THE BUDGET PROCESS
Budgeting begins with the collection of the
information on which your budget request will be based.
Much of this information is historical in nature. It comes
from the usage data recorded on completed work orders
and requests, consumable and nonconsumable
equipment and material receipt and expenditure records,
and your operating target (OPTAR) log and other supply
records. The rest of this information is a blend of
projected changes to your current mission. (The
projected changes are based on changes in customer
needs, the addition or deletion of a particular service,
and the availability of improved technology to your
unit.) Obviously you shouldnt wait until 2 weeks
before the due date of your budget request to start
collecting and evaluating this information. Instead, you
should continually perform this process all year.
You should also cultivate and maintain industry and
trade contacts to find out about improvements in
equipment, material, and process technology. Make
contact with the technical representatives serving your
local area to let them know of your interest. Subscribe
to and read trade periodicals (magazines), and write for
information about products you believe could be useful
in your operation. Keep open channels of
communication with other managers in your field by
encouraging the exchange of information and ideas.
Once you have collected all the information on
which to base your budget decisions, ask yourself the
Will my units mission be the same next year as
it was this year?
If yes, will the volume of work increase,
decrease, or remain the same?
If no, what work will we no longer do? What
work will be added, and how much?
Will my unit be doing the work the same way next
year as we did it this year? If not,
what materials and equipment will we no
longer stock or use and
what materials and equipment will we have to
begin to stock or use?
What is the cost of the materials and equipment
we will require to operate next year, and when
should we order them?
The answers to these questions are based on
information you have gathered and on the current cost
of standard stock and open-purchase items. You do not
figure inflation into your budget as a percentage increase
over projected costs. That is done at a higher level. But
inflation is nevertheless a real factor you must consider.
As costs rise you maybe forced to buy less of everything
You can beat inflation and decrease the chances of
your budget request being reduced by submitting a
detailed, item-by-item breakdown of your funding
needs. Such a request would identify not only how much
material your division needs, but also what the material
is used for and what organizations and missions it
supports. Then if inflation erodes the buying power of
your OPTAR funds, you can show your department head
and commanding officer exactly how much your
services will be cut. You can also show them what
organizations and missions will suffer if you cannot
obtain the quantities of materials requested. When
presented in this reamer, a budget is much easier to
support and harder to cut. If cuts must be made, it forces
the command authority to decide exactly where, and at
whose expense, the savings will be made.
When planning a budget, you cannot accurately
predict every possibility, but Navy budget planning
makes allowances for that. Every commanding officer
has Operation and Maintenance, Navy (O&MN) funds
set aside to deal with new or unexpected requirements.
So if your division is suddenly tasked to provide an
unexpected service or a large, unplanned volume of
support, you can ask for extra funds. You can justify the
request by showing that the division cannot perform the
task and continue providing regular services without the
ACTIVITY-LEVEL BUDGET EXECUTION
The operating budget prepared by a responsible
center sets forth the annual plan of operations. It is the
commanding officers estimate of the total resources
required throughout the year for performance of the
activitys mission, including reimbursable work/service
for others. The budget as approved by proper authority
sets forth the actual resources available, and it is against
these amounts that performance will be evaluated.
Approval is received on a Resource Authorization
(NAVCOMPT Form 2168-1). The Resource
Authorization indicates, in quarterly increments,
approved obligational authority,
authority, and expense authority.