Managing the Budget - Amazon S3 · 2011-05-05 · Managing the Budget Mark D. Martin September 2002...

U.S. Department of Justice

National Institute of Corrections

Managing the Budget

U.S. Department of JusticeNational Institute of Corrections

320 First Street N.W.Washington, DC 20534

Morris L. Thigpen Director

Larry SolomonDeputy Director

Virginia A. HutchinsonChief, Jails Division

David PachollProject Manager

National Institute of CorrectionsWorld Wide Web Site

http://www.nicic.org

Managing the BudgetMark D. MartinSeptember 2002

NIC Accession Number 017628

This document was prepared under cooperative agreement number 01J09GIQ8from the National Institute of Corrections,U.S. Department of Justice. Points of viewor opinions stated in this document are thoseof the author and do not necessarily reflectthe official position or policies of the U.S. Department of Justice.

Foreword 2iii

Foreword Managing the Budget is the second in a series of three guidesdeveloped through the National Institute of Corrections (NIC)to enhance the skills, knowledge, and capabilities of jail admin-istrators in jail budgeting and resource management. The setincludes separate guides addressing budget development, budg-et management, and resource coordination. Jail administratorsand other involved officials are encouraged to read and use theinformation in all three guides to improve their jail’s budgetprocess.

Jail administrators often cite the lack of adequate resourcesas a major concern in safe and effective jail operation. Theseguides should help jail officials formulate more effective budgetrequests and improve their ability to manage resources allocat-ed to the jail. Recognizing that administrators have varying lev-els of involvement in their jail’s budget process, these guideshave been written for the widest possible audience. They aresufficiently detailed to help individuals with a strong back-ground in budgeting and resource management, yet easilyunderstood by those with little prior exposure to the budgetprocess.

We hope these guides, available through the NIC InformationCenter at www.nicic.org, will benefit all readers, regardless ofcurrent skill and knowledge level, who wish to improve their jailbudget and resource management practices.

Morris L. ThigpenDirectorNational Institute of Corrections

Preface 2v

PrefaceThe jail’s budget is a legal spending mandate set forth by thelocal governing board. Jail officials have a legal responsibility tomanage the jail within allocated budget resources and to ensurethat funds are expended for intended purposes within the budg-et. Beyond exercising fiscal control, jail administrators mustensure that the jail is working toward meeting the service goalsand objectives delineated in its budget plan. To meet theirresponsibilities, jail administrators must actively monitor keyperformance indicators and manage budget resources through-out the fiscal year. Although budget and accounting processesvary from place to place, the basic guidelines presented in thisguide can be applied in any jurisdiction.

This guide provides an overview of jail budget managementfor jail administrators, sheriffs, police chiefs, and others whoadminister and operate local jails. It focuses on key aspectsof jail budget management, highlights the jail administrator’s responsibilities in each area, and presents useful budget man-agement strategies.

■■ “Budget Implementation” defines the jail administrator’sbudget implementation responsibilities and describes howto develop and use expenditure plans to monitor budgetexpenditures.

■■ “Budget Management” describes how to monitor, manage,and control expenditures and garner the support of others.

■■ “Jail Revenue Monitoring and Management” discusses moni-toring and managing jail revenues, including the develop-ment and use of revenue plans to forecast projected receiptsduring the budget year.

■■ “Performance Monitoring” describes how to collect, evalu-ate, and use key performance indicators to monitor a jail’sprogress in meeting its budget objectives.

■■ “Management Through Budget Crises” presents strategiesfor responding to budget cuts or unanticipated expensesand preventive strategies to avoid or minimize impact.

Acknowledgments 2vii

AcknowledgmentsManaging the Budget was written under the direction of theNational Institute of Corrections (NIC). Special thanks to VirginiaA. Hutchinson, David Pacholl, and Fran Zandi of the NIC JailsDivision, who patiently provided assistance throughout thedevelopment of this guide. Thank you to Elmer Meiler, whoserved as content adviser, and Mary Stofer, who edited and for-matted an early version. Thanks to Cheryl Gallant, Kent Griffith,and Julie Chaffee, all current or former jail administrators, whoreviewed drafts to ensure that practical and useful informationwas included for the intended audience. Also, I wish to thankKaren Swetlow of Aspen Systems Corporation, who edited thefinal version of this guide and coordinated its production.

This guide draws heavily from the excellent resources devel-oped by the Government Finance Officers Association (GFOA),which promotes professional management of government finan-cial resources and is a major publisher of finance- and budget-related documents. Readers interested in learning more aboutpublic finance and budgeting may contact GFOA for a list of rele-vant publications and technical resources; the GFOA Web sitecan be found at www.gfoa.org.

Mark D. MartinSeptember 2002

Contents 2ix

ContentsForeword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .iii

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .v

Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vii

Budget Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Developing an Expenditure Plan . . . . . . . . . . . . . . . . . . . . . . .2

Using the Plan To Monitor Expenditures . . . . . . . . . . . . . . .3

Summary: Forecasting and Monitoring Are Keys to Effective Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Budget Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Monitoring Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Managing and Controlling Expenditures . . . . . . . . . . . . . . . . .7

Garnering Support in Managing the Jail Budget . . . . . . . . . .11

Summary: Clear Processes and Communication Are Keys to Effective Management . . . . . . . . . . . . . . . . . . . . .12

Jail Revenue Monitoring and Management . . . . . . . . . . . . . . .13

Developing Revenue Plans . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Summary: Revenue Planning Is Key to a Balanced Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

Performance Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

Establishing Targets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

Summary: Data for Key Performance IndicatorsEnable Timely Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

Management Through Budget Crises . . . . . . . . . . . . . . . . . . . .21

Factors Influencing Increased Expenditures . . . . . . . . . . . . .22

Factors Influencing Decreased or Insufficient Revenue . . . .22

Summary: Strategies and Understanding Are Keys to Avoiding Crises . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24

The Jail Budget: A Powerful Administrative Tool . . . . . . . . .25

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27

Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29

Budget Implementat ion 21

Budget Implementat ion Effective budget management begins with development of thebudget. The budget document should include goals, objectives,and performance indicators that reflect priorities for the jail.Budget allocations should be based on assessment of need andon work plans designed to address the jail’s priorities.

The governing board for the local jurisdiction is responsible forapproving the jail’s budget and any changes that might be nec-essary during the fiscal year. The adopted budget is the culmi-nation of a budget development process that starts well beforethe beginning of the fiscal year. During this process, jail officialshave an opportunity to identify budget needs and submit abudget request to the governing board. After considering therequests of all departments and balancing those requests withavailable revenue, the governing board officially adopts a budg-et. The adopted budget serves as the legal spending plan forthe jail.

Generally, the total authorized budget amount for the jail cannotbe exceeded, and amounts cannot be shifted between majorbudget categories without a budget amendment and approvalfrom the governing board. The jail administrator is responsiblefor controlling expenditures and for ensuring the budget isexpended for the purposes intended (see “Failure To Managethe Budget”).

22Managing the Budget

If effectively managed, the budget can bea powerful administrative tool for thejail administrator. Effective jail budget management—

■■ Increases the jail administrator’s credibili-ty with funding decisionmakers and thepublic.

■■ Provides a means of implementing the jailadministrator’s philosophy.

■■ Focuses resources on the needs andissues identified as priorities.

■■ Maximizes staff productivity by definingthe work of the organization.

■■ Increases public support for the jail bydemonstrating good stewardship of pub-lic funds and by producing results.

■■ Increases the jail’s potential for achievinggoals and objectives.

To manage budget implementation effectively,the jail administrator should—

■■ Work with the budget office to establishmonthly or quarterly spending forecastsand allot budget amounts accordingly.

■■ Regularly compare actual expenditureswith detailed budgets.

■■ Determine the need to transfer fundsamong major budget categories and sub-mit requests to the governing body totransfer these funds.

■■ Monitor and exercise control over payrollexpenditures.

■■ Monitor and exercise control over thepurchasing process.

■■ Monitor progress toward meeting theservice objectives established in thebudget.

■■ Initiate the actions necessary to adjustbudgets in response to revenue reduc-tions or unexpected expenses.1

Developing an Expenditure Plan

An expenditure plan provides monthly orquarterly projections of expenditures in themajor budget categories. It is typically basedon the jail’s historical pattern of expendi-tures, adjusted for any multiyear trends oranticipated deviations specific to the currentyear’s budget. With budget amounts allocatedto each spending category each month orquarter according to spending projections,the jail administrator can compare actualexpenditures with estimates (see “Why anExpenditure Plan Is Beneficial”). Conductingsuch reviews at regular intervals will allowthe jail administrator to identify problemareas and to take timely corrective measuresthroughout the fiscal year.

The jail administrator should work with thebudget office to develop an expenditure planto guide budget implementation. The budgetoffice can provide actual monthly or quarter-ly expenditures for major budget categoriesfrom past years. An average percentageexpended for each quarter can then be cal-culated. These average percentages can beadjusted to account for multiyear trends andapplied to the current year’s budget.

Failure To Manage the Budget

Consequences of failing to manage the jail budget may include—

• Overexpenditure at the end of the fiscal year.

• Reduction in services.

• Staff layoffs.

• Loss of authority to spend money or to hire staff without prior approval ofthe budget authority.

• A requirement to begin the next fiscalyear with a payroll or programs thenew budget cannot sustain.

• Difficulty in obtaining approval forfuture budget requests, resulting fromreduced confidence in the administra-tor’s ability to manage resources.

• Possible disciplinary action or job loss.

Budget Implementat ion 23

Exhibit 1 illustrates the computation of aspending plan for jail utilities. The worksheetshows the actual spending by quarter foreach of the previous 5 years for utilities. The5-year average percentage is adjusted basedon an assessment of expenditure trends overthe 5-year period. In this example, the last 3years indicate a trend slightly higher than theaverage in the first quarter and slightly lowerin the third. The adjusted percentage for eachquarter is then applied to the total amountallocated for utilities. The projected spendingestimates could be adjusted further to ac-count for one-time or planned expendituresthat occur at specified times during the budg-et year.

Using the Plan To Monitor Expenditures

Once established, the expenditure planbecomes a tool the jail administrator can useto monitor expenditures.2 Actual monthly orquarterly expenditures can be reported andcompared with the projected expenditures.If any significant deviations occur, the jailadministrator will need to determine why.

The jail administrator may then take timelycorrective measures before a budget problemescalates into a crisis.

Exhibit 1. Sample Expenditure Planning WorksheetDepartment: Detention CenterActivity: UtilitiesFY 2002 budget: $500,000

Fiscal Year 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Budget

Actual % Actual % Actual % Actual %

1997 $98,000 20.4 $153,000 31.9 $148,000 30.8 $81,000 16.9 $480,000

1998 93,000 19.2 146,000 30.1 147,000 30.3 99,000 20.4 485,000

1999 101,000 20.6 156,000 31.8 139,000 28.4 94,000 19.2 490,000

2000 102,000 20.6 159,000 32.2 146,000 29.6 87,000 17.6 494,000

2001 102,000 20.5 158,000 31.7 142,000 28.5 96,000 19.3 498,000

Averages

5 year (%) 20.3 31.5 29.5 18.7

Adjusted (%) 20.5 31.5 29.0 19.0

Projection $102,500 $157,500 $145,000 $95,000 $500,000

Why an Expenditure Plan Is Beneficial

Jail funds are expended in unequalamounts each month or quarter through-out the budget year. Utility costs, forexample, fluctuate according to season.Planned purchases for such items as jailclothing or bedding, equipment, and othersupplies may occur at designated times,while new positions that have beenauthorized may not be filled until severalmonths into the budget year.

A spending plan considers when expendi-tures are likely to occur and is thus able toprovide jail administrators with a moreaccurate picture of the budget status. If thebudget were allocated in equal monthlyincrements, a given category might appearto be over- or underexpended at a certaintime during the fiscal year, when it is actu-ally on track.


Exhibit 2 is an example of a report a jailadministrator might request from the budgetoffice to compare actual expenses with theexpenditure plan. In this example, actualexpenditures for the overall budget are slight-ly less than the first quarter planned spend-ing (1.7 percent). Based on this report, thejail administrator may determine the needto check further on the overexpenditure formedical services and take steps to managethose costs more closely for the balance ofthe year. He or she also may follow up to seewhether any scheduled equipment purchasesdid not occur in the first quarter.

Summary: Forecasting and Monitoring Are Keys toEffective Control

Managing the jail’s budget begins with devel-oping spending forecasts at the beginning ofthe fiscal year. Monthly or quarterly estimatesof spending in the major budget categories,adjusted for seasonal trends or plannedspending, provide budget benchmarks thatthe jail administrator can use to controlspending throughout the fiscal year. Workingwith the budget office, the jail administratorcan receive expenditure reports at regularintervals that compare actual spending withthe projections established in the expenditureplan. These tools help the jail administratormake necessary midcourse corrections tospending to ensure that the jail stays withinits budget limits and that the budget is ex-pended for the purposes intended.

Exhibit 2. Sample Quarterly Expenditure ReportDepartment: Sheriff’s DepartmentDivision: Detention CenterPercentage of time elapsed: 25

YTD1st Quarter 1st Quarter % Unexpended YTD % of

Budget Annual 1st Quarter Actual (Over) Under (Over) Balance of BudgetCategory Budget Plan Expenses Plan Under Total Budget Expended

Salaries $600,000 $140,000 $137,500 $2,500 1.8 $462,500 22.9

Fringe 180,000 42,000 41,250 750 1.8 138,750 22.9

Food 160,000 40,000 43,000 (3,000) (7.5) 117,000 26.9

Medical 45,000 11,250 15,000 (3,750) (33.3) 30,000 33.3

Utilities 42,000 8,500 8,000 500 5.9 34,000 19.0

Operations 65,000 15,000 15,500 (500) (3.3) 49,500 23.8

Equipment 30,000 10,000 2,000 8,000 80.0 28,000 6.7

Total $1,122,000 $266,750 $262,250 $4,500 1.7 $859,750 23.4

Budget Management Effective budget management is crucial to effective jail opera-tions. The jail administrator’s duties in this area include moni-toring expenditures and ensuring that budget resources areused as intended. Critical aspects of budget managementinclude monitoring expenditures, managing and controllingexpenditures, and garnering the support of others.

Monitoring Expenditures

Jail administrators should monitor jail budget status on an on-going basis. The budget office should provide the jail adminis-trator with regular reports (at least monthly) showing actualexpenditures compared with the detailed budget. The datafor these budget reports are drawn from the jurisdiction’saccounting system using the same budget classification struc-ture employed in the budget document. Monthly budget re-ports generally include the following information for each majorbudget category:

■■ The budgeted amount.

■■ The amount expended for the month.

■■ The year-to-date amount expended.

■■ Any outstanding encumbrances.

■■ The cumulative total year-to-date expenditures plus outstanding encumbrances.

Budget Management 25


The overall budget in exhibit 3 is slightlyunderspent at that point in the fiscal year(24.4 percent committed with 25 percent ofthe year elapsed). The medical services budg-et category, however, is significantly over-spent (41.7 percent committed with only 25percent of the fiscal year elapsed). This repre-sents an exception, and the jail administratormust determine the reason for the higherexpenditures. The administrator may findthat expenditures are actually in line with theexpenditure plan established at the beginningof the fiscal year. If not, however, corrective

measures may be necessary to hold futureexpenses in check.

When the jail administrator receives themonthly budget report, he or she shouldreview all of the expenditure accounts for reasonableness and note any significant vari-ances from expected spending levels. Redflags include—

■■ Significant variations in expenditures inan account used consistently, where theamounts charged are expected to vary lit-tle, if any, from month to month. Salaryand benefit accounts are an example.Monthly amounts charged to theseaccounts should generally represent1/12 of the total budget amount for per-sonal services.

■■ Certain accounts showing that expendi-tures significantly beyond the forecastedamounts or the year-to-date percentagesexpended are significantly higher thanthe percentage of time elapsed. This mayindicate increased costs for goods orservices or a demand higher than thelevel projected. An example might be anincrease in food costs and/or an increasein the number of meals served.

■■ Large balances of, or long-term, outstand-ing encumbrances. This generally indi-cates that purchase orders have not beenclosed out after the goods have beenreceived and the bill has been paid.

What Is an Encumbrance?

An encumbrance is a commitment offunds. Encumbrances are used to indicatethat unspent funds have been committedthrough either issuance of a purchaseorder or execution of a contract. Encum-brances must be added to expenditures toprovide a true balance of the resourcesavailable for new spending. Once fundshave been encumbered, they are nolonger available for other spending purposes.

Exhibit 3. Sample Monthly Budget ReportDepartment: Sheriff’s DepartmentDivision: Detention CenterPercentage of time elapsed: 25

YTD % ofBudget Annual Month YTD Outstanding Expenses and Remaining BudgetCategory Budget Expenses Expenses Encumbrances Encumbrances Budget Committed

Salaries $600,000 $45,000 $137,500 $0 $137,500 $462,500 22.9

Fringe 180,000 13,500 41,250 0 41,250 138,750 22.9

Food 160,000 14,000 43,000 1,500 44,500 115,500 27.8

Medical 45,000 4,000 15,000 2,500 17,500 27,500 41.7

Utilities 42,000 2,500 8,000 500 8,500 33,500 20.2

Operations 65,000 5,000 15,500 2,400 17,900 47,100 27.5

Equipment 30,000 1,000 2,000 5,000 7,000 23,000 23.3

Total $1,122,000 $72,400 $262,250 $11,900 $274,150 $847,850 24.4

■■ The remaining budget amount availableto spend.

■■ The percentage of the budget expendedor obligated.3


■■ Accounts for which no activity has beenposted for several months. This couldindicate a posting problem, where ex-penses have been charged to the wrongaccount.4

When deviations are identified, the jail admin-istrator should take prompt action to investi-gate the reasons behind the deviations. Heor she needs to take corrective measures tobring spending back into line with the budget.As the fiscal year progresses, the jail adminis-trator has increasingly less flexibility in decid-ing how to resolve problem situations thatmay arise.

Managing and Controlling Expenditures

Important elements in managing and control-ling expenditures include managing personalservices, managing the purchasing process,and modifying the budget.

Managing personal services

Control over payroll expenditures is crucialto managing the jail budget. The jail is oneof the most labor-intensive functions oflocal government, and its personal servicesaccount for 70 to 80 percent of the jail’s budg-et. Local governments primarily use a systemof position control to exercise control overpayroll expenditures.5 (See “What Is PositionControl?”) The jail administrator must under-stand and follow the jurisdiction’s formal pro-cedure for position control when managingthe personal services portion of the jail budget.

A current, up-to-date staffing plan is an essen-tial aspect of position control. The staffingplan includes a comprehensive list of all positions in the jail. Each position has adescriptive job title that is associated witha description of the position’s duties andresponsibilities along with the education,skills, and experience required. Similar posi-tions are grouped into job classifications.Because a military-style command structureis frequently used for custody staff in jails,

custody positions are often classified accord-ing to rank (e.g., detention officers, sergeants,lieutenants, captains). Program, support serv-ices, and administrative staff are also groupedinto classifications. However, they are typi-cally assigned civilian job titles (e.g., secre-tary, program manager, clerk, custodian).The staffing plan establishes the number offull-time equivalent (FTE) positions of eachjob classification required to staff the jail adequately.

In most jurisdictions, a pay plan establishessalary ranges for all job classifications. Thesalary range sets the minimum and maximumsalary a position within that classification canearn. It may include salary steps that allowan employee to progress within the classifi-cation based on performance and seniority.The entire pay plan is adjusted when the gov-erning board authorizes across-the-boardincreases.

Budgets for personal services are typicallybased on the jail’s staffing plan and the juris-diction’s job classification and salary struc-ture. In many jurisdictions, departments areauthorized a specific number of FTE posi-tions, and a limit is set on the amount of thebudget that may be expended for salaries.The jail administrator must be cognizant ofboth while managing the personal servicesbudget.

Personal services is one budget area wherethe jail administrator must be concerned withboth staying within the limits for the current

What Is Position Control?

Position control is the process used by alocal jurisdiction to exercise control overthe size and cost of its workforce. It en-sures that any new, permanent employeeadded to an agency’s payroll basis is fillinga position that has been approved andbudgeted and that the rate of pay for theposition is within the salary range for thejob classification in which the positionresides.


fiscal year and sustaining those staffing levelsin subsequent years. The jail administratorcan employ a number of strategies to managethis portion of the budget (see “Strategiesfor Managing the Personal Services Portion ofthe Budget”).

The line item for regular salaries is one com-ponent of the personal services categorywhere transactions occur on a regular basisand should not vary significantly from monthto month. Payroll amounts for regular salarieseach month should not exceed 1/12, or 8 per-cent, of the total budget amount.6 Any signifi-cant variation in this level of spending maywarrant investigation and corrective action.Particular attention should be paid to theovertime line item to compare the amountswith the forecasted spending levels in this

account. Overtime is a component of the per-sonal services category that may vary signifi-cantly from month to month. If supervisorsauthorizing overtime are not kept apprised ofthe budget status, expenditures in this areacan quickly spin out of control.

Managing the purchasing process

The purchase of services and goods is secondonly to payroll in the volume of budget trans-actions made by most jails.7 Purchases madeby government entities are subject to statelaws and regulations as well as local ordi-nances and policies. The jail administrator isresponsible for managing the purchasingprocess to ensure that the amounts and typesof purchases fall within budget parameters.The administrator also must ensure that the

Strategies for Managing the Personal Services Portion of the Budget

Ensure the jail is staffed with the right number and the right type of staff. The proper allocationand deployment of staff across shifts and functional units is essential. In addition, the availabilityof the right “type” of staff (e.g., custody staff supervising inmates, maintenance staff performingmaintenance, food service staff preparing meals) with the appropriate job skills and trainingenhances efficiency.

Strategically time the filling of newly authorized positions or vacancies in current positions.Strategic timing is important throughout the budget year to create vacancy savings that can beused to address current budget year shortfalls.

Manage the use of overtime carefully. The historical use of overtime should be tracked to makethe case for additional staff and/or to provide sufficient funding in an overtime line item. The useof overtime also should be monitored at regular intervals to verify that it is being used within pro-jected levels.

Manage the use of part-time staff. The number of hours worked by part-time staff should be moni-tored to ensure that part-time employees are not working in excess of what has been authorized(e.g., a half-time employee should be working no more than an average of 20 hours per week).

Establish and maintain procedures to ensure the accuracy and integrity of payroll documentation.Time cards, time sheets, and related documentation should reflect true hours worked.

Consider the impact of position upgrades on the entire job classification. An upgrade for oneposition may set the stage for upgrades of similar positions within the same job classification.

Monitor the use of merit increases. Merit increases are generally discretionary and based on anindividual’s performance. Caution should be exercised in granting merit increases as a way ofmaking up for perceived shortfalls in cost-of-living increases. Each merit increase, unless it is aone-time bonus, increases the base pay and has an impact on continuation funding needed infuture budget years.


jail’s purchasing process adheres to applica-ble laws and regulations.

Common features of the purchasing process.In most jurisdictions, the purchasing processis a coordinated effort between the jail andthe budget office.8 The amount of budgetoffice involvement and the level of approvalrequired are generally driven by the dollaramount of the purchase. Purchases below aspecified dollar amount (e.g., a range of $100to $500 in smaller jurisdictions) can generallybe authorized by the jail administrator ordesignee without the issuance of a purchaseorder (see “Key Terms”) or involvement of thebudget office before approval. In these cases,a jail employee will generally complete a requi-sition form and submit it to the jail adminis-trator or designee for approval. Althoughformal bids are not required for small pur-chases, the requisition may include pricequotes from two to three vendors. The requi-sition serves as documentation of the itemsrequested, the price quotes, and any internalapprovals. After the item is received or theservice is provided, the requisition is present-ed with the invoice, when billed, to the budg-et office for payment.

The purchasing agent in the budget officegenerally becomes involved when proposedpurchases exceed a specified dollar amount.In such cases, a requisition form is preparedand submitted to the jail administrator ordesignee. If the jail administrator approvesthe purchase request, the requisition form isforwarded to the purchasing agent in thejurisdiction’s budget office. It is the purchas-ing agent’s responsibility to identify proposedpurchases that require a formal bid process.Purchasing laws and regulations generallyrequire formal bids for the purchase of goodsand services that exceed a specified dollarthreshold (typically $5,000).

For a purchase that does not require a formalbid, the purchasing agent will review the requi-sition form to determine the reasonablenessof the price quotes received from the recom-mended vendors. In this process, a keyresponsibility of the purchasing agent is to

verify the availability of funds for the pur-chase and to make certain the purchase isappropriate for the account to which it willbe charged. If there are sufficient funds andthe purchase is valid, the purchasing agentwill generate a purchase order and encumberthe funds within the accounting system. If therequisition is denied, the purchasing agentwill return it to the jail administrator with anexplanation for the denial.9 The jail adminis-trator can employ a number of strategies tomanage the purchasing process (see “Strate-gies for Managing the Purchasing Process”).

If formal bidding is required, a solicitationin the form of a Request for Proposal is adver-tised and sent to interested vendors. The RFPprocess can involve several steps, includingbidders’ meetings, a timeline for proposalpreparation and submission, a formal bidopening, presentations by bidders, a proposalreview and selection process, contract negoti-ation, and contract execution (see “The RFPProcess”). Execution of contracts pursuantto formal bids generally requires approval ofthe governing board. The jail administratorand the budget office should work togetherthroughout all phases of this process to

Key Terms

requisition. The initial purchase requestdocument that, if approved, is the basis forpreparation of a purchase order.

purchase order. A document issued toauthorize a vendor to deliver specifiedgoods or services for a stated estimatedprice. An outstanding purchase order is anencumbrance.

invoice. A bill provided by a vendor orcontractor for goods or services provided.

Request for Proposal (RFP). A formalrequest used to procure professional serv-ices and purchase major items of equip-ment. RFPs specify the requirements forthe services or items requested and theparameters bidders must consider in sub-mitting bids.


ensure that all laws and regulations governingthe formal bid process are followed and thata qualified, competent vendor is retained.

Modifying the budget

Budget modifications include transfers offunds within and among budget categoriesand increases and decreases in budgetamounts.

Transferring funds among budget cate-gories. The monthly budget report enablesadministrators to identify potential budgetproblems and adjust the budget in a timelymanner. If a review of the budget report re-veals that a deficit will occur in a budget area,the jail administrator generally has flexibilityto transfer surpluses from another budgetarea to cover the deficit. The extent of the jailadministrator’s authority to transfer funds istypically set forth in the jurisdiction’s budgettransfer policy.

A hierarchy is usually established for authori-zation of budget transfers. In many jurisdic-tions, the jail administrator has the authority

to transfer funds between line items withinthe same budget category without theapproval of the budget office or governingbody (e.g., a transfer of funds from the officesupplies line item to the vehicle maintenanceexpense line item within the operations cate-gory of the budget might require only theapproval of the jail administrator). However,transfers above a certain dollar amount10

between major budget categories may requirereview and approval of the budget office (e.g.,a transfer of $10,000 from the medical servic-es category to the capital outlay categorywould likely require budget office approvalbecause it would involve moving funds fromone major budget category to another). Inthese same jurisdictions, transfers amongbudget categories specified in the adoptedbudget may require a budget amendment andapproval by the governing body (e.g., thetransfer of funds from capital outlay to per-sonal services). Most budgets set limits onthe amounts that may be expended for per-sonal services, and these limits may not beexceeded without an approved budgetamendment.

Strategies for Managing the Purchasing Process

To manage the purchasing process, the jail administrator should—

• Be knowledgeable about the jurisdiction’s requirements and procedures for purchasing goodsand services.

• Establish a good working relationship with the jail’s purchasing agent in the budget office.

• Provide the purchasing agent with information describing the types of goods and servicesrequired to operate the jail.

• Establish internal policies and procedures within the jail that outline the process for submissionand approval of purchase requisitions.

• Review purchase requisitions to verify their need, urgency, and priority.

• Establish a process for performance monitoring of service contracts to ensure the jail is receiv-ing the scope and quality of services specified in the contract.

• Regularly monitor expenditures for purchases of goods and services to make certain they arecharged to the appropriate accounts and are within budget limits.

• Have record management structures in place to maintain the integrity and availability of pur-chasing documents, including requisitions, purchase orders, receiving reports, and invoices.


When the jail administrator identifies a needto transfer funds, he or she should contactthe budget office to discuss the proposedtransfer or any alternatives and to verify thelevel of approval required to initiate thetransfer. Once approved, the budget officemust add an entry to the budget and account-ing records reflecting the transfer of funds.

The jurisdiction’s budget transfer policyshould describe the format and processrequired to transfer funds among budgetitems. The jail administrator has a responsi-bility to be aware of this policy and to followit in making budget adjustments.

Modifying authorized budget amounts.Because the budget is the legal spendingplan for the jail, the governing board mustapprove any increases or decreases in author-ized budget amounts through formal budgetamendments. The jail administrator may seeka budget increase for several reasons:

■■ To pay for unexpected expenses or forservice utilization above projections.

■■ To utilize additional jail revenue receivedabove projections (e.g., inmate fees,boarding contracts, telephone revenue).

■■ To receive authority to expend unexpect-ed grant funds.

A decrease in the authorized budget amountmay occur when revenues used to supportthe budget fall short. The governing boardmay amend the budget to a lower amount tokeep spending within available revenues. Thejail administrator will need to work with thebudget office to adjust the amounts of affect-ed line items when budget amendmentschange the authorized budget amount.

Garnering Support in Managingthe Jail Budget

The jail administrator typically gains internaland external support in managing the jailbudget by providing feedback and sharinginformation.

Internal support

The administrator can gain staff support byproviding regular feedback regarding thebudget status. Feedback creates a feeling ofstaff ownership in the budget and a sense ofresponsibility for being good stewards of thebudget resources. It allows staff to contributeby maximizing productivity, deferring pur-chases, and adjusting work processes to staywithin the budget.

External support

The jail administrator has little control overthe demand for jail services. The number ofinmates sentenced to the jail and the lengthof their sentences will be determined byother elements of the criminal justice system.Gaining a consensus on how the jail shouldbe used can significantly affect demand andthe jail’s budget resources. The jail adminis-trator can garner support from “users” of thejail (e.g., law enforcement, courts, probation,prosecutors) by regularly sharing informationregarding jail population characteristics andtrends, accomplishments, and needs. Whencriminal justice system partners are madeaware of jail budget issues, they may be morewilling to advocate allocation of resources

The RFP Process

The budget office typically works with thejail administrator and his or her staff todevelop specifications for the RFP. At abidder’s meeting, potential bidders canask questions they might have regardingthe specifications or submittal require-ments. Sealed bids are received up to aspecified date and time. At a formal bidopening, the sealed bids are opened at thesame time so that one bidder does nothave a competitive advantage. Jail staffmay participate in the proposal reviewprocess by scoring each proposal on thebasis of preset objective criteria. Once avendor has been selected, the budgetoffice often assists the jail by handlingcontract development and execution.


and/or adjust their policies and practices toreduce jail utilization.

Summary: Clear Processes and Communication Are Keys to Effective Management

The jail administrator must monitor, manage,and control expenditures to stay within theallotted budget and ensure that funds arespent for the purposes intended. The person-al services budget category represents thelargest percentage of the budget and themajority of the budget transactions. A currentstaffing plan and a well-defined position con-trol process are essential to effectively man-aging personal services. The second mostcritical aspect of budget management is man-aging the purchasing process. The purchaseof goods and services generally is closely regulated by the jurisdiction’s purchasingpolicies and by state statute and/or admini-

strative regulations. The jail administratormust ensure that purchases are made inaccordance with these requirements, withinbudget amounts, and for purposes that sup-port the organization’s mission.

When budget adjustments are necessary dur-ing the fiscal year, the jail administrator mustdetermine whether budget office or governingauthority approval is required before makingchanges. The jail administrator needs toestablish and maintain a good working rela-tionship with the fiscal staff that providesbudgetary support to the jail. Fiscal staffshould serve in a support role, providingbudgetary oversight and helping the adminis-trator remain on track with the spendingplan. The administrator’s actions shouldinspire the fiscal staff and governing authorityto feel confident that he or she intends tooperate within the budget and get the mostout of the funding available.

Jai l Revenue Monitoringand Management

Although the majority of the jail’s funding typically comes fromthe local jurisdiction’s general fund, revenues may be generatedfrom a variety of sources, including—

■■ Inmate fees and copays.

■■ Commissary.

■■ Telephone.

■■ Boarding contracts.

■■ Jail industries.

■■ Grants.

■■ Subsidies and revenue sharing.

■■ Reimbursements/incentive payments.

Because these revenues may be built into the jail’s budget, facility operation requires that they come in at projected levels.Therefore, revenues should be monitored regularly (much thesame as expenditures).

Jai l Revenue Monitoring and Management 213


Developing Revenue Plans

To provide a means for monthly or quarterlymonitoring of revenues, the jail administratorshould work with the budget office to developa revenue plan for each revenue source thatis similar to the expenditure plan describedpreviously. The budget office can provideactual revenue receipts by quarter for previ-ous years. An average percentage of receiptsby quarter can be computed and adjustedfor trends and deviations. The quarterly per-centages can then be applied to the annualrevenue estimate to arrive at a quarterly esti-mate of receipts. Actual receipts can be com-pared with these estimates on a quarterlybasis. If a shortfall or surplus in receipts isidentified in the quarterly review, the jailadministrator can take corrective measuresto bring the revenues back into line or toadjust expenditures to avoid a deficit orexcessive surplus.

Exhibit 4 shows average inmate telephonerevenue receipts by quarter and indicates aslight decline in revenue over the prior 5-yearperiod. By looking at quarterly receipt trends,the jail administrator can make minor adjust-ments in the projected percentages. For exam-

ple, the third quarter shows a slight decline inreceipts over the 5-year period. Although the5-year average is 27.5 percent, the downwardtrend supports an adjustment to 27.0 percent.

A significant deviation in receipts for anymonth or quarter may warrant investigation.Shortfalls, for example, may be due to inter-nal problems, such as delays in sending outbillings, changes in practices that reduceopportunities to generate revenue (e.g., uni-lateral restrictions on inmate telephoneusage), or coding of receipts to the wrongaccount.11 In such cases, revenue projectionsremain valid once the problem has been corrected.

In other circumstances, however, shortfallsmay signal a need to revise projections andtake action to reduce expenditures. For exam-ple, a neighboring jurisdiction with a board-ing contract may decide it will no longer usethe jail to house its inmates. Unless that deci-sion is reversed or the jail administrator isable to secure a replacement contract withanother jurisdiction, the revenue source islost and the administrator may need to adjustspending to maintain a balanced budget.

Exhibit 4. Sample Revenue Planning WorksheetDepartment: Detention CenterRevenue source: Inmate telephoneFY 2002 projection: $80,000

Fiscal Year 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Budget

Actual % Actual % Actual % Actual %

1997 $21,500 23.9 $23,400 26.1 $25,100 28.0 $19,800 22.0 $89,800

1998 19,850 24.2 21,600 26.3 23,200 28.2 17,500 21.3 82,150

1999 20,300 23.7 22,300 26.1 24,300 28.4 18,600 21.8 85,500

2000 19,700 24.7 20,200 25.3 21,500 26.9 18,400 23.1 79,800

2001 19,500 25.3 20,000 25.9 19,800 25.6 17,900 23.2 77,200

Averages

5 year (%) 20,170 24.3 21,500 25.9 22,780 27.5 18,440 22.3 82,890

Adjusted (%) 24.5 26.0 27.0 22.5

Projection $19,600 $20,800 $21,600 $18,000 $80,000

Jai l Revenue Monitoring and Management 215

Summary: Revenue Planning Is Keyto a Balanced Budget

A jurisdiction may depend on revenues gener-ated by the jail to support a portion of the jailbudget. Accordingly, jail revenues must beregularly monitored in relationship to thebudget throughout the fiscal year. A revenue

plan should be developed for each revenuesource to project receipts on a monthly orquarterly basis. These projections can becompared with actual receipts to assess thestatus of revenues. When deviations occur,the jail administrator must determine the rea-son and take timely corrective measures tokeep the budget in balance.

Performance Monitoring The budget serves as an operational guide for the jail. It directsfinancial resources toward work activities and toward strategiesdesigned to achieve specified performance objectives duringthe fiscal period. These objectives are aligned with the jail’soverall mission and goals. The adopted budget typically includesperformance objectives that highlight what the jail intends toaccomplish during the fiscal period with the budget resourcesthat have been allocated. The adopted budget also typicallyincludes indicators that can be used to measure progress to-ward meeting the jail’s performance objectives.

Accordingly, the jail administrator’s responsibilities includemonitoring the jail’s progress toward meeting its objectivesthroughout the fiscal year. Data on key performance indicatorsshould be collected and evaluated at regular intervals andsummarized using a standardized report format that can bereviewed by the jail administrator, budget officials, and otherpolicymakers. Exhibit 5 shows performance indictors for a jailinmate literacy program. Percentages presented in the “Percent-age of Projected” column in the performance indicators boxshould be compared with the “Percentage of time elapsed” per-centage at the top of the table. In this example, the number ofclasses held and the number of participant days are below theexpected level. As might be expected with a new program, thebudget reflects some front-loaded costs for equipment and sup-plies. Personnel costs are less than expected, most likely due to

Performance Monitoring 217


the time taken to recruit and hire the teacher.After reviewing the report, the jail administra-tor may want to follow up to determine thereason for any delays in starting the programand the lower-than-anticipated inmate partici-pation levels.

Establishing Targets

Performance monitoring necessitates theestablishment of benchmarks and perform-ance targets.12 Actual performance output canthen be compared with these targets to deter-mine whether the jail is meeting the goals andobjectives articulated in the budget. Perfor-mance monitoring provides information tothe jail administrator that is useful in assess-ing the effectiveness, efficiency, and qualityof jail operations. It also provides importantinformation for policymakers to use whendeveloping the budget for the following year.

Some jurisdictions have formal midyearreviews of agency budgets in which the jailadministrator and other department headspresent the status of their respective budgetsand their progress toward achieving budget

goals and objectives to the governing body.This formal review process gives the govern-ing board an overall picture of the budget status for the jurisdiction and provides anopportunity to reallocate resources as neces-sary to cover unexpected expenses of par-ticular agencies. This typically occurs atmidyear or at the end of the third quarterto allow sufficient time to correct budgetproblems before the end of the fiscal year.Performance data can support the jail admin-istrator’s request for budget modifications,when necessary, at these midyear reviewsand as budget planning begins for the nextfiscal period.13

Summary: Data for Key PerformanceIndicators Enable Timely Action

Monitoring the jail’s progress toward achiev-ing the performance objectives identified inits adopted budget is an essential element ofeffective budget management. The jail admin-istrator should ensure that data are regularlycollected and evaluated for key performanceindicators throughout the fiscal year. Monthlyor quarterly performance assessment reports

Exhibit 5. Sample Quarterly Performance Status ReportDepartment: Sheriff’s DepartmentDivision: Detention CenterProject: Inmate literacy programTotal cost: $34,900Percentage of time elapsed: 50

Goal: To provide inmates with opportunities for positive change through academic, work, and counseling programs.

FY 2002 Objective: To improve inmates’ reading and writing skills by establishing a literacy program in the jail.

Description: Hire a part-time literacy teacher and provide literacy classes for sentenced and long-term, pretrial inmates at least 3days per week. By improving reading and writing skills, inmates should be better equipped to get and retain a job upon release.

Performance IndicatorsProjected Actual Percentage of Projected

Teacher hired 1 1 100.0

Classes held 132 45 34.1

Participant days 1,635 402 24.6

Financial DataCategory Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter YTD Total

Personnel $19,500 $3,260 $4,875 $8,135

Contractual 3,000 190 600 790

Supplies 4,000 850 1,025 1,875

Capital outlay 8,400 6,000 500 6,500

Total $34,900 $10,300 $7,000 $17,300

Performance Monitoring 219

should be available for the jail administrator,budget officials, and governing body to assistin tracking the jail’s performance in these keyareas. This information can help the jail admin-

istrator take timely action to correct problemsaffecting performance during the fiscal yearand is invaluable in planning future budgetrequests.

Management ThroughBudget Crises

Despite a jurisdiction’s best efforts to plan and anticipate itsbudget needs, conditions inevitably change and the jurisdictionmay be faced with additional expenses or reductions in revenue.Most state laws require local jurisdictions to have a balancedbudget—that is, the amount of projected revenues must be thesame as the proposed expenditures (see “Key Terms”). Thejurisdiction as a whole may not operate in a deficit. When thejurisdiction finds that revenues are less than anticipated orencounters unanticipated expenses that exceed available rev-enues, it may direct its agencies to cut their respective budgetsto bring the jurisdiction’s overall budget back into balance.

The jail administrator may be called upon to make a budget cutin response to a budget crisis facing the local jurisdiction. Heor she also may encounter unexpected expenses in operatingthe jail that must be addressed within the jail’s budget. The jailadministrator must be prepared to respond to these challenges,regardless of how they come about, and to minimize their im-pact on the jail’s ability to carry out its mission.

Management Through Budget Crises 221


Strategies for responding to cuts or shortfallswhen they occur and preventive strategies toreduce the impact of future budget cuts orunanticipated expenses are discussed in thischapter.

Factors Influencing Increased Expenditures

A number of factors put pressure on jurisdic-tions to increase spending. Only some ofthese may be anticipated, including—

■■ Inflation. Inflation drives up the costsof goods and services, even if demand remains the same.

■■ Increased demand for services. As de-mand increases, the number of “serviceunits” must increase accordingly. For ex-ample, when the jail population increases,

a corresponding increase occurs in thenumber of meals served, medical visits, and so forth. Overall costs in-crease, even if the cost per unit of ser-vice remains the same.

■■ Regulatory changes. New regulationsmay require improvements to facilities,equipment upgrades, specialized stafftraining, or changes in work processesthat have additional costs.

■■ New state legislative mandates. Localjurisdictions are often affected by newlaws. For example, legislation increasingpenalties for certain offenses can increasethe number and length of the sentencesof offenders entering the local jail.

■■ Local initiatives. The activities of interestgroups advocating increased attention toa local issue can result in increased costs.For example, demand for increased en-forcement to reduce drunk driving canresult in expansion or redeployment oflaw enforcement resources. Increasedarrests and convictions for drunk drivingcan significantly affect the jail and therelated costs of housing additional offenders.

■■ Litigation/judgments against the jurisdic-tion. The costs of defending against litiga-tion and payment of any judgments canbe significant for a jurisdiction.

■■ Disasters. Any disaster that damages ordestroys the jurisdiction’s infrastructurecan incur significant expenses. Repair orreplacement of the jail as a result of fire,flood, or other calamity can quickly draina local jurisdiction’s reserves. Damage toother infrastructure, such as roads orbridges, resulting from a disaster alsomay affect the jail as funds are divertedfrom the jail budget to address thoseissues.

Factors Influencing Decreased orInsufficient Revenue

A number of factors may decrease the rev-enue available to fund local governmentbudgets, including—

Key Terms

A budget is a plan for using the governingauthority’s financial resources for a fixedperiod of time. The budget estimates pro-posed spending for a given period and theproposed means of paying for specifiedneeds. Two basic components of a budgetare the revenues and the expenditures.

Revenue is an increase in the yield offinancial resources for the jurisdiction.The local jurisdiction’s revenues maycome from a variety of sources, such asproperty taxes, assessments, permits andfees, licenses, fines, grants, and paymentsfrom other government entities.

An expenditure is a decrease in financialresources. There are three basic types ofexpenditures: operating, capital, and debtservice. Operating expenditures includeday-to-day expenses, such as salaries, util-ities, supplies, and equipment. Capitalexpenditures include the resources ex-pended for construction of new facilities.Debt service is the expense related to pay-ment of principal and interest on bondsissued by the jurisdiction.

Preventive Strategies To Avoid or Minimize Impact

To avoid or minimize the impact of budgetcuts or short budgets, the jail administratorcan—

• Find and cultivate “champions” on thegoverning board who are strong sup-porters of the jail and who will supportthe jail when cuts are being considered.

• Build strong community support andadvocacy.

• Solicit the support of other key criminaljustice entities that might be adverselyaffected by cuts.

• Build credibility with the governingboard as an effective and efficientadministrator.

• Effectively convey the importance ofadequate jail funding from a publicsafety and crime reduction perspectiveand articulate the potential conse-quences of inadequate funding.

• Develop a media plan that conveys apositive public image for the jail.

Management Through Budget Crises 223

■■ Decreased value of property on whichtaxes are based. Most local jurisdictionsrely heavily on property taxes to fundlocal government operations.

■■ Recession or stagnant economy. A down-turn in the economy reduces spending.Local governments may experience de-clining revenues in several areas, in-cluding sales tax and user fees. A pooreconomy also may depress property values, effectively reducing property taxrevenues as well.

■■ State-imposed lids on property taxes orspending. To control growth in taxes,many state legislatures have imposed lidson the growth of property tax revenues oron local government spending.

■■ Statutory limits on sources of revenuelocal jurisdictions may use. A local juris-diction’s authority to generate revenuethrough taxes and fees is often governedby state statute or by the state constitution.

■■ Loss of major industry/jobs in the juris-diction. When jobs are lost in the com-munity, many workers may choose torelocate. A glut of houses on the marketdepresses property values (which gener-ates less property tax revenue). It is alsolikely there will be fewer housing starts orother investments in the local economyduring periods of higher unemployment.

■■ Reductions in state aid. The amount ofstate aid available to local jurisdictions isgenerally decided by the state legislature.Economic downturns or changes in priori-ties at the state level can result in less aidto local jurisdictions.

■■ Public pressure to reduce the tax bur-den. The governing board consists ofelected officials who are very much awareof public sentiment on the tax issue.

The governing board and the budget officemay be aware of these circumstances atbudget planning time, yet the governingboard may be unwilling or unable to increasetax levies or fees to cover unexpected costincreases or revenue shortfalls. In such situa-tions, the jail may end up with a so-calledshort budget. A budget is short when insuffi-cient funds are authorized to maintain staffing

and operations at existing service levels. Thejail administrator must then determine howto absorb the shortfall.

Unanticipated expenses also may arise duringthe budget year, and the jurisdiction may askthe jail administrator to cut the jail’s budgetfor the balance of the fiscal year. When thisoccurs, prompt action is essential becausethe jail administrator must decide where tomake reductions with only part of the fiscalyear remaining. The jail administrator canemploy a number of strategies to avoid orminimize the impact of budget cuts or shortbudgets on the jail (see “Preventive StrategiesTo Avoid or Minimize Impact”).

If the jail administrator is faced with unantici-pated jail expenses, he or she also may havethe option of requesting a budget amendmentfrom the governing board to increase thebudget to cover some or all of the increased


cost. Most jurisdictions budget a reserve thatcan be used when agencies run into unantici-pated budget difficulties. The jail administra-tor can employ a number of strategies tohandle such problems (see “Strategies forResponding to Budget Cuts or UnanticipatedExpenses”).

The jail is an essential government functionthat contributes to the community’s safetyand well-being. By ensuring that the commu-nity hears this key message, the jail adminis-trator will build a broad base of support fromwhich he or she can draw if or when a budgetcrisis occurs.

Summary: Strategies and Understanding Are Keys toAvoiding Crises

Most jurisdictions are required by law tomaintain a balanced budget. When revenuesfall below projected expenditures, agenciesmay be asked to reduce their spending tobring the overall budget into balance. The jailadministrator can adopt a number of preven-tive strategies to prevent having the jail’sbudget cut or to minimize the impact of suchcuts. Moreover, he or she can employ a num-ber of strategies to manage through cuts orunanticipated expenses when they occur.Meeting the challenges presented by budgetcrises requires the jail administrator to main-tain a thorough understanding of the jail’s

Strategies for Responding to BudgetCuts or Unanticipated Expenses

The jail administrator can—

• Be prepared. In anticipation of possiblecuts, the administrator may establishfunding priorities and contingencyplans targeting spending reductionsthat will least affect safe operation ofthe jail.

• Reduce or eliminate discretionary pro-grams or functions.

• Defer spending on maintenance, pur-chases, or building improvements.

• Defer filling vacancies of nonessentialpersonnel.

• Defer hiring staff for newly authorizedpositions.

• Reduce discretionary travel.

• Find alternative resources (e.g., volun-teers, donations, assistance from otheragencies).

• Reduce staff.

budget and the ramifications of various choic-es made to stay within available resources.Building a wider constituency base thatunderstands the jail’s importance to commu-nity public safety will enable the jail adminis-trator to garner future support for his or herefforts to deal with budget crises.

The Jai l Budget: A PowerfulAdministrat ive Tool

Budget management is one of the key responsibilities of the jailadministrator. Effectively managed, the jail budget can be a pow-erful administrative tool. By focusing resources on identified pri-orities and then monitoring both expenditures and performance,the jail administrator can exercise leadership and control overthe direction of the organization.

Once the budget is adopted, the jail administrator should devel-op expenditure and revenue plans to provide monthly or quar-terly forecasts of spending and income. Actual expenditures andrevenues can then be regularly compared with the plan to pro-vide early notice of budget deviations that warrant investigationand possible corrective action.

Payroll and purchasing generate the majority of the transactionsthat occur in the jail budget and account for most of the budget.Accordingly, these budget areas should receive a significantamount of attention. The jail administrator should develop athorough working knowledge of the jurisdiction’s personnel sys-tem and purchasing processes. Both are governed by laws andregulations as well as the policies of the local jurisdiction. Mis-steps in managing these key areas can result in budget shortfallsand trigger legal action against the administrator and the jail.

The Jai l Budget: A Powerful Administrat ive Tool 225


When deviations are identified in the budgetmonitoring process, budget modificationsmay be necessary. The local jurisdiction’stransfer policies determine the level ofapproval required to make various types ofmodifications. Typically, the jail administratorhas authority to make adjustments within lineitems within the same budget category ormajor object of expenditure. Shifts of dollarsamong budget categories generally requirereview and approval of the jurisdiction’sbudget office. Changes in overall budgetedamounts generally require a budget amend-ment and approval of the governing board.

Data on key performance indicators shouldbe collected and evaluated at regular inter-vals throughout the fiscal period. This infor-mation is used to measure progress toward

achieving the goals and objectives set forth inthe adopted budget. It is also used to plan thebudget for the next fiscal period.

Jail administrators must be prepared to dealwith budget crises when they occur. Budgetproblems may result from unanticipatedexpenses or insufficient revenue to fund theadopted budget. In these situations, the jailadministrator may be required to identifyspending cuts to cover the unanticipatedexpense or to bring the budget in line withavailable revenue. By proactively developinga broad base of support for the jail and pro-viding information to help policymakersunderstand the consequences of inadequatejail funding, the jail administrator may helpinsulate the jail from budget cuts or reducetheir severity.

Notes 1. Powdar, Juliet Carol, The Operating Budget: A Guide for

Smaller Governments, Chicago: Government FinanceOfficers Association, 1996, p. 88.

2. Ibid., p. 90.

3. Ibid., p. 91.

4. Allison, Gregory S., Accounting Issues and Practices: A Guidefor Smaller Governments, Chicago: Government Finance Officers Association, 1996, pp. 123–124.

5. Powdar, Juliet Carol, p. 94.

6. The 1/12, or 8 percent, assumes all employees are paidmonthly. The actual monthly allocation will depend on thenumber of pay periods in the month. In jurisdictions whereemployees are paid bimonthly, for example, there are 26 payperiods per year, which means that 2 months during the fis-cal year have 3 pay periods.

7. Allison, Gregory S., p. 35.

8. The term budget office is used generically here. Larger juris-dictions may have separate departments responsible forbudget, accounting, and purchasing functions.

9. Allison, Gregory S., pp. 42–43.

Notes 227


10. The threshold amount requiring budget office review andapproval may be set by the jurisdiction or established bystatute or regulation.

11. Powdar, Juliet Carol, p. 97.

12. Ibid., pp. 97–98.

13. Ibid., p. 98.

Bibliography Allison, Gregory S. Accounting Issues and Practices: A Guide forSmaller Governments. Chicago: Government Finance OfficersAssociation, 1996.

Culotta, Jim. County Budget Overview. National Association ofCounties, 1998. Research Brief available from the National Asso-ciation of Counties at www.naco.org/pubs/research/briefs/rev_src.cfm.

———. Revenue Sources for County Governments. National Association of Counties, 1998. Research Brief available fromthe National Association of Counties at www.naco.org/pubs/research/briefs/rev_src.cfm.

Glick, B., and A. Goldstein, eds. Managing Delinquency ProgramsThat Work. Laurel, MD: American Correctional Association, 1995.

Hillsborough County Management and Budget Department. Tax-payer’s Guide to the Hillsborough County Budget. HillsboroughCounty, FL: Hillsborough County Management and BudgetDepartment, 1999.

National Advisory Council on State and Local Budgeting. Recom-mended Budget Practices: A Framework for Improved State andLocal Government Budgeting. Chicago: Government Finance Offi-cers Association, 1998.

Powdar, Juliet Carol. The Operating Budget: A Guide for SmallerGovernments. Chicago: Government Finance Officers Association,1996.

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U.S. Department of Justice

National Institute of Corrections

Washington, DC 20534

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