Municipal Budget: A Contract Between Citizens & Government - Essay Sample

Introduction

The municipal budget is not just about numbers but is a binding contract between citizens and those in charge of the government. The community expects funds' allocation on its budget to translate into projects and social amenities on the ground. A budget should, therefore, be improved yearly with interest in providing citizens with actionable resource planning programs. It is unfortunate that line-budgeting technique that has been used in our municipality has not served the citizens to their expectation. I, therefore, made some recommendations that should be improved for the coming budget period. Best budgeting practices are challenging to put in action, but it is my duty to ensure that a good percentage of these recommended actions should be fulfilled for the goodness of service delivery to citizens. One weakness that I will try to eliminate with line budgeting is its inability to document all its data and flow of expenditure.

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Public Participation in Public Budgets to Improve Transparency

While a standard line-item budget is relatively easy to prepare, allocate funds, and monitor past, present and future expenditures, it may not be the best budgeting method for civic administration. Traditionally, the line-item budget system works best in a bureaucracy where departments are allocated a fixed amount of money to utilize for specific goals within a set time frame (De Jong, van Beek, & Posthumus, 2013). Line budget system is excellent for dispersing money to departments, but in its decentralization, there arise problems with oversight and monitoring exact use of funds. The major disadvantage of standard line budget is it relies too much on the human sense of honor to be implemented effectively; but fails as it is susceptible to human greed, mismanagement, and corruption.

The reason why there is employment unrest is that line budget fails to provide room for justification. Transparency is key in managing city municipality,that is why it is necessary to include the public when formulating a budget. Transparency improves trust from both the public and municipal employees (De jong et al., 2013). Line item budgeting naturally does not include municipal expenses. It, therefore, gives room for manipulation and misstatements. Good public participation in budget making is an excellent way to ensure that the municipality is held accountable for their community. People would be convinced of the service provided to them if they were part of the team making the budget. Transparency is a key part of budgeting. Line budgeting techniques denies transparency that is why it is necessary as the head of the municipality to introduce changes to the budget by ensuring public participation.

Trust and credibility within the municipality improve only if the management at the municipal is transparent on all their expenses. Currently, the methods of public participation have changed, unlike the traditional ways where the public only voted and took part in politics. The municipal management should open avenues where the public can share policies and ideas on how public funds should be used in infrastructure developments. The public can lobby and use media to share ideas on policies. It is also recommended that the public oversees procedures and point out areas where their issues have not been addressed to push for changes to be made if needed. Information will be provided to the public in formats that best understandable to them. All stages will have different methods of passing the information on budgets such as newsletters, public notices, public hearings, reports, and individual contacts such as emails and phone calls.

Introduction of Performance Budgeting

The use of line budgeting has denied municipal budgeting as a process; instead, it is just an outcome with flaws. It is therefore recommended that changes be made in the coming financial period whereby multiple accountabilities are set up to produce a performance budget. Since my municipality believes in democracy, then it is essential to allow for internal and external auditors to carry out analysis of how budgeted money was utilized. Public finance officers in my municipality might be opposed to financial accountability, but I think it is the only best option through which the public can trust the government of the municipality. Performance budgeting is the way through which the municipal can develop programs that provide methods that are only oriented towards service delivery (Bleyen, Lombaert & Bouckaert, 2015). The public has been complaining about poor infrastructure, and the reason could be that our budget-line technique is not service-oriented. Since I am the manager, I am tasked with taking full responsibility on inputs and outputs of budget funds; therefore, close supervision on my team is recommended.

Approach on budget allocation will be based on efficient and effective operational use. Public desires will be looked into as a priority to ensure that they get the required services. Improvement of budget-line method will require the inclusion of usable trend data in order to make it easy for the public to make a comparison of current and proposed expenses. Presenting a budget in a trend analysis provides an idea on best performing departments. Performance indicator will help in putting off municipal officials who might decide on misusing funds. The municipal budget document should be able to meet readers' desires at any time. An average citizen in local municipal would not want jargon information rather straight, and concise information will make them understand progress on funds usage hence preventing cases of unrests and demonstrations. All information in the budget will be anticipatory. Questions from the public will be answered in a narrative form in order to increase understanding with the public.

A mid-sized municipality relying on the standard line item budget hence faces the problems of insufficient follow-up to how the departments use money. When introducing a change that affects tens of thousands of people or even more, traditional methods have to be modified where they are inconsistent. Adding radical new systems with immediate effect is a mistake because the people tasked with implementing it will have doubts. Secondly, a new budgeting system that sounds too complicated to explain will fail (McTaggart & O'Flynn, 2015). Hence, a manager in charge of finance in the municipality has to consider how a modified budget system will be welcome by the employees. In the mid-sized district, already the employment unrest, budget overruns, and other problems show that the current budget method is failing. The manager first has to handle the employees and administration officials by giving the numbers and figures: how much money is lost by overruns? What infrastructure is suffering, and for how long? After getting the numbers and statistics, the manager should then invite the employees to give their opinions.

Oversight problems are the first problem of standard line item budget systems. In every municipality, there are laws and procedures. If there is a budget for the supply of goods, there is a payment receipt to show the transaction, and there are goods or services. The officials in charge of such procurement must document all the transactions. The first question to ask is the transactions documented as required by law and practice? There are cases where documentation is absent; the managers should root out all the instances where records are missing and fire the employees responsible. Firing a few people might be a drastic measure, but ultimately it sets a good example and a warning for the future that budget and procurement procedures have to be followed and documented. The best way forward for a public administration unit whose primary function is to deliver services to residents is a Zero-Based Budgeting (ZBB) system.

Zero Based Budgeting

Zero-based budgeting is a form of budgeting, where all the expenses start from a baseline of zero (Glass, Stefanova, & Prinzivalli, 2014). Unlike in traditional line item where costs are based off the previous financial year. In zero-based budgeting, every item on the budget has to be delivered within a given time frame. For example, if the budget is for six departments in a municipality, then each department is allocated funds to accomplish goals within a set time-frame such as two months, four months, and so on. The funds released are precisely enough to achieve milestones for the set duration. It is only after the goal is made that more money is released to achieve other milestones. Hence zero-based budgeting is more advantageous than traditional line item because the time frame for deliverables is cut down into smaller portions to make it easier for oversight.

In zero-based budgeting, there is no room for budget overruns, if by the deadline the deliverables have not been achieved then the manager may take stern action such as employee layoffs and termination of a contract. The fact that zero-based budgeting is rigid makes it very hard for mediocrity on the people tasked with implementing budget activities. Zero-based budgeting encourages frugality, which citizens and residents of a mid-sized municipality will surely appreciate. Before any amount is released, there must be an achieved milestone. Corruption is minimized with zero-based budgeting. Zero-based budgeting is more technical rather than accounting-based.

While in traditional budgeting, discussions, and plans revolve around how funds are used, zero-based budgeting is more of how projects are feasible. For example, if there is a proposal for a road expansion the question in zero-based budgeting is how road accessibility will help farmers get their products to market or how motorists will save time spent stuck on jams. The issues in traditional line-item budgeting would have been something like how much money is the contractor to be paid and what businesses might be impacted. In public administration, consideration should always be first and foremost on improving people's lives before cold accounting figures.

Another advantage of zero-based budgeting is the reliance on technical staff to make decisions. Managers may be chosen from technical personnel- like a career doctor being made in charge of health care rather than a public administration official. There are many departments in a municipal government: the manager in charge of all of them must realize that each department is unique and some functions especially decision-making, have to change from the traditional top-down approach. Professionals making major decisions consider other factors that public administration managers might never have. Alternatively, if management is not flexible enough to give professional and technicians leeway in decision-making, then qualified people should occupy high positions like next to the executives. Zero-based budgeting makes it possible for the elevation of people based on performance.

Conclusion

One factor identified to be the reason for public outcry regarding budgeting is that the municipalities do not involve them in the budget-making process. Adopting transparency is the first step that will ensure that the public trusts the municipality government. Budgets should be justified and public not left out in how funds were spent. Documentation of all transactions within departments in the municipal has proved to be an essential procedure that reduces cases of misstatements. Employees should not be fired if they raise concerns regarding the expenditures of funds; instead, they should be brought on board with other stakeholders to provide solutions. I also recommended the adoption of zero-based budg...