Please Do not plagiarism.
Question1: Both the budget process and budgets themselves can impact management actions, both positively and negatively. For instance, a common practice among government agencies is for management to spend any amounts remaining in a budget at the end of the budget period, a practice often called “use it or lose it”. The view is that if a department manager does not spend the budgeted amount, top management will reduce next year’s budget by the amount not spent. To avoid losing budget dollars, department managers often spend all budgeted amounts regardless of the value added to products or services. All of us pay for the cost associated with this budget system.
Required: You have been hired as a consultant to advise a government agency on a solution to the “use it or lose it” budgeting problem.
1) Give at least two reason why there might be budget dollars unused in a department.
2) Offer a minimum of three actions that you would suggest be implemented/done by top management to solve this budget practice.
Question2: Senior Security Co. offers a range of security services for senior citizens. Each type of service is considered within a separate department and most of the cost except for corporate allocations are within each department’s control. Mary Pincus, the overall manager, is compensated partly on the basis of departmental performance by staying within the quarterly cost budget. She often revises/reduces the operation’s services to make sure departments stay within the budget. Says Pincus, “I will not go over budget even if it means slightly compromising the level and quality of service. These are minor compromises that don’t significantly affect my clients, at least in the short term”
1) Is there an ethical concern in this situation?
2) If so, which parties are affected?
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