Four Subsystems of Budget Execution; Book Review
Tax Administration
In reference to chapter 11 on tax administration in the budgeting system, collection of local revenues is the best practice carried in accomplishing the task. Local revenue budgeting serves as one of the most visible as well as essential element of the first national property tax structure. The chapter suggests that it is the best in scheduling the country’s outlay law. However, it is not only a planning tool plus a way to explain how the community objectives levels of services should be met but also serves as a point of engagement with the taxpayers as well as individuals who will at providing inputs on how the budget resources are allocated (Lee, Johnson & Joyce, 2013).
Local revenues are highly affected by the economic technology despite being the best element in taxation administration. It is also artificial by the technology as well as demographic changes due to their frankness to the external surrounding, efficiency of the income scheme plus their administrative of the political accountability. The major literature on taxation assemblies considers the possibility that tax decision on local revenues may be influenced by decisions made in other prerogatives (Lee, Johnson & Joyce, 2013).
Intra-soft revenue solution appears as the best resolution to the current challenges faced by local, state as well as national tax and revenue agencies. The solution encompasses a set of highly configurable, best for taxation applications which are developed explicitly for the public segment. The book suggests that Intra-soft system ensures there are better planning, programming as well as projecting in the budgeting system through collection of local revenue (Lee, Johnson & Joyce, 2013).
Cash Management
The books provides much detail on cash flow in the budgeting system thereby, it main purpose is controlling the spending in the amassed, implementing the budget efficiency, reducing the cost of government borrowings as well as reduction of the prospect cost of incomes. Controlling the cash flow is the key element in the macroeconomic budget control thus; it must be conducted by an adequate classification of handling obligation. In the budgeting scheme it is necessary to reduce the transaction cost as well as borrowing at the lowest rates in order to generate additional cash on investment. The control of cash flow opts to involve the reduction of interludes between the times when cash is received as well as when it is ready for carrying out outflows. In order to avoid delays in the cash flow they should be a penalty applied on the taxpayers (Lee, Johnson & Joyce, 2013).
Cash flow experiences various challenges especially where there is an economic boom thus; business experience cash flow difficulties. In such situations entrepreneurs and managers can take various steps in preventing the impact brought about by the economic bang. The other challenge related to cash flow is risk that comes along with debt thereby; the management opts to establish an adequate mix of these instruments which must be based on the needs of investors. According to the book debt management has got two main aspects which involve, the Central bank borrowing operations which is part of the fiscal strategy. For the budgeting system to be successful through the cash flow system, debts must be avoided by offering adequate support arrangements as well as controlling the monetary authorities (Lee, Johnson & Joyce, 2013).
Procurement
In reference to chapter 11, procurement in the budgeting system has got various elements but defining the business need is the key component to consider. The management needs to understand what fundamental business requirement as well as solution. The business budget requires control which involves monitoring the implementation of the plan plus taking the corrective activity required. The business control process is continuous since it is possible in predicting the timing impact of external surrounding. Controlling the budgeting system involves documentation which is the assumption as well as specific plans reflected in the master budgeting (Lee, Johnson & Joyce, 2013).
The book provides various challenges procurement in budgeting system faces which includes; insufficient supply’s where several procurement decisions correlate to a company’s risk management strategy. Suppliers who recognize the management risk strategy accommodates a purchasing company’s needs to maximize their performances. After a research on the business competitors the procurement approach need to evaluate the available solution. The procurement transactions which exceed the budgeting system are not due to the reckless spending bud due to the available communication gap and it should be addressed to avoid misunderstanding to the management (Lee, Johnson & Joyce, 2013).
The article suggests that procurement practice comes along with critical challenges such as fraud, waste as well as scandals thereby; the management should take control of the illegal practices for a successful budgeting process. The business budget requires control which involves monitoring the implementation of the plan plus taking the corrective activity required. Procumbent process opts to be addressed effectively especially while making decision which correlates the corporation’s jeopardy administration (Lee, Johnson & Joyce, 2013).
Risk Management
In the risk management process of budgeting has several elements but the article suggests that evaluations of risk serve as the key elements. Considering the urgencies identified in the article evaluation of the risks decides on the appropriate responses. It is the responsibility of professional organisation to decide on whether to accept the menace based on valuation on either the risk is anticipated or undesirable. According to the article desirable risk opts to receive the entity’s business model. Risk should be addressed as soon as possible since they can appear from several sources including the financial economy. Risk sources in budgeting system should be identified as well as located in human factor variables for the purpose of reliable decisions (Lee, Johnson & Joyce, 2013).
Even the most sensibly planned project run in distress thereby; risk is any uncertain event or condition which might affect the organization project. Risk management take into account potential challenges thus considers the possible outcome. Jeopardy supervision faces hitches in assigning incomes thus; this is the idea of outlook fee. Commercial incomes disbursed on risk organisation which could have been spent on more portable activities. There are various solutions in solving risk management challenges where the article suggest that once a risk have been identified it must be addressed as to it potential severity of impact which might involve damage and loss. According to the article there are key difficulties in the risk management process which comes along with the determination of occurrence rate, this happens due to an accuracy of the statistical data provided especially concerning the past details (Lee, Johnson & Joyce, 2013).
References
Lee, R. D., Johnson, R. W., & Joyce, P. G. (2013). Public budgeting systems. Burlington, MA: Jones & Bartlett Learning.
