Part 1
Organization: City of Los Angeles
Budget Analysis Memo
Write a “big picture” analysis of the environment your organizations exist in. As we have discussed in class, these are factors that are outside the control of your organizations but have a direct and indirect impact into their operations (including budgets). Make sure to highlight key socio-economic demographics (max 2 pages)
Not an exhaustive list but will cover a good deal of what governments consider – as should you.
Population
Age distribution
unemployment
education
occupational complexity
income
poverty
housing stock
property values
crime rate
environmental factors
economic cycles
inflation
interest rates
competition between similar organizations
Part 2
Balanced Score Card
Since its inception in the 1990’s, the Balanced Scorecard (BSC) has been utilized by public, private, and non-public agencies as a tool for monitoring organizational performance. Its application is straightforward, intuitive, and worldwide.
For this section (max 2 pages)
a) Develop between two to four measures for each of the four BSC categories;
b) Provide rationale for your selection; and
c) Tell me how your measures relate to different layers of accountability, specifically, control, legal, and “value-added.” By “control,” I am speaking to simple budgetary control—spending within your budget. By “legal,” I am speaking to the notion that certain expenses may be allowed (e.g., grants or bond issues) but not others. Lastly—some KPIs may speak to value-added or customer satisfaction.
In crafting your response, think about the “investment” decision entailed with your measures, i.e., how do you justify future benefits with current expenditures relative to your KPI’s. Also remember that building organizational capacity and human capital tend to be the most neglected aspects of the BSC.
Notes on Balanced ScoreCard
balanced scorecard is a strategic planning and management system that is broadly applicable to organizations regardless of size or type
provides a method of aligning business activities to the vision and strategy of the organization, monitoring organizational performance against strategic objectives and, in the process, improves internal and external communication.
the essence of the balanced scorecard is that an organization must address a range of perspectives to be successful and sustainable.
scorecard helps monitor the organization from four perspectives which are considered critical to any organization’s success:
Financial
Customers
Internal Processes
Learning & Growth
balanced scorecard system promotes the idea of cause and effect – the interdependent relationship that exists between objectives and measures within and across each perspective.
Example:
If we improve employee access to information and provide our employees with better systems and more training (Learning & Growth), then our employees will have a better understanding of citizen/customer needs and be able to offer customized products and services to meet those needs (Internal Process).
• As a result, citizens/customers will be more satisfied and use a wider range of services (Customer) and this will broa den our revenue base and make us more financially sustainable (Financial).
MAKE SURE that your Balanced Scorecard is driven by the what was highlighted in your budget memo.
