What is the best budgeting method for a law enforcement agency, and why? What are the strengths and weaknesses of this type of budget? Keep in mind one might suggest a zero-based budget, incremental budget, activity-based budget, value proposition budget, Flexible budget, etc.
Budgeting Method
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Budgeting Method
Activity-based budgeting (ABB) is an optimal approach for the budgets of law enforcement agencies for several scholarly reasons. According to Jon M. Shane M.A.’s article in the FBI Law Enforcement Bulletin, ABB assists law enforcement agencies (United States Department of Justice, 2005). When labor and expenses are correctly integrated, the whole cost of service and resource allocation can be better understood. Budgets based on police demands and actions rather than previous spending trends or arbitrary fluctuations benefit law enforcement agencies. The police force benefits tremendously from this method.
Advantages and Disadvantages of Activity-based budgeting
Activity-based budgeting is distinguished by its comprehensive analysis of disbursements and prospective opportunities for cost reduction (Ross, 2020). This technique is more analytical than traditional planning, which ignores real spending and activities in favor of adjusting previous budgets to accommodate inflation or company growth. ABB means more money in the bank for new and expanding enterprises. As a result, the budget can more accurately reflect the organization’s financial status and meet its goals. Moreover, ABB encourages divisional people to collaborate on the budget. Integrating budgets becomes easier when the emphasis is on activities rather than departmental divides. This strategy encourages departments to collaborate to boost production (Yousif, 2020).
The ABB’s design has some problems. Traditional budgeting approaches are less efficient and require more time to set up and maintain (Yousif, 2020). It may also result in budgeting errors because it necessitates additional assumptions and concepts from management. The complexity of activity-based budgeting, which requires identifying and assessing each cost-driving activity, maybe a hurdle, particularly for smaller businesses.
In conclusion, activity-based budgeting is more efficient and exact because it correlates expenditure with actual actions. The implementation of the strategy requires extensive research and administration due to the complexity of the strategy and the resources that are required.
References
Ross, T. K. (2020). Budgeting for Results. The Health Care Manager, 39(1), 24-34.
United States Department of Justice (2005). Activity-Based Budgeting: Creating a Nexus Between Workload and Costs. Retrieved from https://www.ojp.gov/ncjrs/virtual-library/abstracts/activity-based-budgeting-creating-nexus-between-workload-and-costs
Yousif, D. M. (2020). The Study of Budget on the Basis of ABC and ABB Activities. International Journal of Science and Business, 4(2), 60-71.