My perfect budget team
The budget process is fascinating. A complex combination (should we say collision?) of technical, political, and human factors produce a plan that determines how public money will be raised and spent.
My first contact with any kind of budget was as a young soldier. Our captain (who was not much older than me) called us together and explained that if we did not spend our allocated budget this year, we would lose the difference and our budget would be reduced in the next year. With his prodding, we discovered a sudden need for expensive new radios and other high-tech gear.
I wasn’t in Kansas any more
Since then, I have budgeted in corporate, not-for-profit, and start-up organizations. I have balanced budgets in the face of indecipherable Federal JTPA regulations, stuffed-shirt corporate officers, and explosive yet poorly-capitalized growth. But none of those technical challenges prepared me for the drama of municipal budgeting, in full view of the public, staff, and Council.
There was never a need to actively socialize the budget process in the private sector. We drafted the budget, casually ran numbers by various people in operating areas, adjusted the numbers when necessary, and wrapped up the process. There was little concept of give and take, of achieving consensus or addressing any stakeholders beyond the Board of Directors. Our interests were fully aligned around controlling expenses, building revenue, and maximizing profits.
“Welcome to government service”
“The budget means something a little different around here, and the annual process is just a little different too,” I was told by my new bosses. I spent a lot of time going from department to department in those early years. I learned that if I left a department head unsatisfied, his pipeline to the City Manager was fatter and faster than mine. I also learned that most folks did not know as much as they thought they did. In particular, acceptance of of a fixed resource pie seemed to get little traction.
We had a gruff old Public Works Director who had probably occupied his office longer than I had been in the work force. He ran his domain with expertise and daunting authority. I remember him rearing back at a budget meeting and telling us his shop had given enough and it was time to “cut some guns and hoses” from the budget. Of course the Police and Fire Chiefs had some other cost saving suggestions for him, and me.
Experience is a hard task master, but I finally realized that finding some allies would be a good idea in this battle. We started developing a group of people interested in budgeting who could come together and explore the reality of limited resources and unlimited demands. It was a gradual process, but we made progress — expanding the envelope and spreading the learning and the budget process more widely each year.
Over time, I found that some groups and individuals grow stronger and more central to the budget process while others fall out of the process to varying degrees. While budget work is central to staff in a dedicated budget or finance office, it is extra work for staff in other shops. If their boss does not actively support their involvement and allow time for them to focus on the budget process, then they are put in an awkward situation.
Core team and other players
“Team” may be too strong a term for what usually evolves. “Temporary work group” might be more accurate for the loose amalgamation of people that get involved. Budget team members tend to have a combination of departmental needs, affinity for numbers, desire to be on the inside, and obsession with detail. In my experience, Assistant Directors, Analysts, or whichever title the number two person in each department goes by tend to have these traits. My most successful teams have been heterogeneous mixes; they represent every department and include a range of seniority and management levels.
In addition to this core team, there are two other “teams” in play. First, the executive group is often asked as a body to support the working budget team, and of course, are the ultimate arbitrators of the budget that is recommended to the legislative body.
Second, it is beneficial to have an expanded budget team of stakeholders outside the core process that includes representatives from organizations like Library, police and recreation oversight boards, labor units, and the general public. You may not get them together physically, but may share information and feedback over the Internet or at their own group meetings. Bringing these people into the process often makes it harder for them to oppose difficult decisions as they may if relegated outside the process.
Education is magic
I have tried many approaches to training teams and managers on budgeting, and every attempt has yielded mixed results. Some get it immediately, wonder what all the fuss is about, and want to know when they can get back to work. Others take more time. Sometimes they understand but are nervous about plunging in and need some moral support. And some just come to it more slowly — although they can be very strong because once they do get it, they really get it. They know how to dot the ‘i’s and cross the ‘t’s, how to account for every dollar.
In the end, a mix of face-to-face training with Q&A and written material including screen shots has worked best for me. Shortcuts like memos and blank worksheets cause more cleanup time than what we would have invested in proper training at the front end.
One reason to keep teams open and flexible was the the budget cycle’s length — usually running six months or more each year. People get promoted, move around, and are tasked with new projects and find interests over time. We learn best by repetition and iteration. An annual cycle makes the accumulation of expertise a slow process, and budget veterans a prized commodity.
So what’s the point?
The budget expresses the government’s vision and strategy. It is not desirable or realistic do it alone. Crafting a budget that supports staff in their work for their stakeholders is the goal. The budget is best crafted by a team working in the daylight, listening and learning broadly, iterating and testing ideas. The process will produce superior results, with a budget that is widely understood and accepted on the day it is adopted.
Mike McCann moved into government service in Ukiah, then Monterey CA, after beginning his career in corporate (ADP, Wells Fargo Bank, Blue Shield of CA), not-for-profit (Blue Shield of Ca, Mendocino Private Industry Council), and start-up accounting. For the last 20 years, Mike has been hands-on with budget, financial reporting and accounting operations, including City budgets and CAFRs. He holds a B.S. in Accounting from SJSU and M.S. in Instructional Technology from CSUMB.
Category: Government Finance