Issue Assessments and Forecasting in Budgeting, Essay Example

The major subjects of issue assessments

These entail tools in the public budgets and expenditures category as follows:

Public Revenue Reporting and Monitoring: The reporting of public revenue informs citizens concerning amounts and sources of government revenues including how the government manages the revenues. The disclosure of such information to the public is so crucial in enabling citizens understand financial resources amounts the government has (Wang, 2010, p.6). It also helps citizens engage on issues of public finance with the government.

Budget Transparency (BT): This refers to a full disclosure, in a  systematic, timely manner, of all relevant public, fiscal information. In budget processes, BT is a precondition for effective public participation. According to (Wang, 2010), the combination of public participation and BT in the process of budgets helps in combating corruption, fostering governmental agencies’ accountability and thus contributing to judicious use of funds.

Independent Budget Analysis (IBA): This refers to the civil society organizations’ efforts in analyzing budgetary government proposals and sharing their concerns and findings with the public and government to champion for budgetary changes. IBA thus enables the public be aware of critical issues of the budget.

Alternative Budget initiatives: This refers to advocacy strategies, which seek to emphasize public budgets’ limitations with regard to critical issues or sectors in society.

Public Expenditure Tracking: This involves public resource flow tracing for the public goods or services provision to destination from the origin. This can help in detecting inefficiencies or corruption and bottlenecks in public goods and resources transfer (Wang, 2010, p.7). This is a key tool, which helps CSOs and the government to tame corruption and foster accountable, effective and transparent, public financial management.

Community-led Procurement (CLP): This helps local communities in implementing and controlling the process of procurement via their own organizations. This in most cases leads to increased openness and accountability, better value for money, reduced wastage and corruption and better quality services.

Participatory Budgeting (PB): This is a process involving direct participation by citizens in allocating a defined government’s budget portion. This gives CSOs and citizens increased influence in deciding where and how public resources need to be spent.

Qualitative, time series, and causal analysis approaches in revenue forecasting

Revenue forecasting is where analytical techniques are used to project future amounts of financial resources available. Forecasting techniques fall under qualitative or quantitative techniques. Time series and causal analysis approaches are quantitative forecasting methods.

Forecasting refers to the process of business, which attempts to estimate the use and sale of products to facilitate purchasing, stocking or manufacturing in sufficient quantities (Hutt & Speh, 2012, p.111). This has to occur early enough in order to support value-adding activities of the firm.

Qualitative and quantitative (causal and time series) rely on the past events. Although qualitative methods tend to rely on judgments regarding future revenue collection, the forecaster relies on historical trends in order to establish judgment. In any forecasting technique, there exists a judgmental perspective, a qualitative approach method of forecasting (Hutt & Speh, 2012, p.112). Quantitative forecasting method categories assume that past occurrences avail an excellent basis to enhance understanding of possible future outcomes. Both approaches, qualitative and quantitative incorporate factor information assumed as influencing revenue though they do not.

However, we note that there are differences between the two broad approaches. Quantitative methods differ from qualitative in that they rely on numerical data applicable for the revenue source. In qualitative forecasting, intimate market knowledge acts as the data source. Causal studies consider causal relationships between forecasted variables and leading variables. This approach tries to make an understanding of the system surrounding and underlying the item in forecast. Time series analysis rests on the thought that data on past performance or demand is useful in predicting future demand. Time series has distinguishing aspects such as average, seasonal influence, trend, cyclical movement and random error.

References

Hutt M., D. & Speh T., W. (2012). Business Marketing Management: B2B. New Tech Park, Singapore: Cengage Learning.

Wang X. (2010). Financial Management in the Public Sector: Tools, Applications, and Cases. Armonk, New York, NY: M.E. Sharpe.