Attached is an assignment request for a response.
Read This Week
The Basics of Public Budgeting and Financial Management
· Chapter 1: The Context of Public Sector Budgets
· Chapter 7: Financial Management
M1D1: Public vs. Private
PDF version attached for this module “Let’s Talk”
Let’s engage in some dialogue. It’s one thing to read about a topic. But, in order to learn, we need to think, write, and talk about the topic. We’ve combined the interactive presentation above with a discussion so that you may jot down your thoughts, insights, questions, etc. as you read. The discussion prompts for you to respond to are preceded by a slide titled “Talk About It.” Immediately following this slide, please respond to those discussion questions. There may be more than one prompt in each Sway.
Within the notes, you’ll find guiding questions, articles, and videos to help spark the conversations. To start the course off, let’s talk about the differences between public and private budgets. Let’s also explore the implications of federal budget differences on the general public. To earn maximum points, be sure to review the discussion guide and the discussion criteria links below.
· Why Governments Should Invest in Accrual Accounting (Links to an external site.)
· Performance Budgeting in Municipal Government (Links to an external site.)
· Rewarding Greater Accountability with Increased Managerial Flexibility in Davidson County (Links to an external site.)
· Budget-Based Organization of Internal Control (Links to an external site.)
Performance Budget with Tim Kadlec (4:17 mins) (Links to an external site.) Closed-captioned
Government Budget Formats (2:59 mins)
PEER ONE POST: (NEED RESPONSE TO THIS POST 250 WORDS OR MORE)
Public budgeting differs from private budgeting in many ways that create difficulty in managing public budgets that private entities may not face. A good portion of the U.S. Postal system is dependent on taxes being paid and allocated to the administration (Menifield, 2017). Meanwhile, private entities such as FedEx who accrue revenue through unit transactions (Menifield, 2017). Additionally, the administration’s budget is rigid and set at the beginning of each fiscal year, making it resistant to change as situations arise that call for an increase in spending (Menifield, 2017). In contrast, privately-owned entities derive money for their selves and are not part of a large pool of money that is shared (Menifield, 2017). As such, they can make decisions for themselves without consideration of other dependent agencies. This rigidity in the budget can force the USPS to overspend as it cannot increase prices to meet budgetary needs without prior approval.
Additionally, the USPS has suffered a loss in revenue due to the increased usage of email and other technological services that replace the mainstays of services once provided. Meanwhile, FedEx has always specialized in package delivery, which only has become strengthened by an increase in online purchasing. Package delivery is also costlier for USPS as they are unable to shift their budget quickly to accommodate market needs, especially when another technology is needed for large object sorting, holding, and distribution. Moreover, public funding is more vulnerable to certain types of environmental factors, especially in cases where broader scope decision-makers decide to divert funds initially allocated to one agency, forcing cutbacks that the agency had note accounted for (Menifield, 2017).
In 2019, President Trump wished to spend five billion dollars on a border wall (Daly, 2018). At this point, 75% of the budget had been approved, and the remaining 25% was held in limbo to agree (Shah, 2018). This was problematic as this remaining 25% impacted two-thirds of the cabinet-level departments and many significant administrations such as the Department of Justice (Daly, 2018). This shutdown resulted in many government workers being furloughed and questioning their financial stability (Shah, 2018).
When stalemates are met, the involved parties are forced to collaborate and form compromises to achieve both functionalities desired and to meet the standards of a fiscally responsible budget as determined by the parties involved. The political climate is a primary driving force in these stalemates as beyond meeting compromises in the budget, perception of power and control are linked to these public negotiations (Menifield, 2017). As such, even small concessions can be significant points of discord. This standstill occurred when Congress could not readily agree to how this wall could be funded. Much of the rigidity in public budgeting is responsible for this shutdown. Once a budget is established and agreed upon, it is extremely difficult to reconsider. As such, members of Congress who were against the wall and felt it was fiscally irresponsible were unwilling to allow the proposed budget to go through at the full amount. Meanwhile, members of Congress who were for the wall also could not push the budget through without an agreement. Even if Congress came together, their plan had to meet the President’s approval or have enough buy-in to garner an overriding vote that would overturn a veto.
Policymakers must be willing to do what is in the country’s best interest to overcome such an impasse. If the country is shut down for too long, many individuals may find themselves in precarious situations and even seeking other employment to meet daily needs. This will result in the degradation of the public sector, and citizens who rely upon those services will make Congress and the President accountable. This helps to ensure that any shutdown has a minimal duration, thus forcing more timely collaboration.
Daly, M. (2018, December 17). AP explains: What happens in a partial government shutdown. The Associated Press.Retrieved from https://apnews.com/3749546ccf5d48149655e5a24517090a
Menifield, C. E. (2017). The basics of public budgeting and financial management. [eCampus]. Retrieved from https://ecampus.vitalsource.com/#/books/9780761869764/ (Links to an external site.)
Shah, K. (2018, December 26). #Shutdownstories: Federal employees reveal impact of government closure. The Guardian. Retrieved from https://www.theguardian.com/us-news/2018/dec/26/shutdownstories-federal-employees-government-shutdown-impact
PEER TWO POST: (NEED RESPONSE TO THIS POST 250 WORDS OR MORE)
According to the FY 2018 USPS Report, the post office is in dire straits, as it continues to dig itself out of prefund pension and health benefit costs for postal retirees, to the tune of $6.9 billion owed in payments at the end of the 2018 fiscal year (“Post Office Results,” 2018). Despite an increase in the deliveries of packages, mainly due to the Amazon delivery of, “the last mile”, a term I grew to hate while working as a sub at the local Post Office, letter mail volume significantly decreased, $2.1 billion in first class letter mail. Although I don’t work at the post office any more, while I did, the volume of packages continued to increase, causing delays in delivering the entire routes worth of mail. Contrary to the popular belief of every angry individual I ever delivered a piece of mail to after they “waited at their mailbox”, I can assure you, the Post Office runs on revenue and is intended on being entirely self sufficient. In 2017, the USPS sought help from Congress, asking for; its retiree health program with Medicare, a rate increase for most mail, and the elimination of the price cap that generally limits rate increases for most mail to the rate of inflation (“Post Office Asks for Help,” 2019). In keeping with Menifield’s position, carrying deficits over to the next fiscal year is counterproductive to a balanced budget, and illegal among state and local governments (Menifield, 2017). In terms of budgeting format used, I would suggest the Post Office is using a hybrid budgeting format, with a heavy emphasis on line item budgeting as well as performance budgeting. Predicting costs in personnel, materials, supplies, and capital layout, may be aided by analyzing past budgets and results, working hand and hand with performance budgeting tools. Menifield’s comparison of Private vs Public budgets can be applied to the U.S. Postal Service vs FEDEX;
U.S. Postal Service – many decision makers, the budget is open to the public, not a flexible budget as it covers the entire year with little, to no room for flexibility, and confined to working within many rules.
FEDEX – has fewer decision makers, funds collected as a result of a service provided, budget can remain unavailable to the public, fewer rules and regulations, and most importantly the budget is very flexible and can be adjusted throughout the year (Menifield, 2017).
The ease of the decision making process within FEDEX, combined with the flexibility to quickly shift assets to areas of concern are two primary supporting traits of an effective and efficient budget, allowing FEDEX the ability to continue to lead and provide service to the public, with fewer decision makers, rules, and regulations.
In 2018, during my families annual trip to Disney World, I was forced to explain why there were three drunk individuals standing outside Mexico, in Epcot, chanting, “Build the Wall, Build the Wall”. They were so drunk it sounded more like, “Bill The World” and for a moment I contemplated making up a story about a man name William who was bigger than life, but I told the truth. In 2019, President Trump, with 75% of the budget already approved, threatened to, “shut down the government” by not approving the remaining 25%, directly affecting the Department of Homeland Security, The Transportation Department, and The Justice Department (Shah, 2019) According to Manifield, political budget strategies are used to pla the political game, in an effort to out maneuver politicians and ultimately get your agenda passed (Menifield, 2017). In this case, President Trump withheld from approving the national budget in an attempt to get funds allocated to build the U.S. / Mexican border wall. President Trump then enacted continuous resolutions to allow Congress enough time to contemplate the reactions and results of a government economic shutdown, as he held the entire budget over the heads of those not willing to budge on the progress of the wall, while also floating the idea of declaring a national emergency to get the funds. In January 2019, President Trump signed a bill which allocated no new funds for building a wall, despite the chants of the chants of the drunk trio outside at the happiest place on Earth, and shutting down the government. Giving the responsibility and ability to the President, to decide whether hundreds of thousands of government workers get paid, based off of personal agenda, seems insane. Holding the national budget hostage has now become a new normal, as we’ve seen it not only with this administration, but also past administrations. I fully understand the President is an elected position, but so are those who are elected to represent us in Congress.
Menifield, C. C. (2017). The basics of public budgeting and financial management (3 ed.). Retrieved from https://ecampus.vitalsource.com/#/books/9780761869764/cfi/6/16!/4/2/2@0:0
Shah, K. (2019). #Shutdownstories: federal employees reveal impact of government closure. Retrieved from https://www.theguardian.com/us-news/2018/dec/26/shutdownstories-federal-employees-government-shutdown-impact
U.S. Postal Service Reports Fiscal Year 2018 Results. (2018). Retrieved from https://about.usps.com/news/national-releases/2018/pr18_093.htm
USPS Financial Viability. (2019). Retrieved from https://www.gao.gov/highrisk/usps_restructuring_postal/why_did_study#:~:text=Specifically%2C%