Introduction
The budgeting process in any organization involves the application of priority mechanisms and the establishment of policies with accountability as a primary objective. The use of a budget by the City of Dallas is to act as a control system that ensures that revenues are expensed in a financial plan that is established by the organization, following set guidelines by the federal government. A budget as a management tool exhibits itself on achieving the set goals through efficiency, by developing a clear platform for revenue generation and allocation of funds to various Dallas local government entities with projected income. The centerpiece behind budgeting revolves around planning as rationality in decision making. An analysis of the Dallas City Council budget as presented by the financial arm of the management brings forward a plan on how these considerations in the budgeting process are prioritized (Bhattacharyya, 2011).
The Dallas City Council tax revenues from sales are projected to rise by approximately 2.6 percent over FY 2011-2012 estimates, with the continued increase for the fiscal year 2012-2013 at a peak of $229. 9M. The Dallas City Council budget represents a fundamental aspect of instruments of control and accountability, and a communication device to the public to inform on how revenue is generated, investments carried, and sources of income for funding the proposed budget. It provides short-term and long-term budgetary policies and objectives for the fiscal year, comparing the projected and previous budget allocations and how they should be implemented. The budget also serves as a financial plan for the effective implementation of prioritized goals and objectives, based on service delivery to the public and the projected income generation and expenditure for the entity itself. The Dallas City Council outlines a clear financial budgetary plan for the fiscal year 2012-13. The budget analysis herein constitutes an in-depth evaluation of the Dallas City Council budget document on the basis of the budget as a policy document, financial plan, an operations guide, and a communications device (Clinton & Van, 2006).
The Budget as a policy document
As outlined in the budget, the Dallas council government projects an improvement in the economic situation over the fiscal year accelerated by evident construction activities within Dallas city. The budget provides the principles that would guide it in the whole process of implementation. Key principles include maintaining the city’s commitment to public safety while living within its financial revenues and possible means, putting more focus on the management of the municipality on fundamental services such as developing revenue recovery measures and investing in the infrastructure of the city with economic projects that would raise the tax base to sizeable package. The Dallas City government budget objectives were to restore and maintain service levels to the public, restorative and maintenance of the city road networks, develop a plan to restore permits on building construction inspection, restore the pay cuts within the management, strengthen the compensation package for the workforce, implement policies on the cost of government expenditure, maintain adequate financial reserves and enhance capital growth for the city. The budget developed an implementation plan by considering the measurement of the proposed policies with the global economic crisis especially in the European Union, citing the relationship with the U.S. The short-term goals elicited the need to develop a sound financial approach (Dearden, 2010).
The Dallas government developed clear and a well set out budget process with various phases and steps to ensure that it addressed all the fundamental issues relating to budgeting. The process was divided into key phases which included preparing the budget where it started in October, with the Council setting goals into service categories with preliminary projections done in January to allocate funds for key focus areas. Here, biding was done and overseen by city management and the Central Budget Office. Budget reviews were done in May with draft versions being presented to the public. Changes were executed in early September, where the Budget Amendment Workshop was conducted to incorporate all amendments. Adoption of the budget during the first reading was done in September, followed by full adoption pursuant to the second and last reading. The Dallas government budget documents contained credible and comprehensive information regarding its priorities and objectives. The budget conforms to GFOA criteria concerning the budget as a policy and it also explains how it reached certain amendments and why they had to be affected (Dutta, 2003).
Budget as a financial plan
The Dallas City government budget includes information concerning major revenue sources listed as property taxes. Tax collection was approximated to be about 97.43% of the levy, generating U.S dollars 443,447,662. Ambulance revenues generated by the Dallas Fire Department would contribute immensely to the budget. Sanitation services revenue, private disposal revenue, franchise fee revenue, municipal courts revenue, sales tax, security alarm permit fee, and other sources of revenues are clearly outlined, and mechanisms of collection. It also outlines clearly expenditure areas during the fiscal year and discusses contingency planning on debt management. The Dallas budget conforms to the GFOA criteria as a financial plan document (Ethics Scoreboard, 2006).
Budget as an operational guide
A budget should provide the structure of the city government so as to help the citizens understand the command chain and get access to the appropriate agents. Such an organizational chart should include a summary of the personnel and highlight the structural and functional organization of the government. The Dallas City Council clearly outlines the personnel with their functions, such as the City Attorney, City Secretary, City Manager, Auditor, and the Judicial arm of the council. The personnel with their listed duties and responsibilities are well outlined. The organizational chart does not outline any future changes, objective performance measures, and timetables, hence there is no comparison of results on responsibilities bestowed on the workforce.
Budget as a communication device
The Dallas budget is presented in a simple way that a layman can understand. It is organized with a table of contents that shows all the chapter titles and pages in the budget document. This allows the different categories of citizens based on their educational levels to locate the desired data from the budget document. The document uses simple understandable graphs that can be easily comprehended. The document also clearly outlines the phases for preparing, reviewing, and adopting the budget. It also provides the necessary information on amendments made, hence the citizens’ ease of access and understanding of the budget process. In its executive summary, the Dallas budget provides the economic trends for the city. It also incorporates the use of a glossary of key terms to facilitate understanding. The budget provides other important financial information on financial management performance criteria that would be implemented by the council.
References
Bhattacharyya, D. (2011). Management Accounting. New Delhi: Pearson Education India.
Clinton, B. D., & Van, A. (2006). Management Accounting – Approaches, Techniques, and Management Processes. New York: Thomas Reuters RIA Group.
Dearden, J. (2010). Cost and budget analysis. New Jersey: Prentice-Hall.
Dutta, J. (2003). Cost Accounting: Principles And Practice. New Delhi: Pearson Education India.
Ethics Scoreboard. (2006). Accounting Ethics in Business. Ethics Journal, 10 (4), 5-6.