The Distinguished Budget Presentation Awards Program: a reviewer's experience.

• Author: Cavenaugh, James L.
• Position: Includes related article

The GFOA's Distinguished Budget Presentation Awards Program is dedicated to improving governmental budgeting by evaluating operating budgets against a list of mandatory and general criteria. Similar to the Certificate of Achievement for Excellence in Financial Reporting, the budget awards program involves a significant number of finance professionals as volunteer reviewers. Budgets, submitted by finance directors, are reviewed by three independent finance professionals who evaluate the document using 26 criteria developed by the Budget Awards Subcommittee of GFOA's Committee on Governmental Budgeting and Management. Since it began in 1984, the program has grown steadily, reaching a level of 692 participants, 555 of whom received the award, for the most recently completed budget year.

A budget receives the award if it meets the criteria - 13 of which are mandatory - developed by the subcommittee. (For a listing of the evaluation criteria, see Government Finance Review, April 1993, p. 12 or request budget awards information from the GFOA office in Chicago.) If two of the three reviewers agree that a mandatory element is not present or is not adequate to satisfy the criterion, the budget does not receive the award. The reviewers evaluate a budget according to four categories:

* as a policy document - the budget document should propose, identify, and clarify policies;

* as a financial plan - the budget should promote solvency, efficiency, and rational collective choices regarding the distribution and use of municipal assets and resources;

* as an operations guide - the budget should go beyond purely financial dimensions to deal with the function of the different parts of the organization and the number and level of employees; and

* as a communications device - the budget should use narratives and simple charts or graphs to convey its meaning to residents, taxpayers, and constituents.

In addition to submitting a budget, participants prepare a "criteria location guide," which indicates on what page in the budget reviewers can locate the information that satisfy each criterion.

The thrust of the program is to improve governmental budgets by providing recognition for those whose budgets meet the award criteria. In the process, all participants receive the equivalent of free consulting expertise from reviewers with different backgrounds and interests - the combination of three reviews results in useful suggestions for improving the budget document. The remainder of this article answers some of the questions frequently asked by governments interested in submitting their budget and individuals interested in becoming a budget reviewer.

How hard is it for a submitted budget to receive the award?

Detailed guidance on preparing a governmental budget is provided in two GFOA publications: The Best of Governmental Budgeting and GFOA Budget Awards Program: Illustrations and Examples. The latter book is quite helpful for participants and reviewers since it gives examples of actual submissions that do and do not meet the criteria. If the guidance published in these books is followed, receiving the award is not hard at all. A word of caution, however, to participants: if the budget is lacking in many important areas, it may be best to take more than one year to make the changes needed to receive the award.

How much time does reviewing budgets take?

The time for one review varies with the size of the document; the reviewer's interest in a particular item, such as a new revenue source or a new way to describe "fund balance carryover;" and the accuracy of the "criteria location guide." An experienced reviewer might take an hour or two, while a novice might take quite a bit longer - and consider it time well spent.

Reviewers evaluate at least four budgets per year. Also, reviewers can request particular months in which they would like to receive the budgets, thus avoiding having to review budgets during their busy times of year.

Does a reviewer have to read every page, even of long budget documents?

No. After giving the entire document a quick scan to check for coherence and consistency, an experienced reviewer may sample the departmental sections, giving close attention to one or two major component units, as well as some smaller ones. Novices would do well to read the budgets...