Showing posts with label Budget. Show all posts
Showing posts with label Budget. Show all posts

Reinventing Government: Concept, Achievement and Features of Reinventing Government

Concept / Introduction

In the early 1990s, when American governments were plagued by a series of shortcomings, some innovative and exemplary institutions emerged outside the public sector. Those organizations were fast, decentralized, up-to-date and work-oriented. They were also flexible and adaptable (able to adapt to new changes). They also used competitive, customer-oriented and non-staffed mechanisms to get the job done. 

Versalia, California, etc. had a clear impact on this entrepreneurship. The product of these things began to be applied in the public sector as a Reinventing Government. As this method and procedure leads to annual budget lapse, it also eliminates the need to spend budget money anyway at the end of the year and encourages managers to save budget. This budget money is ours and the feeling of spending it like this was awakened.

Budget system related to expenditure control was implemented. At the same time, with the change in the environment, the management has started to provide the facility to change. The line item budget system was removed and administrators were given the right to spend where required. The saved budget amount was also given the right to be spent next year, even in new priorities. Many such examples (Versalia, California) began to be found in the USA and ideas regarding Reinventing developed.

Reflecting on such things, after various studies, researches and investigations in 1992, the scholarly authors Osborne and Gaebler published a practical book with the idea that Reinventing should be done. According to these writers, the government can still do better than the market system and the government or the bureaucracy is neither necessary nor efficient, so the government (administration) must be Reinventing.

The book contains time-relevant chapters and introduces it as an American Perestroika. Other chapters include Reinventing Government as Anticipatory Government, Catalytical Government, Community-owned Government, Competitive Government, Customer-driven Government, Enterprising Government, Mission -driven Government, Decentralized Government, Result-oriented Government, Market-oriented Government etc.

10 points of Reinventing Government
  1. Entrepreneurial government will also implement and encourage competition among service providers.
  2. To bring the powers of government to the people or to empower the people. Empower rather than serve.
  3. Performance should not be input -oriented but result - oriented i.e. result should be good.
  4. Entrepreneurial government should move from process oriented administration to its mission.
  5. Entrepreneurial government meets the needs of customers and not bureaucracy. Therefore, with the choice, the public was called customer instead of client.
  6. Providing service before arising any problems.
  7. Entrepreneurial government should focus on earning rather than spending.
  8. They decentralized authority; Embrace simple management and team work system.
  9. In the process of providing services and facilities to the people, the market mechanism has been promoted rather than the bureaucracy. This is an attempt to bring change in the market.
  10. The government will play a catalytic role among the private, public and voluntary organizations in the society to solve the problems of the people's community. 

These 10 principles are an inseparable collective concept. The authors seem to have the idea that they do something even if they do not solve many problems.

Achievements / Features of Reinventing Government
  • Expenditure controlled budget system has been implemented.
  • The management has provided the facility to change with the change in the environment.
  • Line item budget system was removed and administrators were given the right to spend where required.
  • The saved budget amount was carried towards next year and given right to be spent on new priorities.

Some Examples for Reinventing Government
  • America has the worst public school even the world is so developed.
  • Courts and prisons are overcrowded.
  • Formerly worth doing or proud states and cities have actually gone bankrupt. In addition, millions of employees were laid off and billions of budget deficits or those states started running deficit budgets.
  • Accused persons / criminals started walking openly.
  • Very good and enterprising people do not want to come into government service. According to a survey conducted in the late 1980s, only 5% of people want to come into government service.
  • Thousands of Americans are homeless.
  • Millions of American children do not have health insurance, meaning they are deprived of health care.

You may also like to read:

Budgetary Control

Budgetary control compares actual project expenditure with budgeted expenditure. Actions are taken to correct deviations.
  • Budget: A budget is a statement of future expenditures for planning and controlling project's financial resources. It focuses on input control. Activities are controlled before the operations start.
Types of Budgets
Project Budgets can be of three types:
  1. Operating Budgets: They consist of plans for the use of raw materials, goods and services. They specify quantity and costs.
    • A unit becomes a responsibility center if a single manager is responsible for its operations. Based on the concept of responsibility, operating budgets can be a cost center.
    • Cost center has its own budget and the unit manager is responsible for controlling costs. Cost centers are concerned with input costs.
  2. Financial Budgets: They consist of plans for spending and mobilizing financial resources. They ensure that project funds will be available when required. They can be :
    • Cash Budget: It estimates cash flow on a daily or weekly basis. Surpluses and shortfalls of cash can be managed by this budget.
    • Capital Expenditure Budget: It is a plan for investment in capital assets, such as building, equipment, etc. It involves sizable financial commitment over project period.
    • Master Budget: It integrates all operating and financial budgets of the project.
    • Programme Budget: (PPBS: Planning, Programming Budgeting System):
      • PPBS is Planning, Programming Budgeting System is also known as Programme Budgeting. In Economics, it is known as Output Budgeting.
      • PPBS was first introduced n US Department of Defence in 1961. In 1966, the US government adopted PPBS in all its departments and agencies. At present, PPBS is widely used by many countries and organization.
      •  PPBS allocates budget in terms of programmes and projects. Cost allocation is related to outputs rather than inputs. Traditional budgeting allocated costs according to line items, such as salaries, maintenance, equipment etc. PPBS allocates budget according to programmes which consist of a bundle of projects.
      • PPBS is based on system analysis.
It consists of four steps:
  1. Goals and priorities of each programme or project are clearly identified.
  2. Success of each programme or project in achieving its goals is reviewed.
  3. Costs of each programme or project till the end of its life.
  4. Each programme or project is selected for continuation or rejection on the basis of its effectiveness in achieving its objectives.
    • Projects make up the programme. PPBS approach is useful in project management. It is mainly needed for allocating resources to projects. It is an important tool for decision making regarding continuation or dropping of a project. It can also be used for project cost control.