V. O. Key tried to challenge economist with their basic budgeting problems especially as they faced with budgeting problems. Limited resources were a major factor facing those making budgets and Key asked the question of “On what basis shall it be decided to allocate x dollars to activity A instead of activity B”?
Several attempts have been made to answer the question posed by Key. One answer first installed by the Department of Defense during the Kennedy Administration was Planning Programming Budgeting System (Shafritz & Hyde, 2017). This idea represented the height of rationality for the budget processes in which this theory was derived from the concerns for accountability and control which were the hallmark for the line-item budget, to performance budgeting with the emphasis on managerial efficiency (Shafritz & Hyde, 2017). PPBS stressed objectives, planning, and program effectiveness. It wanted to take the spotlight off the off agencies and put it on the programs. It was more less a combination of the next two thoughts of budgeting, Line Item and Program.
Line Item budgets some argue is the simplest type. It was the first type of budgeting process that gained leverage and acceptance and placed emphasis on control (Milakovich & Gordon, 2013). These were used to present detail so that the spending could be closely monitored, and the smallest of details was shown throughout the system.
Program budgeting is used to put a financial plan into place that is backed through funding for an individual program. This type of budget includes expenses and revenues related to a specific project only. No revenues or expenses of any other project are mixed with this project.
Performance related budgeting looked at what programs could be funded, and how would the programs that were chose to be funded could in the end benefit parties involved. It was geared to promoting effective management of government programs in a time of growing programmatic complexity (Milakovich and Gordon, 2013). One problem that was noted that this budget could determine efficiency but did notaccount for effectiveness.
Zero based budgeting [ZBB] was first developed by Peter Pyhrr who developed it for Texas Instruments, and the state of Georgia while Carter was the governor (Shafritz & Hyde, 2017). ZBB’s advantages was that it provided for flexible budgets, focused operations, and you started from scratch each year. Disadvantages included the fact that this budget process was resource extensive, shooting for short term goals if you had a manager that was smart enough to use the ZBB to his favor.
Charles Levine stated that organizations needed to adapt and alter their strategies in an article he wrote in 1978 where he introduced the rules for “cutback” management (Shafritz & Hyde, 2007). He said that decided to make cuts is a test of management intelligence and courage. Make cuts based on equity is easier for manager because it is socially acceptable and easier to justify, and “Sharing the pain” appeals to the commonsense ideals.
The budget process that would affect public administration to me is the priority-based budgeting. Through this budget we can look at poor economic conditions and allocate monies where the priorities rest. I feel this would be less influential from a political figure because the public can see and express their priorities.
The Bible speaks about applying wisdom to revenues and expenses when it states in Psalms 90:12 (King James Version [KJV]): So teach us to number our days, that we may apply our hearts unto wisdom. The proverbial oracles of our parsimonious ancestors have informed us that the fatal waste of fortune is by small expenses, by the profusion of sums too little singly to alarm our caution, and which we never suffer ourselves to consider together. Of the same kind is prodigality of life: he that hopes to look back hereafter with satisfaction upon past years, must learn to know the present value of single minutes, and endeavor to let no particle of time fall useless to the ground. An Italian philosopher expressed in his motto that time was his estate; an estate, indeed, that will produce nothing without cultivation, but will always abundantly repay the labors of industry, and satisfy the most extensive desires, if no part of it be suffered to lie waste by negligence, to be overrun by noxious plants, or laid out for show rather than for use.
Shafritz, J. & Hyde, A. (2017). Classics of public administration. Boston, MA: Cengage Learning.
Milakovich, M. E., & Gordon, G. J. (2013). Public administration in America (11th ed.). Boston, MA: Wadsworth/Cengage Learning.
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