How to Effectively Prepare and Communicate Your Budget Presentation to StakeholdersPosted on Sep 17, 2013 12:00:00 AM
The nuances of government finance are difficult even for seasoned board members to understand; imagine the layperson attempting to grasp the annual budget in one sitting. To be effective, a budget presentation must be more than a recitation of numbers. A high-level, summary presentation in conjunction with the required budget hearing/adoption can set the stage for the fiscal year and provide an opportunity to educate board members, citizens and other stakeholders. Balancing the disparate levels of fiscal acumen of your audience can be a challenge. By using graphs and graphics you can prevent the layperson from being overwhelmed by tables of numbers, but you need to provide enough detail to satisfy the CPA-types on your board or in the audience.
By focusing not only on the actual numbers, but how they support the organization’s mission and goals, you can present the budget in a broader context. Link finances with your mission; be it educating children, delivering clean water or keeping the streets safe. Rather than simply reciting the revenues and expenses budgeted in various areas, discuss what has changed significantly. Are new resources being directed to areas that best support the organization’s core missions? Are resources being redeployed to better meet the goals set by the governing board? The economic climate of the last five years has brought an increased focus on governmental spending as well as demands from taxpayers for efficient use of the resources that they are providing. Share your financial stumbles as well as successes. If you don’t, someone else will.
In addition to discussing significant changes to resource allocations, a strong budget presentation will emphasize items outside the entity’s control. An example could be unpredictable revenue due to current economic conditions or the challenges being experienced at higher levels of government that are impacting your funding. Another could be difficult to control expenditure line-items such as utility costs, fuel costs or health care premiums. What are your contingency plans if these items do not come to pass as budgeted?
The Board and community need to have an understanding of the nature of a budget. It is not a prediction, it is a financial plan to meet the government’s goals. Judging the quality of budgeting is not just comparing actual results to the budget but rather how the budget is monitored throughout the year. As things happen differently than planned, how is that communicated and how are decisions made to ensure the continued financial health of the government?
Presenting updated long-range financial projections in conjunction with the budget will allow the budget to be seen in a broader financial context. Don’t be afraid to discuss potential future challenges. Communities are expecting greater levels of transparency. A tax referendum or fee hike should not come as a surprise to citizens who have been attending your meetings and listening to the discussions about your financial situation.
In the current climate transparency isn’t just a buzzword, it is the reality. Governments, their boards and their administrators will be expected to share much greater levels of information with each other and their constituents. Look at your next budget presentation as an opportunity to satisfy this demand and demonstrate your skills.
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Steve Miller is a Senior Analytics Consultant for Forecast5 Analytics, Inc. – a technology company focused on software development and data analytics for the public sector. Steve has spent the past 15+ years working with school districts and other local government clients as an external auditor, school business official and consultant focusing on long-range financial planning.