Accounting For Governmental & Nonprofit Entities
Accounting For Governmental & Nonprofit Entities
18th Edition
ISBN: 9781259917059
Author: RECK, Jacqueline L., Lowensohn, Suzanne L., NEELY, Daniel G.
Publisher: Mcgraw-hill Education,
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Chapter 12, Problem 17EP

The police chief of the Town of Meridian submitted the following budget request for the police department for the forthcoming budget year 2020–2021.

Chapter 12, Problem 17EP, The police chief of the Town of Meridian submitted the following budget request for the police

Upon questioning by the newly appointed town manager, a recent masters graduate with a degree in public administration from a nearby university, the police chief explained that he had determined the amounts in the budget request by multiplying the prior year’s budget amount by 1.05 (to allow for the expected inflation rate of 5 percent). In addition, the personnel category includes a request for a new uniformed officer at an estimated $50,000 for salary, payroll expenses, and fringe benefits. Capital outlay includes a request for a new patrol vehicle at an estimated cost of $45,000. The amount of $500 was added to the maintenance category for estimated maintenance on the new vehicle. The police chief is strongly resisting instructions from the town manager that he justify the need not only for the new uniformed position and additional vehicle but also for the existing level of resources in each category. The town manager has stated she will not request any increase in the police department’s budget unless adequate justification is provided.

Required

  1. a.      Evaluate the strengths and weaknesses of the police chief’s argument that his budget request is reasonable.
  2. b.      Are the town manager’s instructions reasonable? Explain.
  3. c.       Would the town council likely support the town manager or the police chief in this dispute, assuming the police chief might take his case directly to the town council?
  4. d.      What other improvements could be made to the town’s budgeting procedures?
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