Ch 4 Financial Management and Purchasing Flashcards
The ____ is probably the most important of a fire chiefs responsibilities (Ch 4)
Fire department’s budget
The Fire Chief must understand there are essentially two steps of a budget process:
1) establishing the amount
2) mathematical process of adding the numbers to reach the target
This method of budgeting incorporates the management of an organization and related budget by setting a series of OBJECTIVES that contribute to the organizations goals. Similar to performance budget, except organizations OBJECTIVES are predetermined. Determining the dollar amount required to do this would be very challenging for even the most experienced budgeter.
Management by objectives
This budget is intended for a specific activity or program, and includes only revenue and expenses for that program. Operation of fire dept does not EASILY fit into this budget and is not often used.
Program budget
This budget is typically when a greater degree of financial control is required. It is also the budget type used by MOST cities and towns, BROKEN DOWN by a function or purpose, such as a department, then by an individual item.
Line Item Budget
This is a method of budgeting in which all expenses must be justified for EACH NEW PERIOD, starting from a zero base and every function from within an organization is analyzed for its needs and costs. Not practical for the fire service, and if it is done creates an incredible amount of work. Most likely would yield the same results as other types of budgeting.
Zero-based Budgeting
This budget reflects the INPUT of resources and the OUTPUT of services for each unit authorization. It’s commonly used to show the link between the funds provided to the public and outcome of these services. Is intended to justify all the expenses. This budget is not easily applied to the operation of fire departments.
Performance budget
The fire chief should be cognizant of the budget ____ to make sure every effort is made to stay within budget and plan for the next budget
Daily
A capital improvement plan is a ___ to ___range plan, usually __ to __ years that identifies capital projects, and equipment purchases.
- short to long
- 4 to 10 years
Regardless of the particular policies in place, all governments should adhere to basic internal controls to protect against fraud and purchasing. The most fundamental fraud protection is to:
Make no payment until the person (or department) making the payment has matched a vendor invoice to the receipt number provided by the staff member who acquired the goods or services
The BID process is appropriate when an agency ____ specifications, whereas an RFP is when the government agency _____ specifications
- BID - CAN develop unambiguous
- RFP - CANNOT write clear
Budget periods differ, depending on ___ or ___.
- State
- Organization
Concerning capital improvement plans, the PROFESSIONAL ASSOCIATIONS for municipal budgeting recommend municipalities adopt two parts as part of their regular budgeting process, which are?
- Short term (3–5 year) capital
improvement program - Separate capital budget
P. 28 3-5 plan (2 of 3 - Planning)
P. 100 3-5 program (prof. assoc.)
This is often overlooked in a fire department budget, but needs to be managed and should be considered an integral part of the annual budget
Municipal revenues
In many medium and large organizations, purchasing functions are centralized in the finance department, or other administrative department. Traditionally, acquiring goods or service entails the following four steps: (RPDP)
1) requisition
2) purchase order
3) delivery
4) payment
