Complete 7 pages APA formatted article: Agents and Representatives in Budgeting Process.
Complete 7 pages APA formatted article: Agents and Representatives in Budgeting Process. The role of agents in budgeting is of great significance and, hence, should not be overlooked. During the preparations of the annual budgets and reports from all the state organs, profit, and non-profit enterprises, all the stakeholders are represented via agents. The representing agents should be individuals with deep understanding of finance and knowledgeable in accounting. It is the participation of all the agents representing the relevant institutions in the budgetary process that is commonly referred to as departmental agency budgeting (Goodman and Clynch, 2004). This process entails four major stages, namely: i. Comprehensive Fiscal Policy Formulation Under this umbrella, the overarching institutional objectives are formulated and determined. It is these policies that regulates the decision making process regarding aggregate expenditure and revenue of the firm. ii. Preparation and Enactment of the Budget It is in this stage that the government decides on proportions of financial allocation to be advanced to each agent, and also the government outlines the purpose for which the funds are allocated to a given agent. The guiding principles relating to these are set out clearly by the legislations enacted by the state. iii. Budgetary Execution This is the actual stage in budgeting. It involves carrying out the stipulated expenditure as developed in the budget plan. It is in this stage that contractual agreements are signed between the budgetary committee and the contractors (Goodman and Clynch, 2004). iv. Accounting, Auditing, and Reporting This being the final stage in budgeting, it is the post-ante process of preparing the accounting records regarding revenues and expenditures executed by the organization within a given fiscal period. These records must have been audited by both internal and hired external experts/auditors to ensure that they meet the international accounting and auditing standards. The final reports (audited reports) are then presented to the financers, government agencies, ministers, the public and the parliament. Objectives of Budgeting The following are the key objectives of budgeting: Sound Macro-Fiscal Result: This forms the backbone to aggregate fiscal policy objective in budgeting. To ensure fiscal sustainability, sound fiscal policies must be put in place to regulate financial operations and to ensure that organization short-term debts are paid when they fall due. This policy also acts as macro-stabilizer to the economy by regulating taxation policies during boom and recession. Appropriate Expenditure Prioritization: This policy advocates for effective allocation of resources to those projects that are deemed socially profitable. The corollary under this objective is to avoid misallocation of resources especially to least priority sectors of the economy, but instead to maximize on the social gains. Service Efficiency and Effectiveness: This implies that the state services delivery is made more efficient and effective in a manner that is socially justifiable and acceptable by all the stakeholders. 1. Budget Overview Taking an example of HIV/AIDS funding program, during the financial allocation process, all the departments involved must have their representative on board.