Budgeting, Resource Allocation, and Fiscal Management
This section covers budgeting, resource allocation, and fiscal management. The exam tests whether you can build and defend a budget, control overtime and grants, and connect spending to service levels.
Core rules and concepts
- Line-item budgets control categories; program and performance budgets link spending to outcomes; zero-based budgeting requires justification from a base of zero.
- Operating funds recur annually; capital funds cover long-lived assets such as vehicles, radios, and facilities. Do not use one-time grant money for recurring salaries.
- Overtime is a controllable cost: forecast from call volume, special events, court, and backfill; monitor by unit and cause.
- Grant compliance includes allowable costs, matching requirements, reporting, and supplanting rules. Supplanting means using grant funds to replace local funds that would otherwise be available.
- Internal controls separate authorization, custody, and recording.
Worked example
A captain projects 6,000 overtime hours at $55 per hour, or $330,000. Midyear, 4,500 hours are used. Remaining budget is $330,000 minus $247,500, or $82,500, equal to 1,500 hours. At the current burn rate, the unit will exceed the budget. Reasoning: reduce nonessential backfill, shift staffing, and request a documented midyear adjustment rather than hiding the overrun.
Traps that cost marks
Funding recurring costs with one-time grants; ignoring benefit and pension costs; cutting training first; and treating overtime as uncontrollable.