Public Financial Management & Budgeting
Public Administration PPD 541
Fall 2013
Tim Gage
(916) 457-4003
Course Objectives
This course is intended to provide public administration graduates an overview of public agency budgeting and financial management. Public agency budgets are the means by which public resources are allocated and, as such, are central to the role of government. The course will provide an overview of the budget process, including the players and the strategies they employ, as well as provide students with the practical skills involved in understanding, analyzing and preparing budgets.
The goals of the course are to:
Achieve an understanding of the central role that budgets play in the state, local and federal systems of government.
Develop the skills needed to be an effective participant in the budget process, including cost analysis, revenue and expenditure estimation and preparation of budget justifications.
Familiarize students with several other important financial management activities including cash management, investing, capital budgeting and public sector borrowing.
Introduce some of the issues particular to budgeting in a nonprofit organization.
Discussion of these issues will include the historical context, legal issues and economic theories underlying current practices. The course is intended to provide you with a broad understanding of public finance issues. We will also spend time addressing budget issues in your work situations. In doing so, the goal is to develop a better understanding of the critical factors involved in budget decision making and improve your ability to communicate effectively in this arena. This will be achieved through the required readings, class discussion, in-class exercises, brief written assignments, acost analysis and a budget justification.
Required Reading
The text for the class is Fiscal Administration: Analysis and Applications for the Public Sector by John L. Mikesell (Wadsworth Publishing, 7th Edition, 2007). (Note that an 8th edition of the text is available and you are welcome to use it, but the page references for the text in this syllabus are to the 7th edition.)
In addition, you are required to read Memos to the Governor: An Introduction to State Budgeting by Dall W. Forsythe (Georgetown University Press, 3rd Edition, 2012),California In The Balance: Why Budgets Matter by John Decker (UC Berkeley Public Policy Press, 2009) and Guide to Local Government Finance in California by Multari et al (Solano Press Books, 2012).
Additional required readings intended to round out your understanding of the topics covered by the course are available in the form of a class reader from the Bookstore or USC Custom Publishing.
Class lectures and discussions will use the required readings as a jumping off point for discussion. For this reason, it is essential that you read the assigned readings. In addition, you are expected to be familiar with current events, such as the status of the state budget. Good sources for current budget and state and local government information are the Rough & Tumble website ( the Los Angeles Times and the Wall Street Journal.
Course Assignments
Your grade for the course will be based on class participation (10%), participation in discussion boards (10%), a cost analysis (20%), a budget justification (25%) and the final exam (35%).
Class Participation (10%): Your participation in class is essential to your success in this course. In addition to demonstrating your understanding of the material covered, collaboration in the form of verbal give and take is critical to developing creative solutions to challenges in the work environment. We will use issues and problems from your work settings to apply what you are learning in the class. In addition, we will briefly discuss several current public finance issues at the start of each class session. Please come prepared to discuss a public fiscal or budget issue from Rough and Tumble or another news source at the first in-person class meeting.
Discussion Board Contributions (10%): The course will involve weekly contact each week of the semester (except for the intensive weekends) consisting of a prompt such as one or more readings that I will askyou to respond to briefly via a question posed on a Blackboard discussion board. I will react to your responses and in turn ask you to react to my rejoinderand a fellow student’s posting.Each week’s required readings are specified below. Spelling and grammar count!
Cost Analysis (20%): A cost analysis relating to a typical public budgeting problem will be handed out at the end of the first intensive weekend and is dueNovember 4th. This exercise is designed to demonstrate your command of basic costing skills. The exercise assumes that you are already somewhat proficient with Excel or will acquire that proficiency in the course of doing the exercise. Students unfamiliar with using a spreadsheet are encouraged to contact me for suggestions regarding introductory materials. In addition, ungraded, in-class computational exercises will be used throughout the course.
Budget Justification (25%): You will be required to prepare a budget request in the form of a Budget Change Proposal (BCP) of approximately 5-6 pages in length. These budget justifications are due the first day of class of the 2ndintensive weekend (November22nd) and will be presented in class for discussion during theFriday, Saturday Sunday classes of the second intensive weekend. Details of this assignment will be made available at the end of the first intensive weekend of classes.
Final Exam (35%): The final exam will be conducted during the last in-class session and consists of a review of basic budget-related concepts, certain computational skills that will be covered in class during the course, and a brief essay..
Course Schedule
The course involves contact each week of the semester in addition to two three-day intensive weekends. That weekly contact utilizes the readings specified below and participation in a Blackboard discussion board regarding a question I will provide Sunday at the beginning of each week. You will be responsible for responding to this question by Wednesday evening and then responding to further comments I provide as well as your fellow classmates’ initial responses. The balance of the readings follow the flow of the topics that will be covered during the intensive weekends. Where I indicate that material should be skimmed, I really do mean skim!
Week 1 – August 26 – Public Goods
Required Reading: Fiscal Administration, pp. 1-15
Guide to Local Government Finance in California, Appendix A
Week 2 – September 1 – Control over Fiscal Policy
Required Reading: California in the Balance, Chapter. 2
Week 3 – September 8 – Measuring Performance
Required Reading: Guide to Local Government Finance in California, Chapter 7
Chapter 6 (Budgeting for Improved Performance) inA Budgeting Guide for Local Government, by Bland,(in the class reader)
“Why Measure Performance? Different Purposes Require Different Measures” by Behn
“Managing for Results in State Government:Evaluating a Decade of Reform” by Moynihan”
Week 4 – September 15 – Calculating Growth Rates
Required Reading: Fiscal Administration, p. 38 (Sidebar 2-2)
Week 5 – September 22 – Budget Balancing Tools
Required Reading:Memos to the Governor, Memo 5
California in the Balance, Chapter 5
Week 6 – September 29 – Taxes versus User Fees
Required Reading:Fiscal Administration, Chapters 7 & 11
Week 7 – October 6 –Breakeven Analysis
Required Reading:Fiscal Administration, pp. 149-150 (Sidebar 4-1)
Weeks 8 & 9 (First Intensive Weekend – Oct.18 -20)
Friday
Public Budgeting,What is a Budget, the Budget Process, How are Budget Decisions Made, Analyzing Costs
Required Reading: Fiscal Administration, Chapter 2 (except pp. 54-60); pp. 141 – 161 & 192 – 201
Memos to the Governor, Memos 1-4 & 6-8
California in the Balance, Chapters 1, 3 & 4
Guide to Local Government Finance in California, Chapters 8 (pp. 89-100) & 9
“Understanding the Role of Conflict in Budgeting” by Rubin
“The Dance of the Dollars: Classical Budgeting” by Wildavsky & Caiden
“Preparing Agency Budgets” by Rogers & Brown (Skim)
“How to Read a Budget” by Hayes
Saturday
Budget Documents, the Structure of California’s Budget, Performance Improvement, Internal Controls and Auditing
Required Reading: Fiscal Administration, Chapter 2 (pp. 54-56), Chapter 4 (pp. 161-170), Chapter 5 (pp.201 – 232)
Chapters 4 (Implementing the Budget) & 5 (Accounting and Financial Reporting from A Budgeting Guide for Local Government, by Robert Bland (in the class reader)
Sunday
Taxation, Estimating Revenues, Revenue Sources, Local Government Budgets and State-Local Fiscal Relations
Required Reading: Fiscal Administration, Chapters 3 & 13. Skim Chapters 8, 9 & 10
Guide to Local Government Finance in California, Chapters 2, 4, 5 (45 – 48), 6, 16, & SkimAppendix B
“State and Local Government Budgeting: Coping with the Business Cycle” by Wolkoff
“What You Should Know About Your Local Government's Finances” by the Governmental Accounting Standards Board
Week 10 – October 27 – Federal versus State Deficits
Required Reading: “The Rhetoric and Reality of Balancing Budgets” by Caiden
“Sustained Budget Deficits:Longer-Run U.S. Economic Performance and the Risk of Financial and Fiscal Disarray” by Rubin, Orszag & Sinai
Week 11 – November 3 – Discounting
Required Reading: Fiscal Administration, pp. 258-263
Cost Analysis due Nov. 4th
Week 12 – November 10– Strengthening the State Budget Process
Required Reading:California in the Balance, Chapter 7
Weeks 13 & 14 (Second Intensive Weekend – Nov. 22 -24)
Friday
Federal Budget Process, Budget History and Budget Reform, Student Presentations of Budget Justifications
Required Reading:“How Congress Controls Expenditures” by Ellwood
California in the Balance, Chapter 6
All Budget Justifications due at the beginning of class.
Saturday
Accounting, Cash Management and Investing, Pensions, Capital Budgeting, and Financing, Other Types of Financing, Student Presentations of Budget Justifications
Required Reading: Fiscal Administration, pp. 56-61 Chapters 6, 15 & 16
Guide to Local Government Finance in California, Chapters 3, 8 (pp. 101 – 107), 10-12
California Public Fund Investment Primer,(Skim) Chapter 1 (pp. 5-13); Chapter 2 (pp. 39-49); Chapter 3 (pp. 99-127); Chapter 5 (pp. 211-223)( primer.pdf)
“Beyond Total Return” by Finkelstein & Landerman
California Debt Issuance Primer, Preface & Chapters 1 & 7 (
“Budgeting for Capital Improvements” by Bland & Clark (Skim)
Sunday
Fiscal Management Issues in Nonprofits,Student Presentations of Budget Justifications,Final Exam
Required Reading:“Program Budgeting Works in Nonprofit Institutions” by Macleod
Week 15 – December 1 – Local Fiscal Reform
Required Reading: Guide to Local Government Finance in California, Chapter 17
Statement for Students with Disabilities
Any student requesting academic accommodations based on a disability is required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained from DSP. Please be sure the letter is delivered to me as early in the semester as possible. DSP is located in STU 301 and is open 8:30 a.m.–5:00 p.m., Monday through Friday. Website and contact information for DSP: (213) 740-0776 (Phone), (213) 740-6948 (TDD only), (213) 740-8216 (FAX) .
Statement on Academic Integrity
USC seeks to maintain an optimal learning environment. General principles of academic honesty include the concept of respect for the intellectual property of others, the expectation that individual work will be submitted unless otherwise allowed by an instructor, and the obligations both to protect one’s own academic work from misuse by others as well as to avoid using another’s work as one’s own. All students are expected to understand and abide by these principles. SCampus, the Student Guidebook, ( contains the University Student Conduct Code (see University Governance, Section 11.00), while the recommended sanctions are located in Appendix A.
Students will be referred to the Office of Student Judicial Affairs and Community Standards for further review, should there be any suspicion of academic dishonesty. The Review process can be found at: Information on intellectual property at USC is available at:
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