Operating Budgets

Literature Review on Capital Improvement Programs (CIPs): Operating Budgets

In the Encyclopedia of Public Administration and Public Policy, [1] Donna Hom offers the following summary about the topic of Operating Budgets in Capital Improvement Programs (CIPs): Some governmental entities do not differentiate between the capital improvement program (CIP) budget and the operating budget and only adopt one budget: the unified budget. Others separate these two documents. The two documents are closely related and often impact each other through programs and operations that are common to both. This entry attempts to describe the relationship between the CIP budget and the operating budget, discusses common flaws when developing the CIP and operating budgets, and recommends ways to connect and construct these two documents better. The differences in CIP and operating budgets are real but there exists much mutual territory between the two documents, especially in the areas of program impacts and the achievement of the organization's goals. Typically, there are a few common failings or flaws in capital budgeting such as insufficient funds for the CIP, lack of plans for ongoing maintenance, and not including all subject matter experts in planning; these affect not only the CIP itself but also the operating budget. Policy makers, budgeters, and planners can take stronger measures to coordinate the development of CIP and operating budgets to minimize the potential negative impacts on each other. These measures include keeping an inventory of infrastructure, scheduling and financing routine maintenance, involving appropriate players in the planning stage, structuring the funding sources to cover not only the CIP but also the long-term day-to-day operations (by using the suggested form as a tool), and continually reviewing and revising cost estimations as necessary.

Resources

Notes and References

1. Entry about Capital Improvement Programs (CIPs): Operating Budgets in the Encyclopedia of Public Administration and Public Policy (2015, Routledge, Oxford, United Kingdom)

See Also

Further Reading

• Global Encyclopedia of Public Administration, Public Policy, and Governance (2018, Springer International Publishing, Germany)