Centralized Budget

Debate: Centralized Budgeting

CJA/365

Introduction

Budget planning is necessary to indicate the future direction of an agency or department regarding expected monies and expenditures. This paper will discuss whether the budget authority should be granted across multiple levels in criminal justice organization or centralized by a separate city or government unit. I will provide supporting points to my position as well as countering points to my position examining the advantages and disadvantages of each.

Position

Budget allocation utilizes taxpayers money and calls for the proper management of those monies. Therefore, having a government unit to oversee the budget allocation ensures effective stewardship of taxpayers monies.

Supporting Points

I. Reduced competition within departments

When a budget is formulated utilizing an external unit, there is reduced competition among various departments within the organization for budget allocations. When the budget is formulated using internal units, departments may view each other as competitors competing for the same funds and managers of the different departments may over budget with the intention of having the larger piece of the pie. In such case, managers view each other as threats leading, to a lack of cooperation among them and their departments. As a result, this could result in overall inefficiencies in the entire organization. For this reason; departments should work together in collaboration to achieve set objectives .

II. Cost reduction

One of the primary purposes of budgeting is to minimize expenditures across the whole of the organization. When budgeting from a centralized point, the organization reduces redundancy by reducing the time and money spent on the budgetary process in every department. Thus, by reducing the amount of time devoted to employees and budget related activities the organization can cut cost. Moreover, the organization does not have to hire additional personnel for budgeting purposes. Having a single separate unit budget for the entire organization will reduce the expenditures related to hiring personnel within each department to manage the budget .

III. Reduction of instances of misappropriation of funds

When department heads have the opportunity to prepare individual budgets, there is a chance of misappropriation of funds. Having a central unit where the budget for the agency is made minimizes the chance of the departmental managers misappropriating those funds. This is due to the manager utilizing the resources allocated and not choosing how to allocate those funds. Having a governmental unit decide the budget places an authority over the managers and the organization to oversee the appropriation of the budget in all departments within the organization .

IV. Goal meeting

While an organization may consist of various departments, the goals of every department should be aligned with the organizational goals. By allowing each department to make budget allocations, you are setting the individual units at a position where they may push for their goals irrespective to how much the goals align the organization goals. By having a centralized unit for budgeting purposes for the whole organization is to ensure that the budget allocations made for every department will enable the agency to meet its goals and thus the organizational goals are met .

V. Performance accessibility

By having a centralized unit responsible for the budget, assessing performance and accountability would be simplified. When a governmental unit is responsible for budget allocation, the provisions made are enough to meet the expectations placed on the department. As such, when the department falls short of those expectations, the manager may be accountable, and hold the employees responsible for the shortfall. By having everyone work to meet the expectations placed on them efficiently, no changes to the budget are made, and there is nothing to hold anybody accountable for .

Opposing Points

I. Meeting the departments needs

Alternatively, having budgetary authority granted across multiple levels within an organization proves to be very beneficial. The budget could be tailored to meet the needs of each department within the organization. Placing the manager of the department has the authority in putting the needs of the department at the focus of the budgeting process. As a result, the budget will sufficiently cover all the needs of the department taking into account the short-term and long-term needs .

II. Reducing Bureaucracy

Decentralizing the budget process reduces bureaucracy within the organization by allowing managers and employees in various areas within the organization to enjoy autonomy. In the event that only a single authority is responsible for the budget, managers and staff have their hands tied as they do not have a voice in budgetary decisions. Managers and staff are reduced to thinking inside the box and cannot take the initiative when making decisions .

III. Making changes

Every so often techniques applied in the work process produces changing needs. When the budget is completed at the department level, it is easier for these changes to be made as the department tends to react faster than the higher authority placed above the department. As a result, the department’s needs are met quicker, and operations aimed at achieving these goals continue .

IV. Decisionmaking processes

Emerging research has shown that it is vital for employees of any organization to feel like they are part of the organization by being involved in the decision process. Involving employees creates a sense of value and appreciation. In the same manner, involving managers of various departments in the budgetary process will make them feel their input is appreciated and valued as a contributing member of the organization. By allowing managers to run their departments with autonomy, they are shown that the organization has trust in them, and in most cases, the manager will take ownership of that department and see that it is successful .

V. Stewardship

Decentralizing the budgeting process means that managers own the process, have the organization’s health at heart aligning the goals of the department with those of the organization. Additionally, a manager can encourage the employees under them by acting as stewards in reaching the goals of the organization as well as the individual’s career goals and aspirations. As a result, the manager and the organization build skills, maintain talent, and reach its goals with the resources it has available.

Conclusion

Budget planning is necessary to indicate the future direction of an agency or department regarding expected monies and expenditures. Some would argue that a centralized budgetary unit is a way to go while others would say that decentralizing the budget process is more beneficial to the stakeholders. It is up to the individual organizations to determine what is best to meet their individual needs.

References

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Hatami-Marbani, A., Tavana, M., Agrell, P., Lotfi, F., & Beigi, Z. (2015). A common-weights DEA model for centralized resource reduction and target setting. Retrieved from Computers & Industrial Engineering, 79, 195-203: https://www.researchgate.net/profile/Madjid_Tavana/publication/267941407_A_Common-Weights_DEA_Model_for_Centralized_Resource_Reduction_and_Target_Setting/links/5482023b0cf2e5f7ceac4a29.pdf

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