Introduction
Budgeting is an important process that ensures that expenditure is planned for to ensure proper planning. Creating an expenditure plan in a company ensures that funds are utilized properly for developmental purposes. Budgets determine whether a financial period will experience successful development or not. However, the budgeting process can become a problem to the management of a company or an organization due to the difficulties in determining the right approach to be used. Jacksonville police department requires a budget implementation that would cover budget cuts as required by the state. The police department will need to use one of the two budgeting approaches; zero-based budgeting and planning-programming budgeting.
Zero-Based Budgeting
In this budgeting approach, all the expenses have to be justified for every new period. During the preparation of the budget, the process starts from a zero base analyzing every expense. The expenses are determined by the needs of the company or organization.
Advantages of zero-based budgeting
It helps push managers into finding the most cost effective ways of improving operations. Managers will ensure that only the essential needs of the company are covered by the expenses.
Zero-based budgeting helps eliminate wastages. The amount allocated is specifically projected for a specific expense. There is no over budgeting and chances of misappropriation of funds.
It increases innovation since it provides a platform for decision making. Managers have to make informed decisions with regards to the expenses that would be given first priorities.
The process helps detect inflated budgets. Through zero-based budgeting, managers are able to detect where there are cases of inflated budgets.
Zero-budgeting also helps in identifying the available opportunities for outsourcing.
Disadvantages of zero-based budgeting
The process of preparing zero-based budgeting is time-consuming.
The process is requires training due to its complexity. Without training, zero-based budgeting would be a cumbersome process that the people encounter.
The process may be overwhelming in large organizations thus not efficient. The entire process of zero-based budgeting is long and overwhelming due to its requirements.
Planning-programming budgeting
The process is a management technique that provides a wide range of techniques that can be used in the planning and budgeting process. The process creates an important link between planning and budgeting in a company. Planning-programming budgeting can be considered as the traditional form of budgeting. Here, the budget is anchored upon the levels of accomplishment set by an organization.
Advantages
Preparation of the budget is time saving since most of the factors required have been covered. The budget is prepared based on the accomplishments that need to be achieved.
The budget provides the opportunity for wider target setting. Managers are allowed to set budgets that will achieve the company goals.
Planning-programming budgeting helps identify the major points of interest in an organization or company that needs extra funding. When financial managers create budget estimates, the management team of an organization is able to determine whether the amounts estimated are efficiently supplied among all the interested parties.
Disadvantages
The budget allows for misappropriations when a proper audit is not conducted.
The budget does not allow for inflated values which can lead to overwhelming of revenues.
The Drug Rehabilitation Program
The drug rehabilitation program of the Jacksonville Police Department works at ensuring that drug addicts are lead through a process of therapy that would help them recover from their addiction. The drug rehabilitation program would require a budget that will manage to service its operations. At the same time, the budget has to be lower that the initial year’s budget that was set up.
The process of zero-budgeting might take a long time to be implemented at the drug rehabilitation program due to the length of the process. Zero-budgeting can be implemented into the drug rehabilitation program to improve its program. The program can initiate the budget at zero and ensure that it sets up its priorities not allowing miscellaneous expenditures to appear as priorities. Planning for zero-budgeting will need a look at the various needs for the drug rehabilitation program. Zero-budgeting can be considered efficient and well organized as it ensures that all the expenditures are well documented and it is less likely for the amount allocated for the budget to be wasted through misappropriation (Touche, Opkin, & Halpin, 2013).
Planning-programming budgeting on the other hand can easily be implemented in the program. The process is simple and does not require a lot of skills. The program will need detailed evaluation into the needs of the rehabilitation center. To implement the budget, the program will require looking for a taskforce that will determine the needs of the rehabilitation center. The taskforce will enhance the development of a workable budget that will cover developmental growth and development goals. Planning-programming budgeting would work best in an environment where there is a huge amount set for development in the region (Owings & Kaplan, 2012).
The best process to be used for budgeting for the program is zero-budgeting which is lengthy but effective. The rehabilitation program needs to cut down costs which mean ensuring that all the funds required and used are fully utilized. There is a need to minimize incidents of wastage. Planning-programming budgeting is thus inefficient in planning for fixed budgets since it focuses on a wider scope. We can understand that, for a budgeting plan to experience a cut, there have to be a fixed budget preparation procedure that will ensure that all the other expenses are taken into consideration.
- Owings, W. A., & Kaplan, L. S. (2012). American public school finance. Belmont, Calif: Wadsworth.
- Touche, B. L., Opkin, M., & Halpin, J. (2013). The budget-building book for nonprofits: A step-by-step guide for managers and boards. San Francisco, Calif: Jossey-Bass.
- Yao, X., Turoff, M., & Hiltz, R. (2010, May). A field trial of a collaborative online scenario creation system for emergency management. In Proc. 7th International Conference on Information Systems for Crisis Response and Management (ISCRAM 2010).
