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SNHU To: From: CC: Date: Re:

Comments:

Budget Managers Michael P Morales, CEO Recipient names March 9, 2017 End of Year Budget Cycle

I am aware that the end of our current budget cycle is upon us. I am also aware that you may be tempted to spend any left-over funds in your budget for fear of your budgets being reduced next cycle. I strongly discourage you from doing this. We will not be reducing the budget for any department. We are looking to ensure we have accuracy in what is spent so we may have more accurate projections. Anything that has not been closed for this budgeting cycle will need to be reflected as pending for the next cycle. As an alternative to the use it or lose it methodology, I am proposing that any unused money in the budget be rolled over into the next budgeting cycle. This will help to reduce the incentive of spending what is left and increase the allocated budget for the next cycle. Another alternative is to increase accountability and communication by making the budget transparent. This would then allow for a more honest approach to reporting of departmental spending. Centralized reporting would be another alternative and ties into transparency. There is one main person whom knows everything the department is involved in, however each person many contribute to any updates to the budget prior to being reviewed. It is prudent for everyone to

include a confidence factor with each budget entry. Knowing that certain budget estimates are highly likely to come in as planned will allow the manager to make better allocation decisions. (Thomas, 2013) The main theme is accountability. Granted, as budgeting managers, you are overseeing your departmental budget. By allowing employees to be a part of the budgeting process, you are also increasing their level of accountability and reduce the mentality of use it or lose it. There is not right or wrong solution here. I am providing alternatives for your consideration to avoid the use it or lose it mentality. I look forward to your input with this matter.

Hamel, G. (2013, September 09). Stop fiscal year spending orgy: Column. Retrieved March 09, 2017, from http://www.usatoday.com/story/opinion/2013/09/09/end-of-fiscalyear-spending-government-column/2790129/ Thomas, E. (2013, August 16). Five Tips for 'Use It or Lose It' Budgets. Retrieved March 09, 2017, from http://www.cioinsight.com/itmanagement/it-budgets/five-tips-for-use-it-or-lose-it-budgets

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