Public Administration has the mandate of implementing government policies. It has the responsibilities of educating the civil servants on the implementation of the policies involved in the government (Tyer & Willand, 1999). Budgeting is crucial for this body to enable efficient running of the systems in place. The management of funds is important in enabling the functions of the government. Public administration has been identified with management of the public programs (Curtatone, 2010). This is crucial, considering that the politics are converted to realities which are observable by the citizens. This paper will seek to analyze how budgeting in the public administration influences the operations of the municipal bodies. The research sufficiently uses the city of Somerville, Massachusetts as my case study.
Budgets address various purposes in the government. These includes control and management, enabling communications within constituencies, setting realistic goals, considering past successes, ensuring continuity of the public entity’s philosophy, and letting citizens know the functions of the various departments (Mikesell, 2012). Public administrations have the mandates of detecting and analyzing the fiscal conditions of the government entities by considering the budgets carefully. Public organization is heavily concerned about the ethical concerns of its employees (Curtatone, 2010).
Public servants who are not elected are considered to constitute the public administrators. Public administrators entail the heads of the cities, state heads, federal department’s heads, county heads, and regional heads (Gargan, 2007). They constitute the municipal budget directors, census managers, cabinet secretaries, city managers, human resource administrators, and state heads.
There are various approaches applied in the study of the public administration that enables an efficient administration of the budget timelines. The approaches listed are: systems approaches, structural functional approaches, behavioral approaches, ecological approaches, contingency approaches, and the public choice approaches (Mikesell, 2012). The budget maximizing model by Professor William Niskanen has been critical in budgeting of the public administration. He applied the Universalist approach in defining the public administration. The study indicated that the public officials tend to be motivated by the public interest considerations. This paper considers the municipal budget of the city of Somerville in Massachusetts (Curtatone, 2010). The city has the logo indicating that the municipal freedom gives the national highest strength. The mayor of Somerville city is called Joseph A. Curtatone.
The budget message did not present an adequate overview of the entity and the realistic financial position. Considering that the accounting method used in budgeting does not include expenses on personnel, travels, supplies and ERE, and considering that the mayor has presented this budget as the fourth program based budget, the staff related to the Somerstat office and the staff in the finance department spent tirelessness time in preparation of this budget.
The city department is broken down into major functional areas referred as the activities. Additional and key outputs are related to the activities of the broken down sections in the city framework. This has been changing with years depending on the pressing issues in place. Considering two thousand and nine, the cost per key output was related to the activities in the portions of the budget framework reflecting on ordinary maintenance budget and departments personal services (Curtatone, 2010). The budget for two thousand and ten indicated that the fiscal situation was volatile and did not enable effective cost analysis. This is the reason why the budget message did not present an adequate overview of the entity considering the financial position of the city. Budgeting is, therefore, a very important management tool, which help the firm or the municipality to evaluate its current economic position. Through the use of budget, the entity is able to efficiently decide on the viable investment with maximum gain.
The budget of Somerville continues to assert that as the fiscal condition becomes elaborate, the budget program will function as an analytic tool. This will allow the departments of the city to implement the goals set by the Somerville city in the allocation of resources. There are programs funded by the Boston Municipal Research Bureau that will enable Somerville city to realize its goals. ResiStat programme implementation will enable the city to produce budget timelines that are profoundly elaborate and systematic. This will enable the city to have a correspondence panel with the immediate environment clearly highlighting areas of improvement (Curtatone, 2010). This will enhance Somerville city in risk management, governance process, internal controls, protection of the city property, enabling an efficient youth commission and recreation activities, and providing high quality services to the residents of Somerville.
Information technology service area accounts for the biggest percentage in the operating budget. This is considering that Information Technology in Somerville city is committed to improve, maintain and deliver technology infrastructure to the city’s residents and its employees. The city believes that Information Technology will enhance proper management levels, enabling improved operations in the city. The city is committed to provide reliable telecommunications, systems foundation, and advanced data network (Curtatone, 2010). This will enhance improvements of the businesses in the city, enabling the city to compete with other cities in America and the world in general. Emerging and proven Information Technology services are subjected to the people of Somerville enabling enhanced lifestyle. Information Technology is believed to increase productivity and improve the overall services in Somerville city. This is critical for the growth of the city. The allocations for the Information Technology in twenty ten resonated with one million four hundred fifteen thousand three hundred seventy dollars. This was a big chunk of funds considering the department appropriations (Mikesell, 2010).
Within the Information Technology service area, the largest budget timeline indicated the launching of the website on open platform that incorporated comprehensive services of intranet for the staff of Somerville city. This has the responsibility of ensuring that the whole city has turned electronic, enabling easy and efficient communication (Curtatone, 2010). Communication is critical for the growth of the city. Proper communication supports advanced business processes; thus, enabling fast tract development of the city. A big chunk of the budget is accorded to maintenance of the Information Technology systems, as well advancing the Information Technology services.
The funds of Somerville city originates from the various sources. There is support from the American government, charter school tuitions, lottery, taxes from business operating in Somerville city, penalties, interest on excises and taxes, forfeits and fines, permits and licenses, fees and miscellaneous recurring. There are other sources of funds which resonate on interests on investments, free cash, rental of municipal premises, overlay surplus, transfers in meter receipts, payments of the development covenant, sale of vehicles, grants, water sewer rate relief, proceeds from premium bonds, capital stabilization, and funds from the indirect grants reimbursement. The funds differs in the amounts of revenues collected (Curtatone, 2010).
There is a separate capital budget and a separate capital improvement program. Capital budget indicates the investment appraisal in Somerville city. This is crucial in the planning process of the long term investment. Somerville city has budgets for long term development. This has been indicated by the accounting rates of return, internal rate of return, equivalent annuity, net present value, modified internal rate of return, and considering the profitability index.
Somerville city has planned outlays that entails the purchase and development of assets with the aim of generating more income and support the upcoming and established businesses processes (Curtatone, 2010). This is considered to constitute long term developments. Somerville has plans to expand the land, machineries, buildings and investments to other companies. This is critical in enabling long term sustenance (Mikesell, 2010). Capital improvement programme is considered to take a five year plan that addresses the future facility needs. This is critical in ensuring continuity over the years.
Capital improvement program in Somerville city addresses the requirements of accessing new facilities, renewals of the facilities that are existing, improvement of the infrastructure management, and addressing the needs of the other facilities in Somerville (Curtatone, 2010). This is critical in establishing the exact completion dates for the capital improvement programme, deepening on the status of the debt service limitations and cash flow in place. Supervisors have the mandates of ensuring that the projects are on time and that they are completed in the scheduled format. The programmes planned observe a five year plan.
The capital projects management in Somerville city is endeavored in constructing and designing critical city projects. This has necessitated the construction of the municipal building and the renovation of the existing building, so that it can be used for other purposes. City project management department has been credited with parks reconstruction, as well (Curtatone, 2010). The department works closely with other city departments in the attempt of developing and maintaining a comprehensive capital improvement plan that addresses the present developing and the anticipated developments. Taking an example, Somerville city managed to develop the Dr. Albert Argenzaiano School, which is situated in the Lincoln Park. This is one of the many developments that are taking place within the Somerville city. The city is able to efficiently use budgets to forecast and predict their revenues and expenses for future planning.
There are various revenues sources that the city relies on. The amounts of the revenues collected vary. The other revenue sources for the city entail on rental returns from the municipal investments, proceeds obtained from the bond premiums, sales of motor vehicles, interests on the investments in place, free cash, overlay surplus obtained from the previous years, and transfers of packaging meter receipts. Other sources of revenues indicate grants reimbursements, water sewer rate relief, development of covenant revenue, and indirect cost subsidies (Curtatone, 2010). This amounts to fifty-three point thirty-one percent of the total income.
There are indications of financial health in Somerville. The mission is entailed to providing highest possible public service that is consistent with the existing fiscal management (Curtatone, 2010). The financial health entity is considered to offer innovative programmes that enables Somerville city to offer effective administrative services to its residents. This is in accordance to the laws set aside in the city, state and the nation at large. The city is committed to providing a thriving economy, healthy community, safe environment, offer vibrant society, offer quality life, and encourage individual participation in the life of the government.
Somerville city is endeavored in offering a healthy environment that supports human life and business continuity (Curtatone, 2010). This will enable the city to reap maximum returns and, therefore, enabling track developments of the city projects. The healthy environment is considered possible by adoption of energy efficient initiatives and eco friendly policies. Somerville city is committed to offering comprehensive services to the community at large. This is mostly accorded to the senior citizens by offering support programmes.
Somerville city has been striving to maintain financial health; this has been possible by the city minimizing on its expenses and increasing its revenues. The city has managed to handle its debts considering the short and long term plans. This has been possible by Somerville city adapting the debt relief program, which has enabled the city to alter the financial behavior over the years (Curtatone, 2010). This has been crucial in enabling management of the finances. Somerville city has well established debt management service.
Financial dangers are evident in Somerville city. These are the signs that indicate potential thirst in the future, if not addressed to. Somerville city faced difficult times in the recession period, with majority of companies collapsing and other in the sheer blink of collapsing (Mikesell, 2010). This indicated that the city received minimum returns, leading to stalled projects. Management of the funds to cater for the past projects and the existing projects indicates potential threat to the decreased rate of the city’s development (Curtatone, 2010). The city has to develop systems that would protect local companies from bankruptcy. This is considering the public trades companies in the Somerville city. Somerville city has established risk models for the businesses in the city that focus on the credit ratings by considering the earnings and the balance sheet strength. The city has accounting and governance policy that enables to predict firms in the city that are likely to undergo financial distress, regulatory challenges, financial restatements, and class actions (Mikesell, 2010). Somerville city must cultivate an environment that supports businesses.
The fund balance for the general fund and the various enterprise funds has diminished significantly. This is an indication of contraction. The fund balance indicates the sustainable non-discretionary social innovation developer and the practice involved in infrastructure investment (Curtatone, 2010). The fund balance is assumed ‘little’ considering the hard economic times being experienced by the global entities. The funds balance in Somerville city is calculated by considering the differences between the assets and liabilities (Mikesell, 2010). Fund balance is also referred to as the net assets (Curtatone, 2010). Fund balance in Somerville has been attracting attention in the financial statements. Those fund balances are divided into two groups: the reserved fund balance, and the unreserved fund balances. Reserved fund balance is usually not available for appropriation, while unreserved fund balances can be transformed to other channels. Fund balance is sensitive in determinacy of future developments and growth. This is because magnitude of the unforeseeable factors significantly determines the amount of funds to be used. In some cases, the reserved amounts are barely enough to finance a certain event of the city.
Somerville city, Massachusetts, is located in Middlesex County, north of Boston. The city is considered to be one of the densely populated in the municipality of New England, and has a population of seventy-five thousand seven hundred and fifty four (Curtatone, 2010). Somerville city has boards, authorities and commissions in place for addressing the immediate populations. The city has animal control department, personnel’s department, finance department, city clerk, communication platform, and constituent services (Mikesell, 2010). Others are the department of public works, fire, police, health, youth and recreation, schools departments, strategic planning, and community development among other crucial government bodies that regulate the environmental aspects in the city (Curtatone, 2010). The department works closely with other city departments in an attempt of developing and maintaining a comprehensive capital improvement plan that addresses the present developing and the anticipated developments. It is evident that budgeting for the public administrator influences the operations of the municipal bodies.