigation has been covered under the Ministry of Agriculture and should therefore be omitted from the Ministry of Water and Environment.
Communication. The public budget serves as a communication tool to a variety of audiences. The general public, civil society, and legislators all receive information from the budget process. Once the budget has been approved by the legislature and signed into law, the ministries and other agencies become the information recipients. Importantly, each of these actors perceives the budget differently. Budget also communicates upwards. Ministries and various agencies must prepare a budget that persuades the president that they support him and his manifesto.
At this level of the process, the information in the budget document must explain why a program deserves continued support, how it meets the president’s policy priorities, and how well it is using the resources it has been given. After a ministry budget has been incorporated into the national budget the primary audience for communicating information shifts from the executive to the legislative branch of government. The primary goal at this stage is to provide information to legislature with the recommendations and analysis that serve as the basis for their decisions.
Perhaps the most important purpose for public budgeting is to communicate a ministry’s intentions and performance to the citizens. The media also plays a major role in presenting budgets to the citizens. The key events in the budget processes and budget documents must serve to support a mass communication task. Successful communication helps to build legitimacy for the government and its programs. Budgeting as a Governing Tool. Public budgeting has become an increasingly central galvanizing force for both the administrative and policy side of governance.
This process begins with the preparation of program-level, agency-level, and then ministry-level requests for the coming fiscal year. This budget process presents a political platform for the selection of policy choices and for the allocation of resources to support those choices. The development of a national budget provides the foundation from which to organize a coordinated response to these complex problems and needs. Financial Accountability. Reflecting its roots, the budget process provides the tools to ensure financial accountability.
Legislative oversight and audit functions are important activities that provide an opportunity for ministries to demonstrate that they have complied with legislative directives. This compliance provides assurances to both elected officials and to the public that the ministry and its programs are serving the public interest. Influence on the Economy . The spending and taxation policies of the central government and local governments have economic impact. Of course, the central government, with its sh11 trillion for 2012/2013 has far more impact on the economy than billions the local governments spend.
From an economist’s point of view, the budget serves the following combination of economic objectives: * funds social service programs for those in need, thus increasing the demand for private sector goods and services; * reflects tax policy that affects business and individuals; * reflects and funds the enforcement of commercial, transportation, land use and environmental regulations that affect the business climate; * funds education and other training programs that enhance the country’s human and economic resources; * funds routine purchases (like stationary) and capital projects (like Bujagali dam) that stimulate economic activity; * serves to redistribute wealth across the country’s residents; and * Supports the government as the largest single employer. Public Budgeting as Political tool. The budget process presents a series of opportunities for elected officials and interest groups. The perspectives and needs of elected officials and interest groups may frequently contrast with the values and hopes of most public administrators.
Understanding these contrasting needs is a useful key to understanding the budget process. Elected officials must respond to their constituent’s needs and demonstrate a record of leadership. MPs must demonstrate an ability to use government to solve problems in their constituencies. Survival of an MP rests on this ability. In contrast, civil servants often rely on public service and professional values to guide their sense of action and accomplishment. For example, at the ministry of finance, the minister (who is not elected) and budget analysts are primarily committed to acquiring the resources necessary to maintain the efficient and effective delivery of programs, not delivering on promises to constituents.
The budget process provides leadership opportunities to bridge and reconcile these competing perspectives. The promises of an election campaign must be quickly translated into policies and programs. Campaign goals and visions must be translated into legislation and directives that can reform and reorient the ministries. The budget also provides an opportunity for the executive to engage with the legislature. When executive and legislative branches are divided, compromise is usually necessary to meet the constitutional duty shared by the Executive and legislative branches i. e the president must present a budget to the legislature and the parliament is constitutionally required to enact a budget. Waste of time.
On many instances, however, budgets may appear of a waste of time when they are not adhered too. In Uganda for example, The Monitor newspaper reported that the budget for Sate House had jumped from Shs66. 1 billion approved in September last year to Shs204. 4 billion. On the day to day running, there always unforeseen consequences that governments have to cater for and often need extra resources beyond what is budgeted for. An example in Uganda was the Bududa landslides, In the US we have seen incidences such Hurricane Katrina that devastated New Orleans in 2005. But that is only a perception. Budgets play a very big role in public management and administration.