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Robert Brown

Digital Advisor,

TEDCRED 200+

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How can we fix the budget process?

How can we fix the budget process?
An entity requests a budget to deliver a product or service. It may be approved but in my experience they are never given what they ask for and it is usually reduced by some amount. This reduction forces the entity to adjust their ability to deliver based on the allocated budget.
1. Do entities ever offer up an inflated budget to get what they really need? If so, how do we identify an inflated budget?
2. If the entity doesn't spend their entire budget should shareholders, investors or taxpayers get a rebate?
3. What if the entity was innovative and delivered cheaper/faster/better? Should the entity be rewarded for saving budget dollars? Should it be handled differently if the entity is public, private, corporation, non-profit, government etc...?

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    Oct 14 2013: RB, First we have to establish that there is a budget and a consequence for exceeding it or a reward for coming in under ... that usually incurs a punishment.

    I have retired from state and federal government and also from Industry. As a supervisor, facilities, and capital assets manager I can tell you that there are only punishments and no rewards ...

    At the state and federal level you are playing with other peoples money ... the citizens. Almost always when you exceed ... or fail to manage .... you ask for and are granted a override. I have never seen a public employee punished for missing their target budget ... thus no accountability. It does however inspire creative bookkeeping, illegal movement across fenced lines, .... and plain ole cheatin.

    to answer questions 1 thru 3 above:

    1) There are models for almost every project. Most models allow for base cost plus 10%.
    2) Again there are models available .. when a entity demonstrates efficiency, effectiveness, and employs cost saving techniques they deserve the profits. The contracting agency should learn from the methods employed and evaluate the model for changes.
    3) Three is really no different than two. A contract is a contract regardless of who gives or receives it. The basic problems exist in how contracts are written, tax laws, federal regulations and policies, and, regretfully, Political kickbacks to those in power and those who are in the loop.

    Laws MUST apply to all citizens. As an example we send citizens to prison for insider trading and yet Nancy Pelosi who is casting a deciding vote that will make Visa stocks jump or fall, makes a large block purchase of the stock and then casts her vote making millions. That is criminal, unethical, and everything bad in the business world ... however for a Senator it is legal .. only those they govern over go to jail for the same acts. Opting out should not be allowed.

    Role models should begin at the top. That's a start. Bob.

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