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Budget Analysis is an Art…. Not a Science Budget analysis does not lend itself to a "cookbook" approach that is, a sequence of sharply defined steps.

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Presentation on theme: "Budget Analysis is an Art…. Not a Science Budget analysis does not lend itself to a "cookbook" approach that is, a sequence of sharply defined steps."— Presentation transcript:

1 Budget Analysis is an Art…

2 Not a Science

3 Budget analysis does not lend itself to a "cookbook" approach that is, a sequence of sharply defined steps that results in a desired outcome. Budgets for dummies

4 Budget analysis involves the application of acquired skills and habits

5 Analytical Thinking Budget analysis involves the ability to think analytically, and critically, about policy and program issues.

6 Analytical Thinking A mind that questions what others take for granted is essential to effective budget analysis. There are five types of questions that can be asked:

7 The 5 types of Questions 1. Chronological 2. True or False 3. Informational 4. Logical 5. Analytical ^

8 Chronological Questions Describe the history of a particular period For example, "describe the evolution of Rome from a republic to a dictatorship

9 True or False Questions Is the answer to the question a simple choice such as: Yes or No? Right or Wrong? Correct or Incorrect? True or False?

10 Informational Questions Who? What? Why? When? Where? How? They want a billion dharmas! I have some questions!

11 Logical Questions Demonstrate that something fits in a category:

12 Example Italian fiscal practices conform to European Monetary Union deficit standards. says that Italian fiscal practices must fit the category: European Monetary Union deficit standards

13 Analytical Questions A taxonomy or framework helps to organize the discussion and analysis of an activity, programs, or a spending issue.

14 Examples What percent of Gross Domestic Product (GDP) is taken by each major tax? How does our spending compare, by function, to similar countries? How many program objectives were achieved? How are the Governments priorities reflected in the budget requests?

15 Characteristics of Good Analysts

16 Attention to Detail An effective budget analyst must master the details of the spending for which he or she is responsible.

17 Attention to Detail, continued This requires: reading the law knowing the regulations understanding how a spending activity operates in ministries and other locations….

18 Imagination The ability to develop innovative solutions to problems is very important

19 Sensitive to Time An effective budget analyst is always sensitive to the value of a policy- maker's time.

20 knows Analysts need to avoid the temptation to share with the decision-maker all that he or she knows Concise

21 The Ability to Communicate The policy maker needs to know "the time of day, not how the watch is made."

22 The Ability to Communicate The best analysis and most imaginative solutions are not useful if they cannot be communicated effectively.

23 The Ability to Communicate Shakespeare said: "Since brevity is the soul of wit... I will be brief..." Lord Polonius in Hamlet Act II Scene ii To budget, or not to budget..

24 The Ability to Communicate Presenting issues involves judgment in discriminating between what is merely "interesting" and what is "essential" or "necessary" for the policy- maker to know in order to decide the issues. essentialnecessary

25 Loyalty and Discretion Loyalty is the ongoing commitment to support the decisions of the policy-makers. Avoid disclosing information that might undercut the policymaker or budget decisions. Not thisor this but this

26 Patience Recommendations of an analyst may not be accepted initially. Analysts can, by improving the quality of their analyses, eventually persuade policymakers to make politically difficult decisions that are good policy.

27 Integrity and Objectivity An effective budget analyst establishes a reputation for honest communication. An effective analyst is seen to be objective, seeking facts and information, and using them to support the analysis and recommendations.

28 Flexibility Governments change from time- to-time. Then, policies frequently change and activities and programs are affected.

29 Flexibility An analyst must accept these changes and support them even if they result in new policies for which the analyst is professionally responsible.

30 No one is born with budget analysis skills. No one fully possesses all of these skills. Nevertheless, a level of these skills sufficient to be effective can be acquired by dedication and experience. Dedication

31 Experience According to Oscar Wilde, experience is "the name men give to their mistakes." A dedicated budget analyst should expect to make mistakes, but should recognize that making mistakes is a way of gaining experience. Silly earthling! I would have paid twice as much! And here is the deed to our planet

32 Mistakes "Everyone makes mistakes, that is why they put erasers on pencils." The trick about mistakes, of course, is to avoid repeating the same mistakes in the same or similar circumstances!

33 Judgment Not everything that counts can be counted, And not everything that can be counted, counts - sign in Albert Einsteins office

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