Budget and Fiscal Management
Careers in public finance, including budget and fiscal management, cover the full range of financial management of an organization. Budget analysts work with management to review proposals to ensure that they are complete, fall within legal parameters, and are accurate. By combining budget proposals from all departments within an organization, a budget analyst can determine availability of funds, estimate future financial needs, and compare data from previous years to determine whether the organization is being fiscally responsible. Such comparisons can help the analyst and financial manager recommend budget cuts or funding requests.
Financial managers perform similar tasks by supervising employees who create budgets and prepare reports, statements, and forecasts related to the organization as well as the industry. While budget analysts may focus primarily on debits and credits, financial managers must have an understanding of the industry as a whole and be able to read trends, forecast challenges, and navigate legislation pertaining to the industry.
A Day in the Life of a Budget and Fiscal Manager
Public finance professionals spend a lot of time at their desks reviewing data and reports. The data drives discussions with stakeholders regarding funding and expenditures. Numbers are a second language of sorts, and data management software, such as Excel, becomes a finance professional’s best friend. Sound financial management is critical to the success of every organization, and the finance and accounting skill set is highly sought after in all areas of public service. Typical daily tasks include any or all of the following:
- Monitor spending to ensure it is within operational and capital budget limits
- Communicate with other managers to ensure uniform budget systems, policies, and procedures
- Help various departments prepare budgets based on past performance, projected goals, current revenue, and expenses
- Manage other budget and fiscal management staff
- Ensure company compliance with state and federal regulations and standards for the industry
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Salary and Benefits
The Bureau of Labor Statistics (BLS) reported that the median annual wage of budget analysts in 2010 was $68,200, and the median annual wage of financial managers, also in 2010, was $103,910. Benefits such as paid time off, medical insurance, and retirement options are standard for most employers.
Many budget and fiscal managers pursue undergraduate degrees in finance or accounting. In this particular field, the differences between a Master of Business Administration (MBA) and a Master of Public Administration (MPA) are, perhaps, most distinct. The budgeting and financial strategies of an MBA program focus on generating profit and appeasing stockholders. An MPA program, on the other hand, teaches professionals how to strategize in order to achieve the most benefit within the given budgetary parameters. In the public sector, the budget is often determined by outside entities but is monitored by the financial manager. A government or nonprofit entity does not exist for the purpose of making a profit but rather for making a difference.
Challenges and Opportunities
Budget and fiscal managers have the opportunity to help an organization manage its budgets effectively in order to meet its goals. These managers face the challenge of navigating budget cuts and riding out economic downturns while still trying to accomplish the same goals. There is also the challenge of communicating to colleagues why certain budget items are permissible while others are not. However, as a foundational function within any organization, there is always a demand for experienced public finance professionals.
The BLS reports that the employment of budget analysts is expected to grow 10 percent from 2010 to 2020, which is an average increase for all occupations. However, because budget analysis is becoming more complex with an increasing amount of data available, the BLS projects that there will be a greater need for budget analysts to help other management professionals interpret the data. In the public sector, increasing scrutiny of spending practices means greater job security for budget analysts as well.
Employment for financial managers, on the other hand, is expected to grow 9 percent from 2010 to 2020, which is slower than the average for all occupations. Managerial positions have become increasingly competitive after the recent economic downturn. Because there are more people vying for the same positions, those with master’s degrees and relevant experience have the best opportunities.