Budget Reducation and Reallocation
Given the need to curtail the growth of expenses, often within the context of declining resources, we have increasingly been asked to facilitate the re-ordering of budget allocations to match revenue projections. We have developed a model for this process which produces a reduction of expenditure in areas of lesser need and reallocation of resources to areas of strategic importance and greater need.
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Key Features
Our model entails the examination of the institutional functions and resources through an objective audit of every area of the institution. This activity is highly structured and heavily data-based. Decisions result from the application of agreed upon criteria and a thorough examination of adverse consequences and remedies. The process requires a dedicated effort by the cabinet and key administrators. Also it must be coupled with an effective communication procedure among the critical stakeholders.
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Process
The process begins with a review of current and long range projections of fiscal conditions. An analysis is made and institutional readiness is ascertained. A detailed approach to the audit methodology is presented, reviewed, and adopted. The audit is usually implemented under the auspices of an oversight committee.
The cabinet or primary policy-level body is engaged in the establishment of decision criteria. The range of areas to be addressed include both current operations and new initiatives. The actual decision process is conducted under the conditions of controlled, rule-based decision making. After review and approval of the decisions, an implementation plan and schedule are developed, as well as the necessary instruments of communication.
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Outcomes
The specific outcomes of the budget reallocation process may be characterized as positive and beneficial, even considering that the process involves reductions as well as reallocations:
• Fiscal stability for the institution in the immediate and long term future
• Widespread understanding of the need for and the results of fiscal restructuring
• Growth and improvement coupled with cost-effectiveness
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