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Types of Budgets Planning

Planning is an indispensable part of the process of managing any organization, a governmental organization in particular. Furthermore, to manage one, it is pivotal to create a budget of the organization or activity in question. A budget can be defined as a financial plan which includes items that need to be addressed, and the expenditures associated with these items (Henry, 2016). The current paper discusses three types of budgets: line item budgets, program budgets, and performance budgets. Their role in public administration is discussed, and examples of each of these types of budgets are provided.

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Line Item Budget

A line item budget is a budget that lists all the spending of an organization by classifying it according to the departments by which these expenditures were made or are to be made (Henry, 2016). It is also stated that a line item budget may provide a comparison between the financial data which was gathered over a number of budgeting or accounting periods in the past, and the data that assesses the expenditures which are to take place over the current or future budgeting or accounting periods (“Line Item Budget,” n.d.).

Therefore, it is rather simple to create an example of a line item budget. The following example provides an approximate budget for several departments of a university for a month; University of the Philippines Diliman (n.d.) was used as the basis for this example.

# Details Cost, USD
1. Department of Nuclear Physics  
A Administration 20,000.00
B Lecturers 250,000.00
C Laboratory Assistants 35,000.00
  TOTAL 305,000.00
2. Department of Optics  
A Administration 25,000.00
B Lecturers 320,000.00
C Laboratory Assistants 45,000.00
  TOTAL 390,000.00
  GRAND TOTAL 695,000.00

Program Budget

Program budgets provide a detailed account of all the activities and events which are to take place within the given period and require finances (Dropkin, Halpin, & La Touche, 2011). A program budget will describe all the operations for a given program, possibly listing all the necessary resources, materials, etc., that are needed for it, along with their cost. This permits for an in-depth evaluation of the given program, its benefits and disadvantages. In public administration, program budgets allow for more adequately assessing the program or event in question.

A simple example of a program budget for a public lecture is provided below:

# Details Cost, USD
1. Renting an auditorium 500.00
2. Renting a microphone and speakers 50.00
3. Decorations (banner) 30.00
4. Honorarium for the lecturer 1000.00
5. Tea and coffee for participants 100.00
  TOTAL 1680.00

Performance Budget

A performance budget is a budget that includes the list of all the resources which are put into an activity, event, program, etc., and the list of the expected outcomes of that activity, event, or program (Kelly & Rivenbark, 2011). Such budgets may be of particular importance in public administration, for they permit for assessing the positive outcomes of a particular activity, and help ensure that the activity will actually bring benefit; they also stimulate individuals to work towards the established goals (“Performance Budget,” n.d.).

A very simple example of a performance budget for a study assessing the effectiveness of a type of training may be as follows:

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# Activity Units of Output Number of Units Unit Cost, USD Total Expected Cost, USD
1. Pre-assessment of participants Completed pre-assessment form 50 10.00 500.00
2. Training for participants Training hours 12 400.000 4,800.00
3. Post-assessment of participants Completed post-assessment form 50 10.00 500.00
  TOTAL       5,800.000

Conclusion

All in all, there exist several types of budgets, which reflect different features of the planned program, event, activity, etc. This allows for evaluating the programs, events, activities, etc. in question from different points of view. Being able to create and use different types of budgets is paramount in public administration, for an adequate assessment of an event or a program may help save plenty of resources and ensure beneficent outcomes.

References

Dropkin, M., Halpin, J., & La Touche, B. (2011). The budget-building book for nonprofits: A step-by-step guide for managers and boards. Hoboken, NJ: John Wiley & Sons.

Henry, N. (2016). Public administration and public affairs (12th ed.). New York, NY: Routledge.

Kelly, J. M., & Rivenbark, W. C. (2011). Performance budgeting for state and local government (2nd ed.). Armonk, NY: M.E. Sharpe, Inc.

Line item budget. (n.d.). 

Performance budget. (n.d.). Web.

University of the Philippines Diliman. (n.d.). Sample line-item budget. Web.

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