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REQUIRED

A. explain the operational and behavioral benefits that generally attributed to a participative budgeting

b. identify deficiencies in Wagner's participative budgetary policy for planning and performance evaluation purpose. for each deficiendcy identified, recommended how the deficiencey can be corrected.

lilipiuyees respond more favorably when they participate in the dsetary process. Kevin Dobbs, treasurer of Systematic Designs, agrees that budgeting is essen- budgetary for overall organization success, but he argues that human resources are too valuable to spend much time planning and preparing the budgetary process. He thinks that the roles people play in budgetary Required Contrast the participative versus imposed budgeting concepts and indicate how the ideas of Jones and Dobbs fit the two categories getary preparation are not important in the final analysis of a budget's effectiveness. Behavioral Considerations and Budgeting thony Wagner, the controller in the Division of Transportation for the state, recognizes the im ance of the budgetary process for planning, control, and motivation purposes. He believes that roperly implemented participative budgeting process for planning purposes and a management 05 reporting procedure based on that budget will motivate his subordinates to i by exception productivity within their particular departments. Based on this philosophy, Wagner has impl mented the following budget procedures mprove An appropriation target figure is given to each department manager. This amount is the maximum funding that each department can expect to receive in the next fiscal year Department managers develop their individual budgets within the following spending constraint as directed by the controller's staff . Expenditure requests cannot exceed the appropriation target 2. All fixed expenditures should be included in the budget: these should include items such . . as contracts and salaries at current levels 3. All government projects directed by higher authority should be included in the budget in their entiret The controller consolidates the departmental budget requests from the various departments into one budget that is to be submitted for the entire division . Upon final budget approval by the legislature, the controller's staf allocates the appropriation to the various departments on instructions from the division manager. However, a specified percentage of each department's appropriation is held back in anticipation of potential budget cuts and special funding needs. The amount and use of this contingency fund are left to the discretion of the division manager Each department is allowed to adjust its budget when necessary to appropriation level. However, as stated in the original directive, specific projects authorized b higher authority must remain intact. The final budget is used as the basis of control for a management by exception form of reporting. Excessive expenditures by account for each department are highlighted on a monthly basis. Department managers are expected to account for all expenditures over budget. Fiscal responsibility is an important factor in the overall performance evaluation of department managers .Each department is allowed to adjust its budget when necessary to operate within the reduced Wagner believes that his policy of allowing the department managers to participate in the budget process and then holding them accountable for their performance is essential, e these times of limited resources. He also believes that department mana tivated to increase the efficiency and effectiveness of their departments because they have provided nput into the initial budgetary process and are required to justify any unfavorable performances specially during gers will be positively mo- t