“Ad Hoc Scoring Rules” 1.) Definition: What is meant by “ad hoc budgeting”? 2.)
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Question
“Ad Hoc Scoring Rules”
1.) Definition: What is meant by “ad hoc budgeting”?
2.) Rationale: Why are ad hoc rules used in budgeting?
3.) Pros and Cons: Describe at least one positive aspect of ad hoc budgeting and one negative aspect of ad hoc budgeting in two separate paragraphs.
4.) Connection to Value: Consider the underlying values of public affairs (including transparency, accountability, fairness, and efficiency). Choose one such value (you can select from the list here), and identify it clearly. Then, discuss how ad hoc budgetary decision making either supports or undermines that value.
Explanation / Answer
Ad hoc budgeting means: Creating budgets for organizations is a lengthy process that requires the input of multiple departments or review sources. Balancing the needs of the organization or governmental agency with often limited funds necessitates firm decision making and a review of services, departments or programs. An ad hoc budget is a temporary planning budget created for budget committees or groups. This budget is often preliminary and is generally used as a starting point for discussions and adjustments.Ad hoc budgets may be drafted from prior period budgets, submitted budget proposals or professional financial analysis. The creation process identifies sources of income and required budgetary needs based on contractual or established expense records. Often, these budgets are heavily notated as to how figures were derived and where estimates were used. Ad hoc budgets may be done on a routine basis as part of a yearly budgeting process, or may be requested as needed for project planning needs. Ad hoc budgets outline fixed costs, capital costs and variable costs. These cost elements are divided into categories. Revenues and all income sources are also presented by category. The income is a projection of incoming revenue that is calculated from prior income history. The calculation method and assumptions are often included in an ad hoc budget to help committee members understand the strengths and weaknesses of the budget. An ad hoc budget can be drafted for any period of time, but this is generally dictated by the function it serves. Common budget time lines include a fiscal year for an organization and a project-based time line for special projects. An ad hoc budget needs supporting documentation for nonstandard formulas and any assumptions used to calculate the financial totals presented. The documentation is essential during budget reviews to help answer questions and drill down into specific categories for further review.
AD HOC RULES USED IN BUDGETING:
1) FOCUS ON THE DEBT FIRST
2) TRACK THE SPENDING FOR A GIVEN PERIOD OF TIME.
3) USING OF TECHNOLOGY.
4) SAVE FIRST, THEN SPEND
Positive aspect of ad hoc budgeting:
Negative aspects of ad hoc budgeting:
CONNECTION TO VALUE: One such value that we will choose is the TRANPARENCY. Transperency is the most important criteria in AD HOC BUDGETING. There should be some clarity about the use of public funds is necessary so that public representatives and officials can be accountable for effectiveness and efficiency. An open and transparent budget process fosters trust in society that people’s views and interests are respected and that public money is used well.Transparent and inclusive budgeting supports better fiscal outcomes and more responsive, impactful and equitable public policies. As far as we are concerned, we cannot undermine tranperency in ad hoc budgeting decision. As because ad hoc budgeting is more about than tranperency so, ad hoc budgeting decisions cannot undermine transperency. It is one of the most important tool in ad hoc budgeting.
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