What is Budget Analysis?
I was asked to write an article for our first newsletter under our new executive committee. I chose “Budget Analysis” because it is terminology some folks are not completely familiar with. It encompasses everything we do in the finance world. In one way or another you will analyze funding, whether it’s in a Soldiers pay, a directorate’s budget or to answer a funding question from a Program Manager. To start let’s take a closer look at the literal definition of “budget”. Webster defines it as a plan of operations based on an estimate or an itemized allotment of funds for a given period. Webster defines “analysis” as it is a process or method of studying the nature of something or of determining its essential features and their relations. Now that we know the literal meaning how does that apply to us in our every day duties.
Here’s what it boils down to, the numbers tell a story and every good Analyst knows what that story is. I’ve had the privilege to work with some exceptional budget analysts in both the Air Force and the Army and the best ones can tell you everything that goes into an obligation, commitment or disbursement for any given set of numbers. They know the story behind the numbers.
As a Budget Analyst, one of our primary duties is to fully inform the Commander of where his money has been spent, where he should be spending the remainder of his budget and how to get the most bang for the buck. We do this in many ways some of which include Financial Management Board meetings or Program Budget Advisory Committees. In a less formal way we do this by totally understanding the accounts we manage. That usually means understanding the mission. Again, the most successful analysts take a proactive approach to learning everything they can about the budgets they manage. Knowing the mission helps the analyst determine requirements, validate execution and assist in preparing unfinanced requirements.
Every good analyst knows you are never given a step-by-step procedure or checklist to follow when analyzing a budget or a funding issue. Good analysts seek knowledge in any way possible; they talk to experts, research regulatory guidance and make educated analysis based on their experience or the experience of others. You are never handed an easy answer to a problem they normally take some level of research to fully resolve. Knowing the numbers and what goes into them will give you a great place to initiate your analysis.
Just remember “Budget Analysis” isn’t easy or everyone would be doing it. It usually takes years of experience to be considered an expert analyst. Talk to your co-workers and peers to learn what they did when they first started out as an Analyst. Ask questions, dig into the details, conduct extensive research, know the accounts you manage and you’ll be on your way to telling the story behind the numbers.
Tags: BY: MARK HAWES ASMC VICE PRESIDENT
