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Copyright 1998 by Walter G. Green III
Money is the absolute determinant of what any organization can do. It buys equipment and supplies, pays the rent or the mortgage on the building, insures your people, pays salaries and benefits, buys the gas that lets response vehicles go down the road, etc. Therefore, how you raise, control, and expend your money is a basic strategic decision for any organization. The document that captures that decision making is the budget. How you prioritize spending determines what level of service you can provide; how you plan income determines the level of effort fund raising will represent for the organization. How you control the actual flow of funds in and out of your account determines whether you will meet the strategic objectives you have set, and whether you are properly safeguarding the funds the public has entrusted you with. This means that budgeting and financial control mechanisms become critical functions for all emergency services managers.
At the end of this session, each student will be able to:
(1) Distinguish between expense and capital budgets.
(2) Describe processes used for budget formulation.
(3) Identify the characteristics of lump-sum, program, and line item budgets.
(4) Identify areas of concern in monitoring fiscal management.
(5) Describe sources of funding for emergency services agencies.
During this session, read the following material:
(1) Chapter 12: Management of Financial Resources in Carter and Rausch (2nd edition) MANAGEMENT IN THE FIRE SERVICE or Chapter 8 in the 3rd edition.
(2) Read the mini-lectures posted as a link to this page.
Everyone answer three of the following five questions (one E-mail to the Listserver per question, and make sure you include a subject line that identifies which question you are answering). You may answer them in any order you wish. Remember also to read and comment on at least two answers to questions by your fellow students.
(1) What budget process does your organization use? Is your budget an annual one, or on a biennial schedule? What process is used to gather input for the budget?
(2) How does your organization control the expenditure of money? Is there assurance that the public's money is spent the way it should be, or are there expenditures that you would feel could be considered questionable?
(3) Where does your agency's funding come from? If you do fund raising, what mechanism do you use?
(4) What percentage of your budget is operating (or expense) budget and what capital budget? What types of capital budget expenditures are you making?
(5) Is your agency on a lump-sum, program, or line item budget structure? Describe the process used to allocate the money.