University of Colorado Denver
SCHOOL OF PUBLIC AFFAIRS
PUAD 5503: Public Budgeting and Finance
Spring 2017
Tuesdays, 5:00-7:45 PM
Plaza Building, Rm. 112
Instructor: Alexis Kennedy
Email:
Office Hours: by appointment (and via Zoom or in person)
Course Description:
The primary objective of this course is to teach students how to use financial information to make decisions in public organizations. The secondary objective is to help students develop the financial skills and communication abilities required of public managers. The course focuses on managerial and financial accounting. More specifically, students are introduced to tools for developing, implementing, and controlling a budget within an organization. Topics include the development of operating budgets, cash budgets, break-even analysis, cost behavior, the time value of money, capital budgeting, long-term financing, and variance analysis. We will also be introduced to the primary accounting statements and governmental accounting. This course also focuses on developing spreadsheet skills. Budgeting and financial decision-making require these skills. It is assumed that students have little prior knowledge or use of a spreadsheet program. We will develop these skills throughout the course, in assignments and optional tutorials, and apply them to the topics we cover.
By the end of this course, you will be able to:
- Develop various budget documents
- Read and interpret a budget
- Understand different types of budgets, and how each aids in decision making
- Use Excel throughout the budgeting process
- Understand the basics of financial accounting
- Read and interpret audited financial statements
- Perform basic financial condition analysis
MPA Program Competencies:
MPA Objective/Target Competency / Relevant Course ActivitiesTo lead and manage in public governance / Students will learn how to develop, implement, and control a budget within an organization.
Students will become aware of budgeting management strategies and planning practices.
To analyze, synthesize, think critically, solve problems and make decisions / Students will learn how to read, analyze, and synthesize different budget formatsand multiple budget requests into a larger budget document.
Students will be introduced to financial, democratic, ethical, and equitable considerations to help make decisions on how to allocate resources.
Students will critically review and synthesize the existing literature on public budgeting and finance.
Students will develop analytical and quantitative skills.
To articulate and apply a public service perspective / Students will assess competing perspectives and integrate these into debate, discussion, and assignments.
To communicate and interact productively with a diverse and changing workforce and citizenry / Students will have ample opportunity to hone writing and communication skills through course assignments, including using memos and spreadsheets.
Students will also gain experience with the peer review process by providing feedback to their colleagues.
Course Requirements and Prerequisites:
1. This course assumes some familiarity with and access to data entry and word-processing packages (Excel and Word). If you do not have these programs on your private computer, you can access them at the SPA computer lab located on the 5th floor at 1380 Lawrence St.
2. Students must have reliable access to their university email account and to Canvas, to and from which data and text files can be transmitted. Course information will be communicated via the student’s university email address.
Course Materials:
Steven A. Finkler, Daniel L. Smith, Thad D. Calabrese, and Robert M. Purtell, Financial Management for Public, Health, and Not-for-Profit Organizations, 5th Edition, 2017, Sage/CQ Press (referred to as “Finkler” afterwards). Note: The 2013 4th Edition from Prentice Hall is also acceptable.
City and County of Denver Mayor’s Proposed 2017 Budget
The remaining readings, listed below, as well as the Denver budget, are available on Canvas.
Course Electronic Shell—Canvas:
Materials for this course will be administered through Canvas. Canvas is also how you will submit assignments. To access, go to
Once you login to Canvas using your CUD credentials, click on PUAD 5503 001 Spring 2018.
Office Hours- Zoom:
I am periodically on campus in addition to being around for class. Therefore, office hours are by appointment only. You can reach out to me to see if we can meet in person or we can chat via Zoom which you have an account for by being a CU Denver student. Go to to login using your CUD credentials.
ASPA Smartbrief:
Sign up for ASPA Smartbrief. You will be asked to bring an article from here or another news source once during the semester for discussion purposes.
Course Requirements and Grading:
Your course grade will be determined as follows:
Assignments / Percent of Final Grade / PointsClass Participation/In-Class Exercises / 5% / 50
Homework (5) / 20% / 200
Projects (4) / 50% / 500
Final Exam/Take-Home Project / 25% / 250
Total: / 100% / 1000
My grading criteria and the weight for each assignment for the final grade are included on the instructions for each individual assignment. PLEASE refer to the assignments on Canvas and read each assignment description carefully. For the final grade, I grade on a 100 point scale (divide the 1000 points possible by 10). The grade equivalent for the scale is:
A=94-100 pointsA-=90-93.9 points
B+=88-89.9 pointsB=84-87.9 pointsB-=80-83.9 points
C+=78-79.9 pointsC=74-77.9 pointsC-=70-73.9 points
D=66-69.9 pointsF=65.9 points or below
Class Participation/In-Class Exercises (5%):
Students must complete the reading assignments before class and come to each class prepared to summarize and discuss them. We will typically engage in problem-solving exercises, debate, discussion, and case study reviews during the class period. Students are expected to actively participate in class. Excessive absence and/or unwillingness to participate in class discussions will result in grade reduction. Class participation is evaluated by the following criteria:
• Contributions: frequent and consistent; high-quality ideas; succinct, cogent examples and arguments; integrate course readings and personal experiences.
• Listening: process and reflect on comments of students and instructor.
• Integrity: respectful; inclusive; welcoming; sincere commitment to learning.
Each student will be responsible for presenting two article summaries to the class (on two separate dates determined at the first class):
A) a 5-minute summary of an assigned reading
B) a 5-minute summary of a relevant media article
Summaries should include a short write up to be handed in (no more than a single page, 12 font, double spaced) and be able to speak to the class. Presentations and write up should include1) an overview, 2) major takeaways, and 3) criticisms/additional questions raised by the reading. Students should be prepared to lead a short discussion on the topic.
Emergency Memo: Sometime after spring break, (it’s a surprise), students will participate in an emergency memo group project in class. Full explanation of the activity and instructions will be made available on that date.
Homework (20%):
Five(5) homework assignments allow you to actively apply the content from the current readings. I encourage you to discuss the homework in small groups, but you must write up your own answers (two students turning in identical homework assignments constitutes cheating). Spreadsheet templates will, in most instances, be made available via Canvas. Homework and projects are due at the beginning of the session via Canvas. If you do not submit your assignments by the due date, you will receive a deduction of 10 percent of the points each day after the missed date. After 3 late days, I will no longer accept assignments. If students have extenuating circumstances beyond their control, then I will consider an extension on the due date. Approval must be requested prior to the due date.
Homework / Points / Class Session and Due Date / Skills/Topics#1: Finkler 2-24 (Local Hospital), 2-25 (Roche City) / 15 / Class 2,
January 23 / Operating budgets, Cash budgets
#2: Finkler 3-27 (Georgeville Police), Bland Excel Exercise #1 / 35 / Class 3,
January 30 / Program budgets, Cost allocation, Budget projection
#3: Finkler 4-46 (Jamestown Clinic), Mead Meals on Wheels Center Case Study, Questions 1 and 2 / 50 / Class 4,
February 4 / Costs (fixed, variable, average, total, marginal), Break-even analysis, Operating budgets
#4: Finkler Mead Meals on Wheels Center Case Study, Questions 4-6 (response in memo format) / 50 / Class 10,
March 27 / Net Present Value (NPV), Interest expense, Depreciation expense, Operating budgets
#5: Lafayette Library Accounting Problems and CAFR Scavenger Hunt / 50 / Class 14,
April 24 / Accrual accounting, Balance sheet, Activity statement, CAFRs
Projects (50%):
Projects are designed for you to apply the course content in practical settings. In the projects, you will 1) use a variety of methods to forecast sales tax revenue for a city, 2) develop a proposed budget for a new municipal program, 3) analyze a proposal for the privatization or partial privatization of a public service, and 4) extend a program budget using various scenarios in a team setting. Be prepared to share your findings with the class. The late policy is the same as described above for homework assignments.
Project / Points / Class Session and Due Date / Skills/TopicsForecasting Revenues Project / 100 / Class 6,
February 20 / Inflation adjustment, Forecasting methods, Calculating forecasting error
Northville I Budgeting Simulation / 150 / Class 8,
March 6 / Flexible and transparent budgets, Cost types, Parameters and assumptions
Budget Justification Project / 100 / Class 12,
April 10 / Time value of money, Net present value, Budget justification
Northville II Budgeting Simulation / 150 / Class 15,
May 1 / Teamwork, Personnel scheduling, Program budgeting, Break-even analysis
Take-Home Final Exam (25%):
The final examination/project for this class will be posted on Tuesday, May 1 after class andis due on Tuesday, May 8th by midnight.
Extra Credit- Budget Hearing Observation Memo (1.5%):
Attend a state or municipal budget hearing. Write a two page double-spaced memo describing and analyzing the hearing along several dimensions (i.e. the hearing topic, the role of elected officials, staff involvement, public engagement, and use of evidence for budget justification). It is acceptable to virtually “attend” the hearing, but attending the hearing in person is highly recommended. Include the hearing agenda, if available, with the memo. The memo guidelines will be available on Canvas. The memo is due any time before May 8th.
1
Class / Date / Topics / Assignments Due1 / January 16 / Course Overview
Excel Tutorial
Memo Writing
Pre-course Survey
Budget Types
2 / January 23 / Budget Formats
Budgeting Process and Politics / Homework1: Finkler2-24(Local Hospital), 2-25(Roche City)
3 / January 30 / Budgeting in Nonprofits and Federal Government:
Guest Speakers / Homework2: Finkler3-27(Georgeville Police), Bland ExcelExercise #1
4 / February 6 / Budgeting Process and Politics, Continued
Understanding Costs and Break-Even Analysis / Homework3: Finkler 4-47(Jamestown Clinic), Mead Meals onWheelsCenter Case Study Questions1 & 2
5 / February 13 / Revenues, Histories, and Forecasting
6 / February 20 / Capital Budgeting / Project 1: Forecasting Revenues Project
7 / February 27 / Capital Budgeting and Long-Term Financing
8 / March 6 / Budget Justification and Professional Ethics / Project 2: Northville I
9 / March 13 / Performance Management and Citizen Input
No Class: March 20, Spring Break
10 / March 27 / Budget Constraints and Solutions / Homework 4: FinklerMead Meals on Wheels CenterCase StudyQuestions 4-6 (in memo format, with supporting spreadsheets)
11 / April 3 / Budget Allocation, Equity, and Diversity Issues
Introduction to Financial Accounting
12 / April 10 / Financial Accounting, Continued / Project 3: Budget JustificationMemo
13 / April 17 / State and Local Government Accounting and Reporting
14 / April 24 / Financial Statement and Condition Analysis / Homework 5: Accounting Problems Handout & CAFR Exercise
15 / May 1 / Innovative Finance
Course Review / Project 4: Northville II
16 / May 8 / Take-Home Final Exam Due
1
Detailed Course Outline:
Class 1: Course Overview, Excel Tutorial, Memo Writing, Pre-Course Survey, and Budget Types
Class 2: Budget Formats, Budget Process and Politics (Hot Topic: Budget response to a natural disaster)
Read before class:
1) Finkler, Chapter 1, Chapter 2 (to the middle of pg. 45) and Chapter 3 (up to the section on forecasting on pg. 91)
2) City and County of Denver 2016 Budget, Budget Introduction and Budget Summary, pgs. 1-27.
3) Mitchell, David and Kurt Thurmaier. Foundations of Public Administration.Currents and Undercurrents in Budgeting Theory: Exploring the Swirls, Heading upstream, 2012.
Homework #1 due:
Finkler Problems 2-24, Local Hospital, 2-25 Roche City (1.5% of final grade)
Optional
1) Watch “Get to know Excel 2010: Create formulas” at (if not already comfortable using Excel)
2) “Budget” Exhibits 1 & 2 based on “Introduction to Spreadsheets” handout (if not already comfortable using Excel)
Class 3: Guest Speakers, Budgeting in the Federal Government and Nonprofits
Budgeting Process and Politics
Read before class:
1) Finkler, Chapter 2 (remainder) and Chapter 3 (remainder)
2) Rubin, Irene. “The Politics of Public Budgets” in The Politics of Public Budgeting, pgs. 1-33.
3) Mikesell, John. “Budgets and Political Strategies” in Fiscal Administration, 7th ed, pgs. 61-69.
4) “The Budget Calendar & Process”, pgs. 28-29 and “Budget Basis and Appropriation Rules”, pgs.679-680 in City and County of Denver 2016 Budget.
5) Center on Budget and Policy Priorities, Introduction to the Federal Budget Process, Updated January 3, 2011.
6) Circular No. A–11: Preparation, Submission, and Execution of the Budget, Executive Office of the President Office of Management and Budget, July 2016. (Sections 10 and 15)
7) Mikesell, John L. and Daniel R. Mullins. Reforms for Improved Efficiency in Public Budgeting and Finance: Improvements, Disappointments, and Work-in-Progress. Public Budgeting & Finance 31.4 (2011): 1-30.
Homework #2 due:
Finkler Problem 3-27, Georgeville Police, Bland Excel Exercise #1 (3.5% of final grade)
Class 4: Understanding Costs and Break-Even Analysis
Read before class:
1) Finkler, Chapter 4
2) Mullins, Daniel R., and C. Kurt Zorn. “Is Activity‐Based Costing Up to the Challenge When It Comes to Privatization of Local Government Services?” Public Budgeting & Finance 19.2 (1999): 37-58.
Homework #3 due:
1) Problem 4-46, Jamestown Clinic & Mead Meals on Wheels Center Case Study (Questions 1 & 2) (5% of final grade)
Class 5: Revenues, Histories, and Forecasting (Hot Topic: Public pension systems)
Read before class:
1) Wang, XiaoHu. “Revenue Forecasting,” in Financial Management in the Public Sector, M.E. Sharpe: 2010.
2) Mikesell, John L. and Justin M. Ross. State Revenue Forecasts and Political Acceptance: The Value of Consensus Forecasting in the Budget Process. Public Administration Review 74.2 (2014): 188-203.
3) Ammons, David M. “Adjusting for Inflation When Comparing Revenues or Expenditures,” in Tools for Decision Making, CQ Press: 2002. 4) Allan, Ian. “Evaluating Alternate Revenue Sources”, Ch. 16, in Budgeting: Formulation and Execution. 1996.
5) Peng, Jun. “Sustainable Approaches to Retiree Benefits”, in Handbook of Local Government Fiscal Health, Helisse Levine, Eric A. Scorsone, and Jonathan B. Justice, eds. Jones & Bartlett Publishers, 2012: pgs. 183-204.
Homework: Work on Forecasting Revenues Project due next week.
Class 6: Capital Budgeting
Read before class:
1) Finkler, Chapter 5
2) Marlowe, Justin, Rivenbark, William C., and A. John Vogt. Capital Budgeting and Finance: A Guide for Local Governments, ICMA: 2nd edition, 2009. Chapter 3 excerpt, pgs. 70-86.
3) “Denver Capital Improvements Program”, Six-Year Capital Program Plan 2013-2018 (CIP), pgs. 5-15 and 71-72 (also skim through some project overviews).
4) “Denver Capital Improvements Program”, Six-Year Capital Program Plan 2008-2013 (CIP), CIP Priority System in Appendix.
Project due:
Forecasting Revenues Project (10% of final grade).
Class 7: Capital Budgeting (continued) & Long-Term Financing (Hot Topic: Better Denver
mini-bonds)
Read before class:
1) Finkler, Chapter 6
2) The Bond Market Association. “Overview of the Municipal Bond Market”, in The Fundamentals of Municipal Bonds. Wiley Finance, 2001.
3) Official Statement Examples (skim)
4) Whaley, Monte. “Weld County only one in Colorado without long-term debt”.The Denver Post, January 27, 2011.
Homework: Work on Northville 1 project due next week.
Class 8: Budget Justification and Professional Ethics
Read before class:
1) Finkler, Chapter 8 (Note: You are skipping over Chapter 7 for now)
2) Mikesell, John. “Preparation of Agency Budget Requests” in Fiscal Administration, 7th ed., pgs.141-148.
3) California Department of Finance, “How To Write An Effective Budget Change Proposal”, 2000.
4) California Department of Finance, “Parlin Fork Conservation Camp” & “Commission on Improving Life Through Service” BCPs. (skim)
5) Bardach, Eugene, “Report from the Trenches: The Life of the Apprentice Budget Analyst”, Journal of Policy Analysis and Management 24.2 (2005): 419-433.
6) Circular No. A–11: Preparation, Submission, and Execution of the Budget, Executive Office of the President Office of Management and Budget, July 2016. (Skim Section 51 - Basic Justification Materials)
Project due:
Northville I (15% of final grade)
Class 9: Performance Management and Citizen Input
Read before class:
1) Bland, Robert. “Budgeting for Improved Performance,” Ch. 6, A Budgeting Guide for Local Government, ICMA Press: 2nd ed.
2) Joyce, Philip G. The Obama Administration and PBB: Building on the Legacy of Federal Performance-Informed Budgeting? Public Administration Review 71.3 (2011): 356-367.
3) City and County of Denver 2013 Citizens’ Budget, pg. 23 plus three program overviews of interest to you (such as Energy Management, Graffiti, Outdoor Aquatics and be prepared to discuss them in class).
4) Zients, Jeffrey D. Memorandum to the Heads of Executive Departments and Agencies: Use of Evidence and Evaluation in the 2014 Budget, Office of Management and Budget, May 18, 2012.
5) Government Performance and Results Act (GPRA) examples. (skim)
Class 10: Budget Constraints and Solutions (Hot Topic: Government bankruptcy)
Read before class:
1) Finkler, Chapter 7
2) “2010 Budget in Brief: Budget Impacts”, 2010 Denver Budget Introduction, pgs. 8-9.
3) “Financial Policies” and “Reserves”, 2016 Denver Budget Introduction, pgs. 30-37.
4) Martell, Christine, and Paul Teske. "Fiscal Management Implications of the TABOR Bind." Public Administration Review 67, no. 4 (2007): 673-87.
5) Waisanen, Bert. “State Tax and Expenditure Limits—2008.”National Conference of State Legislatures.
6) Ives, Martin and Thad Calabrese. Creating Deficits with Balanced Budgets.Journal of Government and Financial Management 60.4 (2011).
7) Mikesell, John. “When Government Finances Go Horribly Wrong” in Fiscal Administration, 7th ed, pgs. 592-593.
Homework #4 due:
Finkler, Mead Meals on Wheels Center Case Study (Questions 4 to 6, response in memo format). (5% of final grade)