How Budgeting is done in Institutions - Article Example

Budgeting is an important tool in institutions as it provides in-depth analysis on how the institution expects to raise and spend its income. In the budget, the expected needs of each department in the institution are outlined and matched with the existing resources. In addition, budgeting makes the decision-making process expeditious as all capital structure decisions are always made during budgeting. It is paramount to note that the budget instrument is the only recognized tool for communicating financial requirements to the funders of public institutions.

Apart from internal organizations that influence the budgeting process, there exist external forces that determine the allotment in each department. In this case, these forces usually influence the budgeting process by making recommendations and distributing circulars that dictate on various items in the budget statement. It should be noted that public institutions are mainly funded from the public coffer and hence the entire budgeting process is often subjected too much oversight and supervision.

Apart from the oversight practices, the board of directors managing a given institution seeks to their interests in the budget. Their main interest is to influence and to have control over the fee pooled from the learner. In this case, the independence of the budgeting officers is not guaranteed.When filling vacant positions in the budgeting offices, all interested parties in a given institution often feel comfortable when their choices are picked. In this case, there exist situations where some candidates with good credentials miss these vacancies.

For the obvious reason, every interested party seeks to have people they are comfortable with on the budgeting table. History always exonerates diligent officials who occupy budgeting offices at any given time. In most cases, the end products justify the process used. In this case, when an institution is hard hit by bad economic time, the budgeting office carries all the blame. Going with history, many budgets fail to work when there is significant external influence. In this case, the budget committee or department takes much consideration of recommendations from external forces and hence disregards justifiable needs on the ground.

In this case, the entire process will degenerate and will not stand the test of time. A unit budget manager is an officer with administrative duties and is in charge of several financial accounts for the institution. In this case, the unit budget manager is equated to a departmental chairperson that manages the accounts of a particular academic department. For this interview, an academic unit is referred to as a distinct administrative entity that can operate independently from other functional entities.

In this case, the unit will have its budgetary functions and a unit manager is always in charge of its functions. Most of the functions in public institutions such as colleges and universities are government funded. In this case, it is the mandate of the federal or state government to avail resources for running these institutions. In this case, if the funding is not sufficient, some of the institutional functions will not be financed and hence they will be considered an unfunded mandate. The officer in charge of budgeting has the role of setting aside a contingent allotment for unfunded mandates especially if their functions are vital for the running of the institution.