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Deciding how to efficiently distribute limited financial
resources is an important challenge in all organizations. In most large
and complex organizations, this task would be nearly impossible without
budget analysts. These workers play the primary role in the
development, analysis, and execution of budgets, which are used to
allocate current resources and estimate future financial requirements.
Without effective budget analysis and feedback about budgetary
problems, many private and public organizations could become bankrupt.
Budget analysts can be found in private industry, nonprofit organizations, and
the public sector. In private sector firms, a budget analyst examines,
analyzes, and seeks new ways to improve efficiency and increase
profits. Although analysts working in nonprofit and governmental
organizations usually are not concerned with profits, they still try to
find the most efficient distribution of funds and other resources among
various departments and programs.
Budget analysts have many responsibilities in these organizations, but their primary task is
providing advice and technical assistance in the preparation of annual
budgets. At the beginning of each budget cycle, managers and department
heads submit proposed operational and financial plans to budget
analysts for review. These plans outline prospective programs,
including proposed funding increases and new initiatives, estimated
costs and expenses, and capital expenditures needed to finance these
Analysts examine the budget estimates or proposals
for completeness, accuracy, and conformance with established
procedures, regulations, and organizational objectives. Sometimes, they
employ cost-benefit analysis to review financial requests, assess
program tradeoffs, and explore alternative funding methods. They also
examine past and current budgets and research economic and financial
developments that affect the organizationís spending. This process
enables analysts to evaluate proposals in terms of the organizationís
priorities and financial resources.
After this initial review process, budget analysts consolidate the individual departmental
budgets into operating and capital budget summaries. These summaries
contain comments and statements that support or argue against funding
requests. Budget summaries then are submitted to senior management or,
as is often the case in local and State governments, to appointed or
elected officials. Budget analysts then help the chief operating
officer, agency head, or other top managers analyze the proposed plan
and devise possible alternatives if the projected results are
unsatisfactory. The final decision to approve the budget, however,
usually is made by the organization head in a private firm or by
elected officials, such as the State legislative body, in government.
Throughout the remainder of the year, analysts periodically monitor the budget by
reviewing reports and accounting records to determine if allocated
funds have been spent as specified. If deviations appear between the
approved budget and actual performance, budget analysts may write a
report providing reasons for the variations, along with recommendations
for new or revised budget procedures. In order to avoid or alleviate
deficits, they may recommend program cuts or reallocation of excess
funds. They also inform program managers and others within their
organization of the status and availability of funds in different
budget accounts. Before any changes are made to an existing program or
a new one is implemented, a budget analyst assesses the programís
efficiency and effectiveness. Analysts also may be involved in
long-range planning activities such as projecting future budget needs.
The amount of data and information that budget analysts are able to analyze
has greatly increased through the use of computerized financial
software programs. The analysts also make extensive use of spreadsheet,
database, and word processing software.
Budget analysts have seen their role broadened as limited funding has led to downsizing and
restructuring throughout private industry and government. Not only do
they develop guidelines and policies governing the formulation and
maintenance of the budget, but they also measure organizational
performance, assess the effects of various programs and policies on the
budget, and help to draft budget-related legislation. In addition,
budget analysts sometimes conduct training sessions for company or
government agency personnel regarding new budget procedures.