DOES LOCATION MATTER? BUDGET FUNCTION LOCATIONS AND …

DOES LOCATION MATTER? BUDGET FUNCTION LOCATIONS AND THE USE OF

MANAGEMENT TOOLS

By

AMANDA KAUFMAN

A paper submitted to the faculty of

The University of North Carolina at Chapel Hill

in partial fulfillment of the requirements for the degree

Master of Public Administration

SPRING 2011

This paper represents work done by a UNC-Chapel Hill Master of Public Administration student.

It is not a formal report of the School of Government, nor is it the work of School of Government faculty.

Executive Summary

The organizational location of the budget function varies in local governments, with four

common locations being within finance, administrative services, an independent office, or as a

subunit of the mayor’s or manager’s office. This paper examines the relationship between these

locations and management tools, such as performance measurement and strategic planning, used

during the budget process. Results show that, as a whole, the use of management tools is not

significantly impacted by the location of the budget function.

1

Introduction

Budgeting is an important function in local government, as it reflects organizational priorities and

determines the allocation of resources. “The budget process is the one common thread that links the parts

of the organization together,” (Bland 2007, 3). The organizational location of the budget function varies

among local governments. Four common organizational locations of this function include a finance

department, an administrative services department, an independent office, and a subunit of the mayor’s or

manager’s office. Little is known about how the budget process of development, implementation, and

evaluation is affected by the organizational placement of the budget function.

Background

While very little literature exists on the organizational location of the local government budget function,

literature discussing its internal operations has linked differences among local governments to the

organizational placement of the function. As the budget function moves away from a location in a

finance department, or as the population of the jurisdiction increases, the literature broadly describes the

focus of the local government budget function as changing from financial accountability to policy

development. This is demonstrated in Figure 1.

Literature has addressed distinctions between certain management tools used in local government

budgeting and the correlation with population. A 1996 survey of 510 jurisdictions found that while most

budget functions (67 percent) were placed within a finance department, as the population increased, it was

more likely to be placed in a separate office and report directly to the chief executive (O’Toole, Marshall,

and Grewe 1996, 25-29). Figure 11

Similarly, a 1985 survey of

551 jurisdictions found that

those with greater

populations were more likely

to have a budget director

(Peterson, Watt, and Zorn

1986, 30). A survey of 10

large jurisdictions,

conducted in 1999 by the

GFOA Consulting and

Research Center, found that

large jurisdictions utilize nearly the same management tools in budgeting (Michel 2002, 20-25). The

aforementioned 1996 survey found that most jurisdictions, regardless of size, participate in revenue

forecasting, but that larger jurisdictions are more likely than smaller jurisdictions to have performance

measures and to monitor efficiency and effectiveness. The study recognized the greater capacity of larger

jurisdictions as a potential explanation of these differences (O’Toole, Marshall, and Grewe 1996, 26).

Other literature has attempted to explain differences in the use of management tools in local government

budgeting through the organizational location of the budget function. A 2003 Government Finance

Review article stated policy-oriented budget functions are likely placed under the chief executive, while

more administrative functions are likely located in a finance department (Christensen, McElravy, and

Miranda 2003, 20). Organization and Design of an Effective Budget Function, a GFOA publication,

stated that the local government budget function location could be arranged on a spectrum, where at one

end, it mainly acts as a facilitator of the budget process, but has an increasing role in budgeting as it

1 Organizational Location and Core Values adapted from Bland, Robert L. 2007. A Budgeting Guide for Local

Government. Washington, DC: International City/County Management Association.

Population adapted from various sources; refer to sources discussed in the second paragraph under “Background.”

2

moves across the spectrum. For instance, budget functions located within the mayor’s or manager’s

office are likely oriented around policy and politics, while budget functions within finance or

administrative services departments are more separated from policy and politics, and instead focus on

technical or management-related issues (Michel 2002, 9, 27-32). Robert Bland defined the core values

and primary focus of the budget function within the context of its organizational placement in a local

government. He stated in his recent ICMA publication that, “the most fundamental issue for the manager

is the organizational placement of the budget function,” (2007, 29-32).

“Few large-scale studies exist on the responsibilities given to budget offices in actual practice,” (Michel

2002, 20). While existing studies point to various relationships between the use of certain management

tools in local government budgeting and the organizational location of the budget function, there is no

study that focuses primarily on the significance of the budget function location. The aim of this study is

to better understand how management tools are used during the budget process, and how the

organizational location of the budget function may impact the use of such tools. For this study, the

budget process was defined as development, implementation, and evaluation. The information gathered

also provides an inventory of current municipal budgeting practices. Specifically, the research question is

as follows:

Does the organizational placement of the local government budget function have an

impact on the use of management tools during the budget process?

Methodology

The organizational location of the budget function was condensed into four common locations for this

study: 1). Finance Department; 2). Administrative Services Department; 3). Independent Office; and 4).

Subunit of the Mayor’s or Manager’s Office. Research has shown that the use of certain management

tools differs between municipal and county organizations (Poister and Streib 1999). To ensure

consistency among observations, this study focused specifically on local governments at the municipal

level. All municipal governments with populations exceeding 20,000 in 12 southeastern states had the

opportunity to participate; according to 2009 population estimates from the U.S. Census Bureau, this

included a total of 366 municipalities. Municipalities with populations below 20,000 were not included in

this analysis, because small local governments often prepare the budget with staff members that have

multiple roles and overlapping responsibilities (Sokolow and Honadle 1984).

To examine how the four locations impact the use of management tools during the budget process, an

online survey was distributed to the 366 municipalities.2 Based on information available on the websites

for each municipality, surveys were sent to the email address of the individual most associated with the

budget function. In the few instances where such information was unavailable, the survey was instead

emailed to the manager, mayor, or to the general address listed for the municipality. The anonymous

survey was short, consisting of 11 multiple-choice questions; it included one question regarding the

organizational location of the budget function, one regarding the size of the jurisdiction, and eight

questions inquired about the extent to which various management tools are used during the budget

process. These management tools included financial forecasting, financial condition, budgeting for

capital, performance measurement, performance budgeting, program evaluation, policy analysis, and

strategic planning. An additional question pertaining to the GFOA Distinguished Budget Presentation

Award also was included.3

2 See Appendix I for response rates by population grouping and state.

3 See Appendix II for the full survey.

3

Table 1

Duplicate responses, based on IP addresses, and responses with less than one question answered were

removed from the analysis. West Virginia had a disproportionately low response rate in comparison to

the other 11 states, so it was also removed from the analysis.4 The survey yielded 248 unique and usable

responses for a total response rate of 68.7 percent.

The independent variable for this analysis was the organizational location of the budget function. The

dependent variables were the eight management tools used during the budget process and whether the

GFOA Distinguished Budget Presentation Award had been received. The data were analyzed using

crosstabs and chi-squares to determine significant relationships between the organizational location of the

municipal budget function and any of the dependent variables. The significance threshold was set at p <

.10, providing 90 percent confidence that p values below .10 show statistical significance.5

Findings

Table 1 shows the location of the

budget function as reported by survey

respondents. Finance departments are

the primary location of the budget

function, affirmed by 65.7 percent of

respondents. Location in an

administrative services department,

independent office, or as a subunit of

the mayor’s or manager’s office,

yielded significantly lower

frequencies, with respondents reporting organizational placement in each at 10.5, 6.9, and 16.9 percent,

respectively. All municipality sizes were well represented in these results,6 and budget function locations

were distributed across all population groupings.7 A correlation test was used to determine whether

population was driving the organizational location of the budget function. A very low correlation was

produced at .14, indicating weak to no association between population and budget function location.8

While the current assumption is that larger jurisdictions tend to have budget functions located outside of

the finance department, the analysis found weak evidence of this.

Overall, the location of the municipal budget function does not appear to impact the management tools

used during the budget process. Using chi-squares to analyze each of the eight management tools against

the location of the budget function, statistical significance for only two tools was produced. The variable

for performance measures was statistically significant at p < .05, while the variable for performance

budgeting had a statistical significance at p < .10.9

The analysis shows that there is no statistically significant relationship between the organizational

location of the budget function and the extent to which the six remaining management tools are used

4 This reduced the total included survey recipients from 366 to 361.

5 A separate chi-square was used to analyze the relationship between budget function location and each of the

management tools. If the resulting p value was less than .10, there was a statistically significant relationship

between location and the use of the management tool. If the p value was above .10, there was no statistically

significant relationship between the location and the use of the management tool.

6 See Appendix I, Table 1.

7 See Appendix III

8 A value below zero indicates a negative relationship, while a value above zero indicates a positive relationship. A

value close to zero indicates weak to no association. This correlation produced a positive relationship with weak to

no association.

9 See Appendix IV for full crosstab output for each of the management tool variables.

Budget Function Location Frequency Percent

Finance Department 163 65.7

Administrative Services Department 26 10.5

Independent Office 17 6.9

Subunit of Mayor’s or Manager’s Office 42 16.9

4

during the budget process. The use of financial forecasting, financial condition, budgeting for capital,

program evaluation, policy analysis, and strategic planning during the budget process are not significantly

impacted by the organizational location of the budget function. This rejects the notion that the location of

the budget function shapes its focus.

For example, strategic planning as a management tool has been assumed to be most prevalent in budget

functions at the far end of the spectrum. Literature has described budget functions organizationally

placed as subunits of the mayor’s or manager’s office or in independent offices, as being better positioned

for activities related to strategic planning, like priority setting and policy development (Christensen,

McElravy, and Miranda 2003, 20; Michel 2002, 35-37). Bland placed strategic planning as an activity

associated with the core value of policy development, organizationally located within the chief

executive’s office, referred to in this study as a subunit of the mayor’s or manager’s office (2007, 30).

This analysis, however, shows that strategic planning is not significantly impacted by the organizational

location of the budget function. This is consistent with literature conveying that strategic planning is

becoming a professional norm, with local governments using this management tool, regardless of

population (Rivenbark 2003; 2007).

The location of the budget function had the most statistically significant relationship with performance

measures as a management tool used during the budget process at p < .05. As shown in Table 2, budget

functions placed within independent offices are most likely to use performance measures, as no

respondents in this location reported that performance measures have not yet been implemented, and over

88 percent reported that tracking and reporting performance measures is required of the departments.

When moving from the results of performance measures to performance budgeting, there is a noticeable

decline in the use of performance measures in budgeting for all four organizational locations, as depicted

in Table 3. While over 88 percent of independent offices reported that departments are required to track

and report performance measures, less than half (41.2 percent) use performance measures for

departmental or organizational decision-making during the budget process. Across all locations, only

22.7 percent reported that performance measures have not yet been implemented in the organization, but

Performance Measures

Finance

Department

Administrative

Services

Department

Independent

Office

Subunit of

Mayor’s or

Manager’s

Office

Count % Count % Count % Count % Total

Performance measures have not yet been

implemented 37 22.7 5 20.0 - - 14 33.3 22.7%

Performance measurement is voluntary 48 29.4 5 20.0 2 11.8 10 23.8 26.3%

Departments are required to track/report

performance measures 78 47.9 15 60.0 15 88.2 18 42.9 51.0%

Performance Budgeting

Finance

Department

Administrative

Services

Department

Independent

Office

Subunit of

Mayor’s or

Manager’s

Office

Count % Count % Count % Count % Total

Line item budgeting is primarily used for

budget development 92 56.4 11 44.0 4 23.5 22 52.4 52.2%

Performance measures are reported in

the budget document 43 26.4 7 28.0 6 35.3 8 19.0 25.9%

Performance measures are used for

departmental/organizational decision-

making

28 17.2 7 28.0 7 41.2 12 28.6 21.9%

Table 2

Table 3

5

over 52 percent of the municipalities primarily use line item budgeting for budget development. This

may indicate that, while municipalities are tracking and reporting performance measures, not all of them

are using these measures to inform decision-making during the budget process. A 1996 study found that

only 31 percent of jurisdictions that had performance measures found them to be a useful tool for

decision-making during the budget process (O’Toole, Marshall, and Grewe 1996, 28). This also affirms

previous findings that found the use of performance measures was not an indication that they were also

being used during the budget process (O’Toole and Stipak 2002; Kelly and Rivenbark 2002).

Capacity may be one plausible explanation as to why performance measures and performance budgeting

have the highest presence in independent offices. Successful implementation of performance measures

and their use in decision-making requires participation across the organization. Placement of the budget

function in an independent office with departmental status may better position it to promote and

implement these management tools within the organization.

While not a management tool, the survey also included a question on whether the municipality had

received GFOA’s Distinguished Budget Presentation Award. The relationship between the budget

function location and the award was significant at p < .05.10

The budget functions within finance and

administrative services departments were split fairly evenly between having received and not having

received the award. Independent offices, however, were more likely to have received the award (82.4

percent), while those located within a subunit of the mayor’s or manager’s office were more likely to have

not received it (63.4 percent). Because criteria for this award includes performance measures and

linkages of unit goals and objectives to those of the overall organization, this finding may be related to the

use of performance measures and performance budgeting (GFOA 2011). If performance measures have

not been implemented, and if unit goals and objectives are not linked to those of the overall organization,

it becomes more difficult to receive this award.

Conclusion

Overall, this study did not find a significant relationship between management tools used during the

budget process and the organizational location of the municipal budget function. It also did not find a

strong correlation between the population of a municipality and the organizational location of its budget

function.

A plausible explanation for these findings may be that as leading professional organizations, including

GFOA and ICMA, and MPA programs continue to promote and offer training on these management

tools, they may be becoming the professional norm for local governments, regardless of population or

organizational location of the budget function.

The results from this study are important to understanding the current state of local government budgeting

by creating a new understanding of how management tools are being used in practice. Therefore, the

organizational location of the budget function may no longer be a fundamental issue for the manager, as

described by Bland (2007, 30). Rather, the critical managerial issue may be to build the innovative

capacity within the budget function, regardless of its location.

10

See Appendix V for the crosstab output.

References

Bland, Robert L. 2007. A Budgeting Guide for Local Government. Washington, DC: International City/County Management Association.

Christensen, Peter, Jeff McElravy, and Rowan Miranda. 2003. “What’s Wrong With Budgeting?: A Framework for Evaluating and Fixing Public Sector Financial Planning Processes.” Government Finance Review 19 (5): 11-20.

Government Finance Officers Association. 2011. “GFOA Detailed Criteria Location Guide: Distinguished Budget Presentation Awards Program.” Government Finance Officers Association. http://www.gfoa.org/index.php?Itemid=57&id=33&option=com_content&task=view (March 13, 2011).

Kelly, Janet M., and William C. Rivenbark. 2002. “Reconciling the Research: Municipal Finance Officers on the Role of Performance Data in the Budget Process.” Public Administration Quarterly 26 (2): 218-233.

Michel, R. Gregory. 2002. Organization and Design of an Effective Budget Function. Chicago: Government Finance Officers Association.

O’Toole, Daniel E., James Marshall, and Timothy Grewe. 1996. “Current Local Government Budgeting Practices.” Government Finance Review 12 (6): 25-29.

O’Toole, Daniel E., and Brian Stipak. 2002. “Productivity Trends in Local Government Budgeting.” Public Performance & Management Review 26 (2): 190-203.

Poister, Theodore H., and Gregory Streib. 1999. “Performance Measurement in Municipal Government: Assessing the State of the Practice.” Public Administration Review 59 (4): 325-335.

Peterson, John E., Pat Watt, and Paul Zorn. 1986. Organization and Compensation in Local Government Finance. Chicago: Government Finance Officers Association.

Rivenbark, William C. 2003. “Strategic Planning and the Budget Process: A Survey of Municipal Government.” Government Finance Review 19 (5): 22-27.

Rivenbark, William C. 2007. “A Manager’s Toolbox.” In Managing Local Government Services: A Practical Guide, ed. Carl W. Stenberg and Susan Lipman Austin. Washington, DC: International City/County Management Association.

Sokolow, Alvin D., and Beth Walter Honadle. 1984. “How Rural Local Governments Budget: The Alternatives to Executive Preparation.” Public Administration Review 44 (5): 373-383.

U.S. Census Bureau, Population Division. 2010. Annual Estimates of the Resident Population for Incorporated Places in Alabama: April 1, 2000 to July 1, 2009 (SUB-EST2009-04-01).

U.S. Census Bureau, Population Division. 2010. Annual Estimates of the Resident Population for Incorporated Places in Arkansas: April 1, 2000 to July 1, 2009 (SUB-EST2009-04-05).

U.S. Census Bureau, Population Division. 2010. Annual Estimates of the Resident Population for Incorporated Places in Florida: April 1, 2000 to July 1, 2009 (SUB-EST2009-04-12).

U.S. Census Bureau, Population Division. 2010. Annual Estimates of the Resident Population for Incorporated Places in Georgia: April 1, 2000 to July 1, 2009 (SUB-EST2009-04-13).

U.S. Census Bureau, Population Division. 2010. Annual Estimates of the Resident Population for Incorporated Places in Kentucky: April 1, 2000 to July 1, 2009 (SUB-EST2009-04-21).

U.S. Census Bureau, Population Division. 2010. Annual Estimates of the Resident Population for Incorporated Places in Louisiana: April 1, 2000 to July 1, 2009 (SUB-EST2009-04-22).

U.S. Census Bureau, Population Division. 2010. Annual Estimates of the Resident Population for Incorporated Places in Mississippi: April 1, 2000 to July 1, 2009 (SUB-EST2009-04-28).

U.S. Census Bureau, Population Division. 2010. Annual Estimates of the Resident Population for Incorporated Places in North Carolina: April 1, 2000 to July 1, 2009 (SUB-EST2009-04-37).

U.S. Census Bureau, Population Division. 2010. Annual Estimates of the Resident Population for Incorporated Places in South Carolina: April 1, 2000 to July 1, 2009 (SUB-EST2009-04-45).

U.S. Census Bureau, Population Division. 2010. Annual Estimates of the Resident Population for Incorporated Places in Tennessee: April 1, 2000 to July 1, 2009 (SUB-EST2009-04-47).

U.S. Census Bureau, Population Division. 2010. Annual Estimates of the Resident Population for Incorporated Places in Virginia: April 1, 2000 to July 1, 2009 (SUB-EST2009-04-51).

U.S. Census Bureau, Population Division. 2010. Annual Estimates of the Resident Population for Incorporated Places in West Virginia: April 1, 2000 to July 1, 2009 (SUB-EST2009-04-54).

Appendix I

Table 1: Response Rate by Population Grouping

Table 2: Response Rate by State

State Emailed Respondents Response Rate (%)

Alabama 28 16 57.1 Arkansas 22 17 77.3 Florida 102 73 71.6 Georgia 36 24 66.7 Kentucky 18 13 72.2 Louisiana 16 7 43.8 Mississippi 19 10 52.6 North Carolina 44 32 72.7 South Carolina 20 14 70.0 Tennessee 30 26 86.7 Virginia 26 16 61.5 Total 361 248 68.7

Population Emailed Respondents Response Rate (%)

Below 25,000 76 37 48.7 25,000-50,000 142 110 77.5 50,000-75,000 59 41 69.5 75,000-100,000 24 14 58.3 100,000-150,000 20 15 75.0 150,000 and Above 40 29 72.5 Missing - 2 - Total 361 248 68.7

Appendix II

According to the organizational chart, which of the following best describes the location of the budget function in your municipality? (Please select one)

The budget function is part of the Finance Department, along with other financial activities. An example of another financial activity included in this department would be accounting.

The budget function is part of an Administrative Services Department, where the Administrative Services Director holds department director status and is responsible for additional activities. Examples of additional activities included in this department would be human resources and fleet management.

The budget function is an independent office with departmental status.

The budget function is part of the Mayor or Manager's Office, and functions as a subunit of the chief executive. Which of the following best describes financial forecasting in your municipality? (Please select one) Financial forecasting focuses primarily on revenues and expenditures for the forthcoming budget year.

Financial forecasting focuses primarily on revenues and expenditures for the forthcoming budget year, and

multi-year forecasting is prepared on an as-needed basis.

Financial forecasting that focuses on revenues and expenditures is prepared for the forthcoming budget year, and multi-year forecasting is prepared as part of the municipality's routine work plan. It is regularly monitored and updated.

Which of the following best describes how your municipality monitors financial condition? (Please select one)

Selected financial indicators are calculated and reported on an annual basis. (Examples of financial indicator measures include fund balance as a percentage of expenditures and liquidity)

In addition to calculating and reporting financial indicators on an annual basis, a financial condition analysis is conducted on an as-needed basis. (Conducting a financial condition analysis when pursing a bond is an example of using this tool on an as-needed basis)

Calculating and reporting financial indicators and analyzing the financial condition of the municipality are part of the annual work plan, including annual reports to the governing body.

Which of the following best describes how your municipality funds capital asset acquisition, replacement, and maintenance? (Please select one)

All capital is budgeted through the annual budget ordinance or through separate capital project ordinances on an as-needed basis.

A capital budget is formally adopted by the governing board.

A capital budget and a capital improvement plan (CIP) are formally adopted by the governing board. These include long-range plans and policies that anticipate future capital needs.

Which of the following best describes performance measurement in your municipality? (Please select one)

Performance measures have not yet been implemented.

Performance measurement is a voluntary activity. Certain departments track performance measures.

Departments are required to track and report performance measures. Workload measures are primarily used.

Departments are required to track and report a collection of performance measures, including workload, outcome, and efficiency measures.

Departments are required to track and report a collection of performance measures, including workload, outcome, and efficiency measures. These measures are a major part of the organization's decision-making process and are linked to organization-wide goals. (Strategic plans and balanced scorecards are examples of how performance measures can be linked to organization-wide goals)

Which of the following best describes budget development in your municipality? (Please select one)

Line item budgeting is primarily used for budget development.

Performance measures are reported in the budget document and line item budgeting is primarily used for budget development.

Performance measures complement line item budgeting for decision-making purposes, and allocation requests are supported with performance data.

Performance measures are used for decision-making purposes at the organizational level, and allocation decisions by the governing board are supported with performance data.

Performance measures are used for decision-making purposes at the departmental and organizational levels, and allocation decisions by the governing board are supported with performance data.

The next two questions inquire about program evaluation and policy analysis in your municipality. An example of a program evaluation is examining the efficiency and effectiveness of a municipal recycling program. An example of policy analysis is examining the equity between increasing the tax rate or implementing a fee to fund a municipal recycling program.

Which of the following best describes program evaluation in your municipality? (Please select one)

Program evaluation is not a part of the organization's routine work plan.

Program evaluation is done on an as-needed basis.

Program evaluation is a routine part of the organization's work plan to periodically evaluate the efficiency and effectiveness of municipal departments and programs.

Which of the following best describes policy analysis in your municipality? (Please select one)

Policy analysis is not a part of the organization's routine work plan.

Policy analysis is done on an as-needed basis.

Policy analysis is an annual part of the organization's routine work plan.

Which of the following best describes strategic planning in your municipality? (Please select one)

No strategic plan or long-term goals are in place.

The organization has an informal strategic plan with long-term goals.

A strategic plan with long-term goals has been formally adopted by the governing board and is used for departmental and organizational decision-making during the budget process.

Has your municipality received the Distinguished Budget Presentation Award from GFOA?

Yes

No

What is the population of your municipality?

Below 25,000

25,000-50,000

50,000-75,000

75,000-100,000

100,000-150,000

150,000 and Above

Please use the space below if you have additional comments or have questions and would like to be contacted.

Appendix III

Distribution of Budget Function Locations by Population Grouping

Finance

Department

Administrative

Services

Department

Independent

Office

Subunit of

Mayor’s or

Manager’s

Office

Population Count % Count % Count % Count %

Below 25,000 27 73.0 4 10.8 - - 6 16.2

25,000-50,000 81 73.6 6 5.5 1 .9 22 20.0

50,000-75,000 27 65.9 6 14.6 3 7.3 5 12.2

75,000-100,000 9 64.3 4 28.6 1 7.1 - -

100,000-150,000 4 26.7 2 13.3 4 26.7 5 33.3

150,000 and Above 15 51.7 3 10.3 8 27.6 3 10.3

Missing 1 1

Appendix IV

APPE NDI X I I I Financial Forecasting

Case Processing Summary

Cases

Valid Missing Total

N Percent N Percent N Percent

Financial Forecasting *

Budget Function Location

248 100.0% 0 .0% 248 100.0%

Financial Forecasting * Budget Function Location Crosstabulation


Total

Finance

Department

Administrative

Services

Independent

Office

Subunit of Mayor

or Manager

Financial Forecasting Focuses on

revenues/expenditures for

forthcoming budget year

Count 43 6 3 10 62

Expected Count 40.8 6.5 4.3 10.5 62.0

% within Financial Forecasting 69.4% 9.7% 4.8% 16.1% 100.0%

% within Budget Function

Location

26.4% 23.1% 17.6% 23.8% 25.0%

% of Total 17.3% 2.4% 1.2% 4.0% 25.0%

Focuses on

revenues/expenditures for

forthcoming budget year;

multi-year forecasts are

also prepared on

as-needed basis

Count 67 9 6 16 98

Expected Count 64.4 10.3 6.7 16.6 98.0



Location

41.1% 34.6% 35.3% 38.1% 39.5%

% of Total 27.0% 3.6% 2.4% 6.5% 39.5%

Forthcoming budget year

and multi-year forecasts

are part of routine

workplan; they are

regularly monitored and

updated

Count 53 11 8 16 88

Expected Count 57.8 9.2 6.0 14.9 88.0



Location

32.5% 42.3% 47.1% 38.1% 35.5%

% of Total 21.4% 4.4% 3.2% 6.5% 35.5%

Total Count 163 26 17 42 248

Expected Count 163.0 26.0 17.0 42.0 248.0



Location

100.0% 100.0% 100.0% 100.0% 100.0%

% of Total 65.7% 10.5% 6.9% 16.9% 100.0%

Chi-Square Tests

Value df

Asymp. Sig.

(2-sided) Exact Sig. (2-sided)

Pearson Chi-Square 2.383a 6 .881 .886

Likelihood Ratio 2.363 6 .883 .891

Fisher's Exact Test 2.324 .898

Linear-by-Linear Association .919b 1 .338 .357

N of Valid Cases 248

a. 1 cells (8.3%) have expected count less than 5. The minimum expected count is 4.25.

b. The standardized statistic is .959.

Financial Condition Case Processing Summary

Cases

Valid Missing Total


Financial Condition *


245 98.8% 3 1.2% 248 100.0%

Financial Condition * Budget Function Location Crosstabulation


Total

Finance

Department

Administrative

Services

Independent

Office

Subunit of

Mayor or

Manager

Financial Condition Selected financial

indicators are

calculated/reported

annually

Count 30 4 3 10 47

Expected Count 30.9 5.0 3.3 7.9 47.0

% within Financial

Condition

63.8% 8.5% 6.4% 21.3% 100.0%


Location

18.6% 15.4% 17.6% 24.4% 19.2%

% of Total 12.2% 1.6% 1.2% 4.1% 19.2%

Selected financial

indicators are

calculated/reported

annually; financial

condition analysis is

conducted as-needed

Count 52 12 5 14 83

Expected Count 54.5 8.8 5.8 13.9 83.0

% within Financial

Condition

62.7% 14.5% 6.0% 16.9% 100.0%


Location

32.3% 46.2% 29.4% 34.1% 33.9%

% of Total 21.2% 4.9% 2.0% 5.7% 33.9%

Calculating/reporting

financial indicators and

financial condition are part

of routine workplan; reports

to gov. body

Count 79 10 9 17 115

Expected Count 75.6 12.2 8.0 19.2 115.0

% within Financial

Condition

68.7% 8.7% 7.8% 14.8% 100.0%


Location

49.1% 38.5% 52.9% 41.5% 46.9%

% of Total 32.2% 4.1% 3.7% 6.9% 46.9%

Total Count 161 26 17 41 245

Expected Count 161.0 26.0 17.0 41.0 245.0

% within Financial

Condition

65.7% 10.6% 6.9% 16.7% 100.0%


Location

100.0% 100.0% 100.0% 100.0% 100.0%

% of Total 65.7% 10.6% 6.9% 16.7% 100.0%

Chi-Square Tests

Value df

Asymp. Sig.

(2-sided)

Exact Sig.

(2-sided)







b. The standardized statistic is -.852.

Capital Case Processing Summary

Cases

Valid Missing Total


Capital * Budget Function Location 247 99.6% 1 .4% 248 100.0%

Capital * Budget Function Location Crosstabulation


Total

Finance

Department

Administrative

Services

Independent

Office

Subunit of

Mayor or

Manager

Capital All capital is budgeted

through the annual budget

ordinance or separate capital

project ordinances

as-needed

Count 58 9 0 13 80

Expected Count 52.8 8.1 5.5 13.6 80.0

% within Capital 72.5% 11.3% .0% 16.3% 100.0%


Location

35.6% 36.0% .0% 31.0% 32.4%

% of Total 23.5% 3.6% .0% 5.3% 32.4%

A capital budget is formally

adopted by governing board

Count 21 2 2 6 31

Expected Count 20.5 3.1 2.1 5.3 31.0

% within Capital 67.7% 6.5% 6.5% 19.4% 100.0%


Location

12.9% 8.0% 11.8% 14.3% 12.6%

% of Total 8.5% .8% .8% 2.4% 12.6%

A capital budget and CIP are

formally adopted by

governing board

Count 84 14 15 23 136

Expected Count 89.7 13.8 9.4 23.1 136.0

% within Capital 61.8% 10.3% 11.0% 16.9% 100.0%


Location

51.5% 56.0% 88.2% 54.8% 55.1%

% of Total 34.0% 5.7% 6.1% 9.3% 55.1%

Total Count 163 25 17 42 247

Expected Count 163.0 25.0 17.0 42.0 247.0

% within Capital 66.0% 10.1% 6.9% 17.0% 100.0%


Location

100.0% 100.0% 100.0% 100.0% 100.0%

% of Total 66.0% 10.1% 6.9% 17.0% 100.0%

Chi-Square Tests

Value df

Asymp. Sig.

(2-sided)

Exact Sig.

(2-sided)




Linear-by-Linear Association 1.935b 1 .164 .166



b. The standardized statistic is 1.391.

Performance Measures


Cases

Valid Missing Total


Performance

Measurement * Budget

Function Location

247 99.6% 1 .4% 248 100.0%


Total

Finance

Department

Administrative

Services

Independent

Office

Subunit of

Mayor or

Manager

Performance

Measurement

Performance measures

have not yet been

implemented

Count 37 5 0 14 56

Expected Count 37.0 5.7 3.9 9.5 56.0

% within Performance

Measurement

66.1% 8.9% .0% 25.0% 100.0%


Location

22.7% 20.0% .0% 33.3% 22.7%

% of Total 15.0% 2.0% .0% 5.7% 22.7%

Performance

measurement is

voluntary; certain

departments track

performance measures

Count 48 5 2 10 65

Expected Count 42.9 6.6 4.5 11.1 65.0


Measurement

73.8% 7.7% 3.1% 15.4% 100.0%


Location

29.4% 20.0% 11.8% 23.8% 26.3%

% of Total 19.4% 2.0% .8% 4.0% 26.3%

Departments required to

track/report perf.

measures (workload,

outcome, or efficiency);

may be linked to org-wide

goals

Count 78 15 15 18 126

Expected Count 83.1 12.8 8.7 21.4 126.0


Measurement

61.9% 11.9% 11.9% 14.3% 100.0%


Location

47.9% 60.0% 88.2% 42.9% 51.0%

% of Total 31.6% 6.1% 6.1% 7.3% 51.0%

Total Count 163 25 17 42 247

Expected Count 163.0 25.0 17.0 42.0 247.0


Measurement

66.0% 10.1% 6.9% 17.0% 100.0%


Location

100.0% 100.0% 100.0% 100.0% 100.0%

% of Total 66.0% 10.1% 6.9% 17.0% 100.0%

Chi-Square Tests

Value df

Asymp. Sig.





Linear-by-Linear Association .001b 1 .977 1.000



b. The standardized statistic is -.029.

Performance Budgeting Case Processing Summary

Cases

Valid Missing Total


Performance Budgeting * Budget

Function Location

247 99.6% 1 .4% 248 100.0%

Performance Budgeting * Budget Function Location Crosstabulation


Total

Finance

Department

Administrative

Services

Independent

Office

Subunit of

Mayor or

Manager

Performance Budgeting Line item budgeting is

primarily used for budget

development

Count 92 11 4 22 129

Expected Count 85.1 13.1 8.9 21.9 129.0


Budgeting

71.3% 8.5% 3.1% 17.1% 100.0%


Location

56.4% 44.0% 23.5% 52.4% 52.2%

% of Total 37.2% 4.5% 1.6% 8.9% 52.2%


are reported in budget

document and line item

budgeting is primarily

used for budget

development

Count 43 7 6 8 64

Expected Count 42.2 6.5 4.4 10.9 64.0


Budgeting

67.2% 10.9% 9.4% 12.5% 100.0%


Location

26.4% 28.0% 35.3% 19.0% 25.9%

% of Total 17.4% 2.8% 2.4% 3.2% 25.9%


are used for departmental

and organizational

decision-making; they also

support allocation

requests

Count 28 7 7 12 54

Expected Count 35.6 5.5 3.7 9.2 54.0


Budgeting

51.9% 13.0% 13.0% 22.2% 100.0%


Location

17.2% 28.0% 41.2% 28.6% 21.9%

% of Total 11.3% 2.8% 2.8% 4.9% 21.9%

Total Count 163 25 17 42 247

Expected Count 163.0 25.0 17.0 42.0 247.0


Budgeting

66.0% 10.1% 6.9% 17.0% 100.0%


Location

100.0% 100.0% 100.0% 100.0% 100.0%

% of Total 66.0% 10.1% 6.9% 17.0% 100.0%

Chi-Square Tests

Value df

Asymp. Sig.

(2-sided)

Exact Sig.

(2-sided)




Linear-by-Linear Association 3.666b 1 .056 .057



b. The standardized statistic is 1.915.

Program Evaluation


Cases

Valid Missing Total


Program Evaluation * Budget Function

Location

244 98.4% 4 1.6% 248 100.0%

Program Evaluation2 * Budget

Function Location

244 98.4% 4 1.6% 248 100.0%

Program Evaluation * Budget Function Location Crosstab


Total

Finance

Department

Administrative

Services

Independent

Office

Subunit of

Mayor or

Manager

Program Evaluation Program evaluation is not

part of the routine

workplan

Count 15 3 2 4 24

Expected Count 15.8 2.5 1.7 4.0 24.0

% within Program

Evaluation

62.5% 12.5% 8.3% 16.7% 100.0%


Location

9.3% 12.0% 11.8% 9.8% 9.8%

% of Total 6.1% 1.2% .8% 1.6% 9.8%

Program evaluation is

done as-needed

Count 108 18 10 26 162

Expected Count 106.9 16.6 11.3 27.2 162.0

% within Program

Evaluation

66.7% 11.1% 6.2% 16.0% 100.0%


Location

67.1% 72.0% 58.8% 63.4% 66.4%

% of Total 44.3% 7.4% 4.1% 10.7% 66.4%

Program evaluation is a

routine part of the

workplan

Count 38 4 5 11 58

Expected Count 38.3 5.9 4.0 9.7 58.0

% within Program

Evaluation

65.5% 6.9% 8.6% 19.0% 100.0%


Location

23.6% 16.0% 29.4% 26.8% 23.8%

% of Total 15.6% 1.6% 2.0% 4.5% 23.8%

Total Count 161 25 17 41 244

Expected Count 161.0 25.0 17.0 41.0 244.0

% within Program

Evaluation

66.0% 10.2% 7.0% 16.8% 100.0%


Location

100.0% 100.0% 100.0% 100.0% 100.0%

% of Total 66.0% 10.2% 7.0% 16.8% 100.0%

Chi-Square Tests

Value df Asymp. Sig. (2-sided) Exact Sig. (2-sided)





N of Valid Cases 244 a. 4 cells (33.3%) have expected count less than 5. The minimum expected count is 1.67. b. The standardized statistic is .259.

Program Evaluation2 * Budget Function Location

Crosstab


Total

Finance

Department

Administrative

Services

Independent

Office

Subunit of Mayor

or Manager

Program Evaluation2 Program evaluation is not

part of the routine

workplan or is done

as-needed

Count 123 21 12 30 186

Expected Count 122.7 19.1 13.0 31.3 186.0

% within Program Evaluation2 66.1% 11.3% 6.5% 16.1% 100.0

%


Location

76.4% 84.0% 70.6% 73.2% 76.2%

% of Total 50.4% 8.6% 4.9% 12.3% 76.2%

Program evaluation is a

routine part of the

workplan

Count 38 4 5 11 58

Expected Count 38.3 5.9 4.0 9.7 58.0


%


Location

23.6% 16.0% 29.4% 26.8% 23.8%

% of Total 15.6% 1.6% 2.0% 4.5% 23.8%

Total Count 161 25 17 41 244

Expected Count 161.0 25.0 17.0 41.0 244.0


%


Location

100.0% 100.0% 100.0% 100.0% 100.0

%

% of Total 66.0% 10.2% 7.0% 16.8% 100.0

%

Chi-Square Tests







a. 1 cells (12.5%) have expected count less than 5. The minimum expected count is 4.04. b. The standardized statistic is .485.

Policy Analysis


Cases

Valid Missing Total


Policy Analysis * Budget Function

Location

245 98.8% 3 1.2% 248 100.0%

Policy Analysis2 * Budget Function

Location

245 98.8% 3 1.2% 248 100.0%

Policy Analysis * Budget Function Location Crosstab


Total

Finance

Department

Administrative

Services

Independent

Office

Subunit of

Mayor or

Manager

Policy Analysis Policy analysis is not part of

the routine workplan

Count 12 3 1 1 17

Expected Count 11.2 1.7 1.2 2.8 17.0

% within Policy Analysis 70.6% 17.6% 5.9% 5.9% 100.0%


Location

7.4% 12.0% 5.9% 2.4% 6.9%

% of Total 4.9% 1.2% .4% .4% 6.9%

Policy analysis is done

as-needed

Count 108 18 9 29 164

Expected Count 108.4 16.7 11.4 27.4 164.0



Location

66.7% 72.0% 52.9% 70.7% 66.9%

% of Total 44.1% 7.3% 3.7% 11.8% 66.9%

Policy analysis is part of the

routine workplan

Count 42 4 7 11 64

Expected Count 42.3 6.5 4.4 10.7 64.0



Location

25.9% 16.0% 41.2% 26.8% 26.1%

% of Total 17.1% 1.6% 2.9% 4.5% 26.1%

Total Count 162 25 17 41 245

Expected Count 162.0 25.0 17.0 41.0 245.0



Location

100.0% 100.0% 100.0% 100.0% 100.0%

% of Total 66.1% 10.2% 6.9% 16.7% 100.0%

Chi-Square Tests








b. The standardized statistic is .823. Policy Analysis2 * Budget Function Location

Crosstab


Total

Finance

Department

Administrative

Services

Independent

Office

Subunit of

Mayor or

Manager

Policy Analysis2 Policy analysis is not part of

the routine workplan or is

done as-needed

Count 120 21 10 30 181

Expected Count 119.7 18.5 12.6 30.3 181.0

% within Policy Analysis2 66.3% 11.6% 5.5% 16.6% 100.0%


Location

74.1% 84.0% 58.8% 73.2% 73.9%

% of Total 49.0% 8.6% 4.1% 12.2% 73.9%

Policy analysis is part of the

routine workplan

Count 42 4 7 11 64

Expected Count 42.3 6.5 4.4 10.7 64.0



Location

25.9% 16.0% 41.2% 26.8% 26.1%

% of Total 17.1% 1.6% 2.9% 4.5% 26.1%

Total Count 162 25 17 41 245

Expected Count 162.0 25.0 17.0 41.0 245.0



Location

100.0% 100.0% 100.0% 100.0% 100.0%

% of Total 66.1% 10.2% 6.9% 16.7% 100.0%

Chi-Square Tests

Value df

Asymp. Sig.









Strategic Planning


Cases

Valid Missing Total


Strategic Planning * Budget Function

Location

245 98.8% 3 1.2% 248 100.0%

Strategic Planning2 * Budget Function

Location

245 98.8% 3 1.2% 248 100.0%

Strategic Planning * Budget Function Location

Crosstab


Total

Finance

Department

Administrative

Services

Independent

Office

Subunit of Mayor

or Manager

Strategic Planning No strategic plan or

long-term goals are in

place

Count 15 2 2 6 25

Expected Count 16.5 2.6 1.7 4.2 25.0

% within Strategic Planning 60.0% 8.0% 8.0% 24.0% 100.0%

% within Budget Function Location 9.3% 8.0% 11.8% 14.6% 10.2%

% of Total 6.1% .8% .8% 2.4% 10.2%

The organization has an

informal strategic plan with

long-term goals

Count 87 15 9 17 128

Expected Count 84.6 13.1 8.9 21.4 128.0



% of Total 35.5% 6.1% 3.7% 6.9% 52.2%

A strategic plan with L-T

goals has been formally

adopted by gov. body;

used for decision-making

during budget process

Count 60 8 6 18 92

Expected Count 60.8 9.4 6.4 15.4 92.0



% of Total 24.5% 3.3% 2.4% 7.3% 37.6%

Total Count 162 25 17 41 245

Expected Count 162.0 25.0 17.0 41.0 245.0



% of Total 66.1% 10.2% 6.9% 16.7% 100.0%

Chi-Square Tests

Value df

Asymp. Sig.





Linear-by-Linear Association .000b 1 .984 1.000




Strategic Planning2 * Budget Function Location Crosstab


Total

Finance

Department

Administrative

Services

Independent

Office

Subunit of

Mayor or

Manager

Strategic Planning2 No strategic plan or

long-term goals are in

place or these are informal

Count 102 17 11 23 153

Expected Count 101.2 15.6 10.6 25.6 153.0

% within Strategic

Planning2

66.7% 11.1% 7.2% 15.0% 100.0%


Location

63.0% 68.0% 64.7% 56.1% 62.4%

% of Total 41.6% 6.9% 4.5% 9.4% 62.4%

A strategic plan with L-T

goals has been formally

adopted by gov. body;

used for decision-making

during budget process

Count 60 8 6 18 92

Expected Count 60.8 9.4 6.4 15.4 92.0

% within Strategic

Planning2

65.2% 8.7% 6.5% 19.6% 100.0%


Location

37.0% 32.0% 35.3% 43.9% 37.6%

% of Total 24.5% 3.3% 2.4% 7.3% 37.6%

Total Count 162 25 17 41 245

Expected Count 162.0 25.0 17.0 41.0 245.0

% within Strategic

Planning2

66.1% 10.2% 6.9% 16.7% 100.0%


Location

100.0% 100.0% 100.0% 100.0% 100.0%

% of Total 66.1% 10.2% 6.9% 16.7% 100.0%

Chi-Square Tests

Value df

Asymp. Sig.







a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 6.38.


Appendix V

I would like to thank my committee members, Bill Rivenbark (chair), Greg Allison, and Rick Morse, for

their guidance throughout the capstone process.

DOES LOCATION MATTER? BUDGET FUNCTION LOCATIONS AND …

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