Budget and Financial Management

The purpose of this assignment is to relate theoretical and applied concepts covered in the course to the budgeting and financial management practices of an actual state or local government in the United States. The project will proceed in several stages and at each stage you will have detailed instructions about the required analysis and how it relates to the class material.

Step 1. Budget Analysis Project Proposal (due on Blackboard on September 19, 2018) You need to identify a US state or local government (city or county) for this project. The proposal will list the government unit, your reason for selecting it, and a list of references, including the links to the document listed below. Budget (proposed budget) Capital budget (if it is a separate document) Comprehensive Annual Financial Report (CAFR) Make sure that you have the complete title of the documents and the correct link for each document. I will review each proposal, including accessing all documents via the links and making sure that you have all necessary information to complete the project. Your submission on Blackboard has to be a Microsoft Word file with the contents listed above.

Step 2. Budget Analysis Draft By this point in the semester you will be ready to use the budget documents to analyze the budget system and the revenue mix, as well as assess trends and prepare simple forecasts for revenues and expenditures. This constitutes a significant portion of your budget analysis and once completed, it will represent a draft of your budget analysis project. Your draft should address the following questions: 1) What is the fiscal year of your government unit? Do they use an annual or biennial budget? What type of budgeting system does your government unit use? What are the main program areas emphasized in the budget message? How are program outcomes measured? Have there been any recent budget reforms? What are the balanced budget requirements, if any? What are the main funds listed in the budget documents? For the following questions focus on the General Fund information. 2) What is the revenue mix for your government unit? Include the share of each revenue source, any historical changes available from the budget document, discussion of changes in revenue mix (if provided in the budget document). How diversified is the revenue mix? What would be some reasons for the observed mix of revenues? Are there any recent or pending tax reforms? Are there any tax and expenditure limitations imposed on your government? If yes, what is necessary to get a tax increase approved, for example legislative majority or voter referendum? 3) Is the budget prepared by the executive? What are the supporting office(s) to the executive? What forecasting methods are used for budget preparation? Who is involved in the forecasting process? 4) Using as much historical data as is available in your budget and financial documents (10 years usually in the CAFR, at least 5 years if the CAFR does not have 10 years in the Statistical Section), examine trends in revenues and expenditures in constant dollars (adjusted for inflation). Use total revenues and total expenditures, and 2-3 major revenues (excluding intergovernmental revenues) and expenditures. Are there any significant changes in the major sources of revenues and the major categories of expenditures?

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