Kenya’s Budget Making Process.

The fiscal instrument is the budget, an annual statement from the government dealing with its income and expenditure plan for the next financial year. Fiscal Policy is an effective tool which can target specific sectors of the economy such as individual industries, unlike monetary policy which affects the economy as a whole; this is why the government implements a policy mix.

The budget process is a powerful planning tool for government to make important resource decisions. According the Carney and Schoenfeld‘s article on How to read a Budget, an operating budget is a reflection of government’s financial plans. When a budget is

Deficit spending refers to the extent at which the government expenditure exceeds revenue over the financial period. This is the opposite of budget surplus. We may apply the term to an individual, private company or government budget (Brux, 2011).

Budget preparation is a process with designated groups and individuals having defined responsibilities. According to Irene S. Rubin “ The public budget process mediates between organizations and individuals who want different things and determines who gets what out of the budget.”1The Government set up an annual budget that includes people perspectives, opinions , accountability and than determine how the budget will get divided based on protected interests. Moreover, Public budgeting determines how government spend money, provide necessary resources , and limit government expenditures to prevent overspending.

Capital planning and budgeting is a very vital piece in the Public Budgeting System process. It is an essential implement in the financial management practice and is effective in both public and private organizations. It is the method which consists of the determination and the evaluation of the investments and the possible expenses by an organization. As explicate by Lee, Johnson, & Joyce (2008), capital budgets help in determining how much of each form of investment is needed, and it supports an organization in assessing the available revenue which includes loans is required to finance those investments (p. 475). Capital budgeting is a central part of the universal

A budget requires an organized layout that categorizes revenues and expenditures within particular funds to account for operations, administration, student services, salaries, benefits, transportation, and curriculum development, to name a few. The four funds for budgeting are the General Fund (10), Special Revenue Fund (20), Capital Fund (30), and the Debt Service Fund (40). Categorizing items into funds facilitates the budgetary process by grouping revenues and expenditures to compare expenses and make adjustments to meet educational goals as needed.

The budget is a plan of how to spend available funds wisely, and entails a list of all expected revenues and expenses. The budget is compiled annually and marks the beginning and end of the fiscal year. While the primary burden of the budget lies with the finance department, it is the responsibility of all faculty affected by budgetary practices to provide insight into the projected financial future of the school. The goal and evidence of a successful budget is to have the actual numbers of the financial year equal or come close to the estimated

Analyze the scope and sequence of budgeting in terms of sources of revenues, purpose of government expenditures, budget cycles, budget preparation, and debt administration.

\Governments undertake budgeting as one of the crucial activities with a budget comprising of a plan regarding financial operations that comprise of estimated revenues for financing estimated expenditures within a given period (Florida Finance Officers Association, 2011). Effective budget processes require involvement of all stakeholders so as to enhance in arriving at a budget that is well planned as well as communicated to the respective stakeholders.

1. (TCO A) One of our lectures discusses the budget execution stage of the budget cycle. Please identify and explain each of the major steps in the budget execution process. (Points : 25)

The central challenge that budget developers encounter is predicting what the future holds for the internal business and external factors. Reading the future is something that can never be done with perfect precision. The fast pace of technological change, the complexities of global competition and world events make developing effective budgets both more difficult and more important.

This assessment is about the requirements to undertake budgeting and forecasting the finances of an organization. After reviewing the case study I have prepared a budget statement.

A budget, as defined by Hilton (2009 pg 348), is a detailed plan, expressed in quantitative terms that specifies how resources will be acquired and used during a specific period of time. A budget is a financial document utilized to project future income and expenses. A budget is based on how much you make in income and what your monthly expenses are. Budgets evaluate performances while the plan is what is going to happen or refine what you want to accomplish by thinking ahead. The purpose of having a budget is it improves efficiency, assigns responsibility, provides direction, and helps businesses plans and control finances. Managers use the budget as a

Budgeting is crucial in the well-being of a company especially the financial health status of a company. In fact, no professionally managed firm would fail to budget, since the budget establishes what is authorized, how to plan for purchasing contracts and hiring, and indicates how much financing is needed to support planned activity. It is routine for a company to budget for its expenses. Expense budgets act as a guideline of how much revenue a company would require keeping the activities running. It is used to set the company’s targets for a certain period.

Budget and budgetary control practices are undeniably indispensable as organizations routinely go about their business activities and operations. These organizations are constantly on the alert on how actual levels of performance agree with planned or budgeted performance. A budget expresses a plan in monetary terms. It is prepared and approved prior to a particular budgeted period and explicitly may show the income, expenditure and the capital to be employed by organizations in achieving their goals and objectives.