A new standard of excellence in budgeting.

• Author: Esser, Jeffrey L.
• Position: National Advisory Council on State and Local Budgeting new budget practices

Of all of the functional areas of finance, the one most in need of guidance is government budgeting. The GFOA, long a leader in promoting sound budget practices, was instrumental in establishing the National Advisory Council on State and Local Budgeting (NACSLB) to help provide this needed direction. The NACSLB was formed in the spring of 1995 with a three-year mission to develop a set of recommended budget practices for state and local governments and promote their use nationwide.

In September 1997, the Council released nearly 60 proposed recommended budget practices for public comment. The release of these practices represents a milestone in budgeting - in one document governments now have a comprehensive set of processes and procedures that define an accepted budget process. The practices advocate a goal-driven approach to budgeting that spans the planning, development, adoption, and execution phases of the budget.

The practices put forward by the NACSLB take a major step forward in promoting the linkage of the budget process with other activities of the government. Their scope is intentionally broad, recognizing that budgeting has many dimensions - political, managerial, planning, communications, as well as financial. Practices encourage the development of organizational goals, establishment of policies and plans to achieve these goals, and allocation of resources through the budget process that are consistent with goals, policies, and plans. There is also a focus on measuring performance to determine what has been accomplished with scarce government resources.

The Council's work is important in emphasizing that budgeting should have a long-range perspective, and not be simply an exercise in balancing revenues and expenditures one year at a time. This focus on long-term financial planning comes at a critical time. As the economy has rebounded and revenue flow has improved in state and local governments, many governments are facing pressures to increase spending for programs and services or cut taxes. Recommended budget practices encourage governments to consider the longer-term consequences of such actions to ensure that the impacts of budget decisions are understood over a multi-year planning horizon and to assess whether program and service levels can be sustained.

Citizen apathy and discontent with government has been a key concern of the Council, and it has sought to identify ways to improve citizens' opinion of the government...