Describe how each spending source would be forecasted and tracked in the budget
accounting system. Distinguish between increasing revenue by raising taxes, cutting
other services and programs to divert that funding to transportation issues
The Government budget processes in the US and the legal requirements are found in the Budget
Act and implemented by the agencies financial officers under the Chief Financial Officers Act of
1990, (CFO, 1990) Public law 101-576, which emphasizes the federal management and the
accountability. Some of the provisions are also found in the Commonwealth Authorities and
Companies Act of the same year and also known as the CAC Act. The public officers are
required under the CFO Act to manage all the financial affairs of the agencies that they are in
charge of in a way that promotes efficient, ethical and effective utilization of resources.
Managing budget accountability involves prudent assignment of each budget allocation to a
responsible and accountable officer whose responsibility and authority rests with the allocated
items in the budget.
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The budgetary allocations should be aligned with the output and also the program structures that
are additional to the organizational structures like the cost centers. The budgeted items that have
been allocated to an officer whose responsibility lies with the items should also be allowed
access to all the financial information regarding the impact of his decisions on the full costs of
the goods and the services that are associated with his decisions. The balance sheets and other
financial information should be availed to the accountable officer to analyze his decisions.
The utilization of the $100 million DOT would be analyzed and evaluated through an integrated
internal budget accountability system that has been assigned to a particular officer considering
that the officer is responsible for the budgetary allocation and its effective and efficient
utilization of the allocated resources. Clear and articulated budget responsibilities for all
financial and operational managers ensure that responsibilities are clearly and widely understood.
The most critical factor to consider is whether the organization allocates all the components of
the budget to a single manager or if it retains some responsibility centrally by other senior
managers. The officers in charge of the DOT funds should be held accountable to that portion of
the budget which they control and also should be limited to that portion that they have the
authority to make decisions, allocate resources and commit the agency to a legal course.
Accountability is greatly enhanced when there is consistency in budget allocation and the
agencies financial management and control framework and particularly the delegation of
authority framework. (Department of Finance and Administration, 2002) Budget accountability
should be included in the responsible officer’s performance agreement. The responsibility for the
overall underlying budget sources and the assumptions made for example the standard costing
3 Manage Budget Accountability
system, should be assigned clearly by the agency to ensure that the data is reliable and up to date.
An effective and efficient internal budget structure assists most managers to plan and measure
the performance and implementation of each responsibility with clear understanding and
commitments to the agencies goals. (JCPAA, 2002)
The diverted funds that were utilized to develop the five year interstate freeway from the local
county highway must have received the appropriate approval from the federal authorizing
officer. It’s mostly against the US Budget Act and the commonwealths Financial Management
and the Accountability Act of the year 1997. (FMA, 1997)
Cost benefit analysis is the overall processes of assisting managers make the right choices
between different available strategies. The evaluation and analysis of costs and the associated or
the perceived benefits that are connected to each alternative qualifies them as the factors to be
considered when making the appropriate decision to use certain strategies or not. The primary
focus of cost benefit analysis is mostly the determination of economic efficiency.
The federal agencies could introduce such levies as application fees for driver’s licences besides
the normal charges to obtain the licences. Others may also be introduced in various government
offices such as relocation fees, change of physical addresses and other forms of taxes to obtain
federal tenders and other business opportunities. . (Osborne & Hutchinson, 2004)
Public managers have to reinforce their decision making processes and performances by clearly
identifying, establishing and implementing their strategic aims and performance measures that
form the basic foundation of accountability. Budget accountability entails several processes of
performance analysis and consistency. Budget accountability ensures that the successes and the
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failures of the budgeting processes cannot be either under or overstated. Accountability also
builds up the evidence that’s required for its feedback system.
The inherent nature of the political processes involved in resource allocation makes it a major
offence in accountability options to implement projects or to direct funds to programs that have
not been approved. The budget accounts and the various activities that make up the structure of
budgetary accountability and management must ensure that all agencies officials implements the
budgets as per the allocations agreed upon by the public officials during the budget process. The
agencies may track and monitor the use of lump sum budgeting of funds but the primary focus
remains in the implementation of the approved programs and operations in the budget process.
The agencies may get the necessary approval to increase taxes to fund their new projects but they
are not allowed to channel funds to other projects that have not been approved.
The presentations of federal budget process have over time developed to reflect several
orientations that oscillate around defined objects of expenditure, operations and the performance
goals. These budgets that are commonly based on their orientations with the objects of
expenditures are mostly referred to as the line item budgets. Program budgets are program
oriented budgets while performance based budgets are those that are oriented and tied to their
To conclude, in order to sustain budgetary accountability, it’s generally prudent to devolve all
the key elements of the budget which include the operational balance sheet to the managers who
are in control or are in charge of the element in the budget. The degree or rate of the devolution
should be consistent, and a clear framework for defining the budget choices in terms of
performance have led to significant debates on the frustration of the public oversight and the
5 Manage Budget Accountability
transparency of the budget structures. It’s very difficult to provide transparency when the public
cannot readily understand how resources are allocated to related operations when their basic
structures are so profoundly different. For example the federal food safety for instance is divided
among 15 federal agencies that are very different in their basic budget structures and other
accountability standards. The inadequate structures that are not consistent across the federal
establishments as the foundation for budgeting purposes are the barriers to a clear understanding
and tracking activities. Without a consistent and uniform unit of analysis across the different
agencies and bureaus, it’s difficult to compare related programs.
Chief Financial Officers Act of 1990, (CFO, Public law 101-576) and the US Budget Act
Department of Finance and Administration (2002), Budget Estimates and Framework Review,
Canberra. The aim of the review was to assess the accuracy, responsiveness and
effectiveness of the budget estimates and advice system in meeting the requirements of
FMA (1997) The legislative framework underpinning the external budgeting process is contained
in the Constitution; the charter of Budget Honesty Act 1998; the annual appropriation
Acts, the Financial Management and Accountability Act 1997; and the commonwealth
Authorities and Companies Act 1997.
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Joint Committee of Public Accounts and Audit (2002) Report 388 (JCPAA). Review of the
Accrual Budget Documentation, p. 12
Osborne, D. & Hutchinson, P. (2004) The Price of Government, New York, Basic Books.