Budgeting with public money

How many of us have:

• worked for a boss that gloms onto the newest technology? This technology could improve productivity, except the boss is not part of the production line.  So while the boss is away the technology sits idle. sacrificed  because “it is not in the budget” and then watched as a new suite of furniture replaces old furniture in another office?
• watched as new initiatives are started while basic services are abandoned

The budget process is basically:

Step one: identify all your “to do’s”, needs and wants.

Step two: create list one = priority = funded and list two = non-essential = not funded

Assumption: the budget process supports the core business

Challenge: trim the fat while enabling muscle building

The public sector operates on a limited budget. The overall budget is created by politicians. The assignment of dollars to departments and their constituent cells is based on the squeaky wheel syndrome.   In the private sector you work harder, more efficiently, or learn new technologies to improve the corporate bottom line. In the public sector this effort tends to increase scope, reduce staff or reduce next year’s budget.

Although creating a budget starts with a foundational philosophy, each level in an organization tends to develop singular priorities, sometimes shifting items from the non-essential list to the priority list. With a mindset that requires spending all one year’s budget an inventive manager will also create uses for all of their budget allowance. This is especially common at the end of a budget cycle.

The financial psychopath is someone who:

• says “you really need more help”, or “we really need to add equipment” while they can find money for corporate non-essential items (new furniture, capital improvements, conferences, etc...)
• ignores corporate needs within the budget assigned to them and treats it as their own money
• regularly shifts items from the corporate non-essential list to their own priority lisy
• values power and prestige over corporate productivity

The language of the financial psychopath:

•  “it isn`t in the budget“ = “I am more important than our core business”
• “I have money in my budget for *corporate non-essential item* = “I always pad my budget request” or “really this is my money, I’ll spend it how I wish”

Budgeting in a time of scarcity requires:

• placing a higher value on corporate needs than individual or political wants
• making decisions that support the core business of the organization
• decisions that support productivity not power and prestige
• sacrificing the power interests in the organization

So is it ever appropriate to consider government or quasi-government groups to in any situation other than one of scarcity?

How many of us have heard a public sector executive say "after all I am the head of a multi-million dollar corporation" - public sector groups don't manage income, they only manage spending.