Discussion: Forecasting Models
It is not enough to simply create a budget. Agencies must attempt to predict the outcomes of their budgets over time to be effective. Private agencies use strategic planning to predict the outcomes of their budgets. Strategic planning is used to determine goals and measurable objectives of an agency. Strategic planning looks at changing environmental factors in relation to the future revenues and expenditures available to an agency. Similarly, public agencies, like criminal justice agencies, use a process called forecasting to predict how efficient and effective their budgets will be over time. Forecasting considers the present administrative style, structural conditions, demographics, and economic environment when analyzing public budgets. There are a number of forecasting models that may be used when estimating future revenue and expenses. A local or state government is likely to choose a forecasting model based upon factors such as the size of the budget and the resources available to conduct a forecasting analysis. Additionally, understanding the revenues and having honesty in reporting are key factors that contribute to sound forecasting.
To prepare for this Discussion:
- Review Chapter 6 in your course text, The Basics of Public Budgeting and Financial Management, and take note of the various forecasting models outlined.
- Review Chapter 7 in your course text, The Basics of Public Budgeting and Financial Management, and think about how financial management affects budgets.
- Review the video segment “Budget Forecasting” and consider how forecasting is used to predict budgetary needs for criminal justice programs.
- Select a criminal justice agency or program with which you are familiar.
- Review the “Forecasting Models” document located in the Learning Resources and select a forecasting model to use for this Discussion.
- Consider how the forecasting model you selected could be used with the budget from the criminal justice agency or program you selected.
- Think about you might justify the forecasting model you selected and consider why it is the best choice for that agency or program.
- Consider how the forecasting model might assist in financial management of the agency or program.
With these thoughts in mind:
Post a brief description of the criminal justice agency or program and the forecasting model you selected. Then explain how the model might be used with a budget from the agency or program. Finally, justify why the model you selected is the best choice for that agency or program and how it assists in financial management.