Public Budgeting and Ethics - Coursework Example

Public Budgeting and Ethics Name of Student: Name of Course: Name of Instructor: Date of Submission: Public Budgeting and Ethics Public budgeting is the planning of how public resources will be used within a specified period of time; usually twelve months. It is a financial instrument used to control public financial resources (Catak & Cilingir, 2010). Public budgeting is normally composed of various disciples including economic, political, accountability and administrative (Norton & Elson 2002). Additionally, there are many formats of budgets including program, performance and line item budgets. Public budgeting can either be done at the state or federal level. An important aspect of public budgeting is ethics. Ethics is defined of a set of morals, values and beliefs which are upheld in a specific society. There are various ethical issues which are associated with public budgeting (Menson,2007). The following easy will give a deep insight into public budgeting after which ethical issues associated with it will be discussed. There are various disciplines or functions of public finance. The first discipline is the political disciple of public budgeting. This disciple gives central focus to the politics which influence spending (Menson,2007). The second function is the economic disciple which gives focus to the economic/ financial factors influencing the collection and spending of public resources. The third discipline is the accountability or control function of public budgeting which upholds various principles of business (Shulock, 2002). The fourth disciple of public budgeting is the administrative or material function where public budgeting is focused on public administration (Menson,2007). On this, public budgeting is focused on ensuring that the public resources are administered appropriately. Lastly is the organizational function where the public is vied as an organization, hence requiring a budgeting control method aligned to organizational theories. Ideally, public budgeting is focused on controlling the resources which are collected from private. This explains the reason as to why public budgeting is defined by Donald Kent as the decision about the amount of the society’s resources is to be taken from the private sector so as to be used to solve problems which are of public interest. There are various formats which are used to make budgets formats. The first format used to prepare budgets is the line format. The line format emphasizes on total control of the public resources for use in public issues. The format has a low regard for policy; hence the lack of clear policies. The public budgeting format is used in instances when the budgeting team wishes to reduce / possibly eliminate instances of conflict. The second public budgeting format is the program budget. This format has a high regard for policy. Under this budgeting format, the governing body established and implements polices which govern the way in which public budget is to be done (Whitton, 2001). The program budget format emphases on what the government should do with the collected resources. From this, the government initiates programs which are to be implemented using the collected resources. This budgeting format requires more analysis so as to come up with specific areas in the public domain which needs to be given. The last budgeting format used in public budgeting is the performance budget. This budget emphasizes on the management of the public funds. Under this management oriented budgeting format, the governing body is focused the productivity of definite tasks and not the overall goals of the public sector. Generally, this format emphasizes on the administrative outcomes of budgeting (Catak & Cilingir, 2010). Public budgeting can either be done at a federal or state level. Federal public budgeting is the type of budgeting which is done at the federal level. Under this type, the federal government is responsible for coming up with budgetary control measures on the use of public resources. The federal level budgeting is characterized by political and economic perspectives (Norton & Elson 2002). On this point, it is important to note that the federal government is highly political; hence must use the public funds to suit their political concerns. Additionally, the federal government is responsible for the national economy hence have to develop and implement economic driven plans so as it enhance it. The federal level public budgeting is also expenditure driven. The federal government budgets on how it will use money to create impacts on the national economy. Additionally, it is associated with entitlements and such spending as defense; which have an important role in the broader society (Shulock, 2002). On the other hand, a state level public budgeting is revenue driven. On this point, it is worth noting that this type of budgeting is focused on the net revenue which a specific action is due to have on the state. The state level budgeting has administrative and organizational perspectives (Shulock, 2002). Generally, state level public budgeting is characterized by a higher degree of a unified executive control. There are various ethical issues associated with public budgeting. The following section will give an insight into them. (Shulock, 2002) One of the issues is traditional perspective on ethics. This ethical view of public budgeting got its roots from the business world. it takes the notion that the public sector should be governed in the same way as the business sector. Under the traditional ethical view on public budgeting, the underlying factor was to stay out of trouble; hence meaning that the budgeting body complied with the laws, ethics and other factors layed down by the governing authority. The traditional view on ethics emphasized on neutrality, rules and efficiency of the budgetary control process (Yee, James & Leung, 2008). So as to achieve this, the budgetary control was focused at preventing fraud, abuse and waste of the public resources (Menson, 2007). For this reason, the traditional perspective on public budgeting ethics can be considered to be means based; meaning that it was more focused on the means of preventing misappropriation. The second ethical issue in public budgeting is the contemporary perspective of ethics. Under this view on ethics, moral reasoning, justice, leadership and integrity are highly valued as compared to the traditional view. The contemporary perspective on ethics places emphasis on value and not neutrality as it is with traditional views on ethics in public budgeting (Yee, James & Leung, 2008). Under value ethics, emphasis is given to a set of values which the society upholds. On the later, the governing body is focused on evening out the use of resources on the general population. Additionally, the view in ethics is focused on the accomplishment of the public good. Generally, the governments using the contemporary perspective on ethics are more results oriented; hence focused on the ends and not the means as compared to the traditional view on public budgeting ethics. The third ethical issue in public budgeting is political issues (Norton & Elson 2002).. On this point, it is important to note that politics plays a big role in governance and hence in public budgeting too. It is sometimes unfortunate or fortunate in some instances since the people who make and control public budgets are political leaders. For this reason, political ethical issues play an important role in identifying the people who pay or benefit from the decisions made in public budgets. Additionally, the political leadership of a county has a great influence on the public interest (Norton & Elson 2002). Ideally, ethical public budgeting should not be used to disadvantage some people because of political reasons. The fourth ethical issues in public budgeting are technical issues. Technical issues with respect to public budgeting are those issues which have the technical process or making the budget at heart (Yee, James & Leung, 2008). On these ethical issues, it can be noted that the budget experts can from information in a specific way so as to get specific results. Additionally, the experts may withhold information from the public with the objective of achieving specific goals. The reason as to why the information may be fixed or withheld should have the good of the public at heart; so as to be considered ethical (Whitton, 2001). Fixes and gimmicks by the technical experts are also aspects of technical ethical issues in public budgeting. Fifthly the budget process is also a n ethical issue in public budgeting. Under the budgeting process, the budget game may be played, abuse of information and data may be used to justify the budget and programs may be advocated for in accordance to the loyalty given to the executive (Shulock, 2002). For this reason, the budget process is prone to many ethical issues hence the need to uphold ethics in the entire budget life cycle. Concluding, public budgeting has been described as the process by which public resources are planned for use in addressing problems facing the public sector. Public budgeting has five main disciplines namely political, accountability, organizational, managerial and economic. The essay has discussed these functions in detail. There are three main formats of public budget formats which were discussed in the essay. They include line item format, program budget and performance budget formats. Each of the formats has specific characteristics which influence it use. It was also seen that public budgeting may be done at the state or federal level. Just any other public process, public budgeting is highly influenced by ethics. The essay identified traditional perspectives on ethics, contemporary perspectives on ethics, budget process, technical issues and political issues are the main ethical issues in public budgeting. Summing up, it can be appreciated that this essay has been able to give an insight into public budgeting and ethics associated with it. References Catak, S., & Cilingir,C., 2010. Performance Budgetng In Turkey, OECD Journal on Budgeting, 2010 (3); 7-57 Menson, T., 2007. Ethics and State Budgeting, 95-110 Norton, A.,& Elson,D., 2002. What’s Behind The Budget? Politics, Rights And Accountability In The Budget Process, 1-51 Shulock, N., 2002. Public Budgeting and Finance, 1-21 Yee, C., James, K., & Leung, J.,2008. Japanese Culture And Budgeting A Review Of The Literature And A Limited Pilot Study To Illustrate The Research Agenda, Managerial Auditing Journal, 23(9); 873-899 Whitton H., 2001. 'Implementing Effective Ethics Standards In Government And The Civil Service, Transparency International , 1-12 Read More