Learning Objectives

In your Financial Management class, you talked about budgeting at length. Setting a budget is just like setting a goal, except it is a financial one. As you read through this chapter, consider the role of leaders (even if they aren't the financial manager) in setting financial goals for an organization, whether in the private or public sector.

After reading this chapter, you should:

Recognize the key components of a public organization's budget timeline/calendar and formal/legal budget process.
Know the typical sources of conflict and compromise in the budgeting process.
Recognize the many different ways that we define "budget balance" and implications of those various definitions.
Recognize that budgets ensure fiscal accountability, but do not guarantee financial solvency
Know the basic strategies managers use to expand their budget authority or respond to potential cuts.
Acknowledge the effectiveness of "doing nothing" as a budget-cutting strategy.
Recognize when and why an organization's budget for a service might be quite different from what that service costs.

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