Annually each Fund’s budget provides the details of the budgets for the Departments within the Fund. Within each Department is one or more Functions which the department performs usually providing some service to the public. The approach here is to find the real cost of each Function in providing the service.

But first we want to make sure that processes that are presently done in each Function are the best or the most efficient method for doing the work. I have recommended two methods of doing this the first I call the “Cost and Schedule” method. This method requires the service of a time study analyst to time study all of each Function’s processes both in the office and outside. This process works best for repeated Functions such as mowing a public park. The time study analyst will determine the best method for doing the work and will determine the correct allowed time for each process. From this data the correct staffing can be determined and ultimately the correct budget for the Function.

The second method is the implementation of “Work Improvement Teams (WIT)”. Others have called this method “Total Quality Management (TQM)”. Since most people outside of a manufacturing environment have trouble understanding the role of the word “quality” I prefer the (WIT) name. I have given detail information on the WIT approach in the references below. The teams are organized one for each function and meet once a week. The main goal is in finding the best way to do each of the processes of the Function. The WIT would depict the detailed processes for the improved method of performing the Function on a flow chart.

The best way I have found for doing this is to tape up white butcher paper around the walls of a conference room. The processes to be shown on the butcher paper are created on separate small pieces of paper and are taped to the butcher paper allowing the processes to be easily repositioned without permanently damaging the butcher paper. When the meeting is over the butcher paper can be easily rolled up and take away. A flow chart on the wall has an advantage over that in a book when it is presented to the city administrator and the city council by the WIT.

The most important part of the flow chart is in getting each process between (15) minutes and (60) minutes in time length detailed enough for team members to more easily determine the best method. The flow chart is then turned over to the budgeting department and to be used in estimating the time for the function to produce an item or document or a service. Note that this method though not as exact as the “Cost and Schedule” Time Study analyst method can be just as valid for staffing purposes in determining whether another person should be added or removed from the payroll. As in the first method a Funding Formula can be developed for use in developing the budget.

The WIT method costs less to implement and is generally better accepted by employees because they are empowered to solve their own work related problems. The Cost and Schedule method works best where it is necessary to meet schedules and where there is a significant cost associated with missing a schedule.

I recommend the budgeting of Functions rather than Departments which gives greater control of the budget to the city administrator. I also recommend that each Function’s budget be tied to the number of expected items or documents to be processed by the Function. Note that since the time to produce an item or a document has been documented by the process Flow Chart (or by time-study) all costs associated with the Function can be summed into a Funding Formula. To get the next years budget you simply multiply the Funding Formula by the expected number of items or documents for the coming year. This method works best where the item or documents or service produced is easily defined but can also be used to increase the accuracy of less well defined processes. Note that once defined a process can be used for budgeting purposes until it changes which may be for several years. This method also works well with Performance Budgeting.