Toward Better Budgeting: Using the NACSLB Framework as a Guide, Kansas City Undertook a Comprehensive Evaluation of Its Budget Process That Resulted in 10 Recommendations for Improvement. (Best Practices)
Hunt, Nancy, Jenkins, Deborah, Noble, Amanda, Government Finance Review
In December 1997, the National Advisory Council on State and Local Budgeting published 59 recommended practices that have become the model for effective public budgeting. Shortly thereafter, GFOA approved its own recommended practice endorsing the work of the NACSLB. GFOA encourages governments to "look to the recommended practices of the NACSLB as a model for evaluating and improving their own budget policies and procedures, with the goal of ultimately developing, adopting, and implementing their budgets in accordance with these recommended practices."
In 2001, the City of Kansas City, Missouri, evaluated its budget process based on the NACSLB practices. An urban core city with a population of 450,000, Kansas City has an annual budget of approximately $960 million. Voicing concern about elected officials' limited role in budgeting, the mayor requested that the City Council's finance and audit committee review the budget process to recommend strategies for improving the process and strengthening elected officials' oversight and decision-making roles. To this end, the committee turned to the city auditor. With the help of Irene S. Rubin, a professor of public administration and political science at Northern Illinois University and expert on local public budgeting and finance, the City Auditor's Office used the NACSLB recommended practices as the basis for 10 recommendations for improving the city's budget process.
THE NACSLB MODEL
The NACSLB framework starts with the premise that budgeting is more than traditional, line-item expenditure control. "The mission of the budget process," the NACSLB writes, "is to help decision makers make informed choices about the provision of services and capital assets and to promote stakeholder participation in the process." The NACSLB stresses the need for communication and involvement of stakeholders throughout the budget process. A good budget process is strategic, focuses decisions on results and outcomes, promotes effective communication, and provides incentives to government management and employees. These ideas form the basis of the NACSLB model.
The NACSLB framework is a hierarchy of four broad budgeting principles, 12 related elements, and 59 recommended practices. The principles provide an overall structure that is goal-driven, dynamic, and comprehensive--spanning all phases of budgeting. The elements are "action components" that provide guidance on how to fulfill each of the principles. The recommended practices are procedures that assist in accomplishing the elements and principles. Most elements have several associated practices. Taken together, the recommended practices encourage a long-term perspective focused on organizational goals and results.
RATING THE BUDGET PROCESS
The City Auditor's Office first talked to elected officials and city staff to gain a better understanding of their concerns and of how the budget process works. We had some knowledge about the process through our own participation and previous audit work, but we needed a more thorough understanding, including other participants' views. We then reviewed the NACSLB practices and asked staff members whether and how the city follows them. We supplemented these discussions by reviewing scores of documents, such as legal requirements, budgets, forecasts, policies, strategic plans, and more. By reviewing these documents, we were able to gain a more complete and reliable picture of the city's budget process than if we had relied solely on what people told us in interviews.
We also talked to budget officials in Phoenix, Austin, Minneapolis, Virginia Beach, and Long Beach--other council-manager cities that are recognized for their strong financial management--to learn how they follow recommended budget practices. The NACSLB makes it clear that its recommended practices can be implemented in different ways. Learning what other cities are doing helped us to expand our thinking about the framework. …