The Path to Collaborative Budgeting
Budgeting is at the heart of every government, and smart governance starts with smart budgeting. In most cases, budgeting is a mandated, formal, and highly structured process. Classic budget development often happens within the Finance Department or Executive Budget Office. Over time, most governments have developed sophisticated and elaborate budget procedures using either Excel (often with many linked worksheets) or complex vendor provided budget software.
Today, we all hear collaboration thrown around in lots of ways regarding budgeting as the process slowly expands from the central offices to include the broader management team. The Great Recession taught us we need to hear the ground truth from the people doing the work, collect ideas from everywhere, and iterate together to balance new and old practices. Getting the “straight dope” was essential when the details mattered and choosing among competing needs was most critical.
As the Great Recession worsened, it began to eat into historical revenue sources long considered stable and dependable. Traditional budgeting processes had difficulty adjusting to new demands for financial efficiency and rapid change as the financial pressure on governments grew worse. Surfacing solutions which would allow to governments continue delivering essential services with decreasing resources was a growing challenge.
As we searched for policy solutions, we found that we tended to have a more concrete conversation, gain new perspectives, and find solutions not apparent from the top down when the people who have to live with the leaky roof, cut back on open hours, or struggle on with obsolete technology get to defend and prioritize requests for themselves.
This is where we began to see some of our budget software’s limitations. It’s one thing to send out an Excel worksheet and ask departments to update their operating costs for the year. It’s an entirely different thing to ask departmental teams to reconsider everything they do and defend the money they need to spend on those activities. It is even harder to develop and communicate alternative plans. The budget process, and ideally the software, must help the government evaluate and decide among difficult trade-offs.
Despite our best efforts to streamline our tools and support, we still found ourselves spending more time than we should have in basic staff training on how to use our tools; and not nearly enough time on the actual process of collaboration and the intelligent consideration of alternatives. Instead, our focus was more on the mechanics, rather than the goals we had to achieve.
In my role as the Assistant Finance Director, I led the team which conducted training for budget staff, issued the budget worksheets, mandated the timing of their submission, collected and assembled all the supporting documentation, and created the budget binders that went to our executive and budget review teams. I staffed the budget review team meetings and updated the results. We presented the draft budget document to the city manager and supported him in front of the City Council. Once the budget was adopted, we produced the budget book and posted the details back to the accounting system. Managing this controlled and elaborate process distracted from and overshadowed the collaborative solution-seeking focus we were trying to achieve.
As the recession ground on and we went through this process for the second and third time, it was clear something needed to change. Instead of putting thought into discussion and collaboration, we were repeatedly forced to put the process in front of results. We were able to save little time for original thought and research. Once all the easy savings have been made and we were down to the to the bone, every cut hurt, every decision was more important than the last.
It was a painful time for everyone working in government, and for citizens who needed the services we provided. The lack of tools was onerous to me and ultimately lead to the role I took on with OpenGov when they first entered the scene as a newly incorporated technology startup in the local government space.
I jumped on the opportunity to join in and help design a new reporting and budgeting system, starting with a clean sheet, without worrying about legacy code and concepts. We based our work on the experience of experts active in the field, including our own hands-on knowledge. From the beginning, we built tools that are focused on bringing people together and enabling teams to better communicate, plan and think about their current work and strategic initiatives.
The working name of OpenGov’s just released budget product was Collaborative Budget Builder. Enabling effective collaboration has been our first objective since the product was conceived. It is designed to help governments achieve superior results through robust and flexible functionality that adapts to each agency’s unique needs, yet Budget Builder is simple to use, easy to learn, and respectful of the government staff’s time.
In budgeting, there is a long-standing paradox: Many staff members develop significant expertise in their fields. They may have great ideas on better ways of doing business, saving money, and providing better service to the public. However, speaking up during the budget process takes them far out of their comfort zone and into the black arts of finance and budget. Governments can open the door to innovation with deep collaboration using straightforward software, shared access to a risk-free suggestions platform, and clear communications. Turning the team loose to iterate, discuss, and come to consensus can result in a smart plan that everyone is poised to implement successfully.
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.