Financial and Budgeting Implications for Metropolitan Authority in Nova Scotia Essay

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According to Richmond et al. (1994), “the Metropolitan Authority was established in Nova Scotia, Canada in the year1978 and it was entrusted with the role of collecting and transporting waste products in Nova Scotia.”

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Ethical Considerations related to Budgeting and Finance within the Organization

The Metropolitan Authority tries at all levels to observe fiscal discipline and to maintain transparency in its undertakings. According to Shah (2005), “a system of local fiscal administration is expected to provide fiscal discipline as well as function with transparency of policy decisions, program results and finances, both within the government and to the community at large.”

Shah (2005) states that “the fiscal discipline involves using the available revenue appropriately, executing revenue and expenditure plans as required, maintaining the agency legality of expenditure and adopting a system of governance whereby the resources are used rationally”. The Metropolitan Authority has been able to achieve all this because of its sound system of fiscal administration. This administration is made up of the internal controls that are responsible for tracking the budget, internal auditors who ensure that resources are well utilized, and external auditors who frequently check any misappropriation of resources (Shah, 2005). According to Shah (2005), a local government is supposed to “provide a system that serves as protection against theft, misappropriation of funds, and misuse of government resources.”

Johnson (2006) states that, “transparency at the local level provides the means of communication between governments and citizenry regarding priorities, plans, decision making, and evaluation of results, thus acts as an important foundation for responsive, responsible and effective public services.” Shah (2005) also states that “the Metropolitan Authority has been able to maintain transparency in its activities by sharing its fiscal decisions on the mode of tax, sources of funds, and clearly stating their expenditures.” According to Johnson (2006), “public input should be considered by administrative bodies, and law makers and public bodies need to be transparent in their operations because transparency is a critical element of key involvement.” Richmond et al. (1994) explains that “the Municipal Authority ensures that it airs out its views on media to create room for public scrutiny in its activities.” Shah (2005) also states that “this Authority publishes its annual budget reports for the citizens to analyze, an action that promotes citizen participation in the organization.” The amount of information that is provided and its utility majorly depends on “local political will, the cost of providing information, as well as higher-tier legal requirements” (Shah, 2005).

Technological considerations for Improving Efficiency and Effectiveness of Finance and Budgeting

To improve the efficiency and effectiveness, of the Metropolitan Authority, there is a need to come up with faster ways in which service providers can be done. There is also a need to look at a resource from the results that you acquire after using it rather than focusing on the resource itself. Efficiency and effectiveness can basically be achieved by the use of technological tools that are efficient in delivering services and responding quickly to any change in demand or provisional changes. According to Shah (2005), “control over the resource is critical for fiscal discipline, but that control should not be so rigid that government agencies are unable to respond flexibly, quickly and efficiently in the delivery of services to the citizenry.”

Applicable laws and regulations impact the organization’s finances and budgetary operations

According to Shah (2005), “local governments in most countries operate within two legal frameworks; one adopted by the national government or regional development in federal systems and one adopted by lawmakers at local level.” Shah (2005) also notes that “the local fiscal law and the fiscal administration constitute these frameworks. The Metropolitan Authority is governed by the local fiscal law.” Nelsen (1981) notes that, “the fiscal administration must not contradict the laws in the constitution.” Shah (2005) states that “fiscal administration must meet regulatory and other oversight standards and at the same time must operate within the legal structure that is elected at national and local levels.” Richmond et al. (1994) note that these legal structures include: “rules regarding budget processes, like accounting management, treasury management, debt management and revenue mobilization, the context for internal and external audit and enforcement system as well as responsibilities for any special agencies that have oversight of the fiscal functions.”

Evaluation of the Organization’s Budget Process and Revenue resources”

Generally, budgeting deals with planning, implementation, monitoring, and auditing. According to Shah (2005), “the local budget process is the core of the system in fiscal administration that is where the broad financial policies and programs of the government are developed and the size of government is established.”

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According to Shah (2005), “the budget process of the Metropolitan Authority includes all the financial entities that are related to the state and there is no extra cost that is budgeted for interfering with the processes of accounting, auditing and covering corruption.”

According to Shah (2005), “the expenditures are grouped depending on the unit of administration which is legally accountable for funds and the budget is usually presented to the public so that any critics’ can be dealt with.”According to Drennan (1997), “the Metropolitan government is usually is majorly focused on the expected outcome rather than focusing on the cost of input.” Richmond et al. (1994) also states that, “the adopted budget is expected to provide hard constraints on agency resources while giving them flexibility in exactly how they use the resources for service delivery.”

According to Drennan (1997), “during the budget process in Metropolitan Authority, planning efforts are joined with the budget so as to plan for both efforts which in turn makes the whole budgeting process and implementing very realistic.”

Richmond et al. (1994) explains the process of budgeting as “a service plan is developed by the chief executive and then the legislative body views the plan, the administration puts the adopted program into effect, an external view body audits and evaluates the executed program and reports its findings.” According to Dafflon (2002), the rationale for capital budget is that “infrastructure projects gets purchased once and then yield a flow of returns for many years without the need to plan for the project again.”

Shah (2005) notes that “during the budgeting process, the citizens are given room to express themselves so that their interests can be catered for and at the same time, to enable the public be able to monitor and evaluate the progress of the organization.” In addition, Nelsen (1981) states that “although at times citizen participation may seem to bring lots of politics to an organization, it is very important to allow it so as to influence public representation.” According to Mochida (2008), “citizens participate directly in deliberations and negotiations over the distribution of local resources, usually in neighbor hood meeting and also in the monitoring of public performance. Mochida (2008) notes that, “although there are fewer technical skills in statistical monitoring and sophisticated evaluation of results, this is counteracted by paying greater proximity towards serving the citizens.”

According to Shah (2005), “the Metropolitan Authority gets its revenue resources majorly from local taxes and municipal contributions”. According to Drennan (1997), “local taxes are usually administered by local governments working alone, local governments working cooperatively, higher-tier government working alone and higher-tier governments working with cooperatives.” Drennan (1997) notes that “that despite the fact that the local administration has a part to contribute in the control of the local revenue, the central administration permits specialized expertise.” Shah (2005) also notes that, “the inseparability of policy and administration is far more pronounced for revenue administration than for any other task of fiscal administration.”

Overview of the Organization’s cash Management and Investment Strategies

According to Shah (2005), “Cash management includes operations within the budget year that handle cash flows into the government, payment made by the government, use of funds when they are held by the government and accommodation strategies when revenues fail to cover approved expenditures.”

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Richmond et al. (1994) explains that, “the Metropolitan Authority makes payments in and out through one treasury account as opposed to use of individual agency account which benefits the Authority when it comes to maintaining control and accountability.”

According to Drennan (1997), “revenues are usually recorded in their respective accounts upon reception and payments are made to the claimants on time.” Drennan (1997) also notes that, “the timing of revenue flows into the treasury seldom match the payments from the treasury and even in a government with a balanced annual budget, there will be periods in which accumulated revenue will be less than accumulated expenditures.”

According to Shah (2005), “cash management at the Metropolitan Authority plays a vital role in bridging forced loans from the suppliers and at the same time, making use of the cash balance to make short-term investments.” Shah (2005) also states that “the major issue that is faced in cash management of the Metropolitan Authority is balancing the return from the assets with the need for cash to meet payment obligations.”

The Organization’s Use of Cost-Benefit Analysis

Worthingdon & Dollery (2000) explain that, “the Metropolitan Authority uses the method of Cost-Benefit Analysis in evaluating the outcomes of the organization.” According to W.K. Kellogh Foundation (1998) the cost benefit relationship is “the relationship of the cost of the program to the cost of achieving them.” Worthingdon & Dollery (2000) explains that “this method is usually applied in organizations so as to determine whether an organization is realizing its objectives and goals or not.”

Internal Factors Impacting Successful Strategic Planning of the organization

Steiner (1979) states that “strategic planning in an organization requires it to be ready to take risks because planning involves the future, which is usually uncertain.” At he same time, Richmond et al. (1994) notes that “there are three internal factors that have greatly contributed to the success in implementation of the strategic plan in Metropolitan Authority, in Nova Scotia.” Richmond et al (1994) states that “these factors include: the managers’ capability to deal with the politics in the organization, the actual planning process and measuring factors.”

To begin with Richmond (1994) notes that, “the managers’ is able to deal with politics effectively”. Hellriegell & Slocum (2007) explain that “political behavior often occurs in organizations due to different opinions over goals, different views about the organization and it’s limitations, different knowledge about dealing with situations as well as how to make use of resources that are scarce.” On the other hand, W.K. Kellogh Foundation (1998) states that “doing away with these forces is not possible because there is no point in life when all people will have similar views.” W.K. Kellogh Foundation (1998) explains that “since, organizations are always striving to make use of the scarce resources, political behavior must be exhibited as every individual in the organization strives to acquire their preferred results.” Richmond et al. (1994) explains that, “whenever such cases arise at the Metropolitan Authority, the manager is able to handle the situation accordingly, thus the political behavior does not affect the organization much.” Hellriegell & Slocum (2007) also explains that, “in departments like accounting, human resources, and quality control, legal and information systems, employees’ performance is hard to measure.” Hellriegell & Slocum (2007) explains that “this makes leaders processes give yield to inadequate resources in terms of “pay, bonuses, and benefits while other leaders tend to give the political behavior in the process of appraisal a blind eye and assume that it does not exist.” Richmond et al. (1994) notes that “the managers at the Metropolitan Authority are normally transparent when it comes to awarding criteria, and thus, political behavior is usually minimal in the organization.”

According to Richmond (1994), the other factor is planning. According to Nelsen (1981), “planning is necessary so as to discuss, evaluate, and negotiate the optimization of the institution’s central strategic objective while reasonably satisfying special goals.” Nelsen (1981) also notes that “the managers at the Metropolitan Authority have been able to conduct good planning, taking into consideration the ideas and opinions of the employees in the organization.” Nelson (1981) also notes that, “these ideas are usually incorporated in the plan of the organization and by doing so, the employees and other stake holders feel that they are part of the plan fully and thus work whole-heartedly towards the realization of the goals.”

Richmond (1994) notes that, “the last factor is the measuring factor.” According to Steiner (1979), measuring and evaluation is, “establishing standards, measuring performance against standards, and correcting deviations from standards.” Worthingdon & Dollery (2000) explains that, “measures of success are usually established prior to the implementation of the plan so that as the plan is being implemented, assessment can be conducted.”

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Assessment of the Organization’s Overall Financial Condition.

According to Richmond et al. (1994), “the annual operating budget of the Metropolitan Authority is usually very high because it has many employees.”Shah (2005) explains that, “much of the organization funds are used in paying wages and salaries to the employees.” Richmond et al. (1994) also states that, “there are by laws conferring municipal responsibilities on the authority.”

In conclusion, as Shah (2005) states, “the Metropolitan Authority is able to reach its goals because of the presence of a good financial system and the capability of constructing sound budgets.” Shah (2005) states that “some of the ethical considerations that are related to finance and budgeting in the organization include: maintaining fiscal discipline and ensuring that there is transparency in the organization.” Efficiency and effectiveness in finance and budgeting can be improved by use of technological tools that are efficient in delivering services and responding quickly to any change in demand or provisional changes. The Metropolitan Authority is governed by the local fiscal law. The budget process of the Metropolitan Authority includes all the fiscal entities that are related to the state and there is no extra cost that is budgeted for interfering with the processes of accounting, auditing and covering corruption. There are three internal factors that have greatly contributed to the success in implementation of the strategic plan in Metropolitan Authority, in Nova Scotia. These factors majorly include: the managers capability to deal with the politics in the organization, the actual planning process and use of measurements to evaluate the organization. Cash management at the Metropolitan Authority plays a vital role in bridging forced loans from the suppliers and at the same time, making use of the cash balance to make short-term investments.

References

Dafflon, B. (2002). Local public finance in Europe: Balancing the budget and controlling debt. New York: Routlidge.

Drennan, M.P. (1997). Readings in state and local public finance. Wiley: Blackwell.

Hellriegel, D. & Slocum, J. W. (2007). Organizational behavior. New York: Thomson Learning.

Johnson, D. (2006). Thinking government: public sector management in Canada. London: Oxford University Press.

Mochida, N. (2008). Fiscal decentralization and local public finance in Japan. Cambridge: University of Cambridge Press.

Nelsen, R. P. (1981).Towards a method for building consensus during strategic planning. London: Sage.

Richmond, D., Graham, K. & Siegel, D. (1994). Agencies, Boards and Commissions in Canadian local government. New York: Thomson Learning.

Robinson, A. & Cutt, J. (1973). Public finance in Canada. London: Sage.

Shah, A. (2005). Fiscal Management. Oxford: Berg.

Steiner, F. (1979). Public sector and finance. Calgary: University of Calgary Press.

Worthingdon, A. & Dollery, B. (2000). Efficiency Measurement in the local public sector econometric and mathematical programming frontier techniques. New York: Queensland University.

W. K. Kellogg Foundation. (1998).Outcomes Logic Model. Mexico: Kellogg Foundation.

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"Financial and Budgeting Implications for Metropolitan Authority in Nova Scotia." IvyPanda, 5 May 2022, ivypanda.com/essays/financial-and-budgeting-implications-for-metropolitan-authority-in-nova-scotia/.

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IvyPanda. 2022. "Financial and Budgeting Implications for Metropolitan Authority in Nova Scotia." May 5, 2022. https://ivypanda.com/essays/financial-and-budgeting-implications-for-metropolitan-authority-in-nova-scotia/.

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