Free «Financial Management» Essay Sample

Introduction

Following the allocation of funds by the city manager worth $ 10 million dollars, it is necessary to make areporton the proposed expenditure plan for the city council. This is to help assist in managing thepublicfunds. This will include planning, organizing, directing and controlling thefinancialactivities of the city council’sallocation,as well as the federal funds.To ensure thecouncilgets aregularand adequate supply of funds from the federal government, it needs to meet thesetfederal standards for applications.Once the city council obtains the funds, they should be utilized in the mostmaximumwaywhile reducing costs. The funds are for the capital investment, operational requirements, aseconomicincentives encouraging private investments in the city or subsidizing non-profit organizations. Apart from the above activities, the city council will carry out disaster preparedness and response, as well as improving the social amenities in the city so as to improve livelihoods and standards of living.

Capital requirements are thecapitalinvestments that the city council requires to be effective and increase profits. This means that the money invested in a business must be used in purchasing fixed assets rather than covering thebusiness'day-to-dayoperating expenses (Ward, 2011).

Operational requirements are the things neededfor the day to dayrunning of the business. In this case,this is what the city council needs for its daily operations. They could be fixed or variable innature. Fixed costs are those costs incurred, regardless of the amount of business.A typicalexample would be an office space or salary costsof permanent members of staff. While all costsarevariableover time, it isessentialtoincludecosts that are difficult to remove and that do not vary widely.

Variable costs arecosts whichchangeaccording to theamount of business. If there are ten times as many flight bookings, the variable costs willgoup ten times (Tatum, 2011).

Subsidizing non-profit organizations means that some money will have to be used togivesubsidies in a way that it complements or supplements nongovernmental organizations efforts. This may involve partnering with local nongovernmental organizations. Using economic incentives to encourageprivateventures in the city will also be one of the key objectives. This willensurecomplimenting and supplementing of the city council efforts for the smoother and easierrunningof the business. Additionally, the city council will ensure the delivery of social amenities to the members of thepublictoenhancebetter living standards. This will also helpcreatemeasures that can be taken toenhancethe disaster preparedness and response.

Discussion

Meeting the Federal Requirements

The city council must meet the following requirements by the federal government while applying for the funding; accounting procedures and fiscal control of the city council has to be sufficient to permit preparation of reports required the federal government, andthe funds tracing to a level of the expenditures which are adequate toestablishthat funds have not beenmisappropriated.

The financial management systems of the city councilmustmeet the following standards:

The financial reporting. Current, accurate and the financial results offinancial activities have to be made,according to the financial reports requirements of the following grant. The council willattachcurrent financial reports of previous funds or grants from other organizations.

Accounting records: The councilhas to maintain records that adequately identifythe application and source of funds provided forthe financially assisted activities. Those records should contain informationofthe grant authorizations and awards, assets, expenditures, liabilities and income.

The internal control: The accountability and effective controlshould be maintained for all cash and grant, personal and realproperty and other. Forexample,the city council’s real estate project. The city council must defend all propertyandmake sureitis usedfor solely authorized purposes. This means that thecouncilin its application for the match must commit itself tosafeguardevery asset orcashfrom the federal funding, as well as the city council funding.

The budget control: The actual outlays or expendituresshould be compared to budgeted amountsofthe federal funding. The financial information should be related to the productivity or performance.

The data which include the development of the unit costsinformation andwhenever possible, the council will useavailable documentationtogenerateestimates for budgets. Such as operational costs should be estimated fromthe previousbudgets, so the city council must submit thepreviousbudget and the finalexpendituretoenhancethe budgetcontrol.

The sourcedocumentation: The accounting records should be supported by thesources documentation as,payrolls, paid bills, , attendance and time records. For instance, toshowthe pay roll of all permanent employees, previous payrolls must be provided. This also applies to all otherfixedadministrative costs like telephone bills.

Cash management: The city council should establishthe reasonableprocedures to make sure that thecash balances, receiptof reports and cash disbursements are accomplished in sufficient time. This would enable them to prepare the accurate and complete cash transactions reports to the federal government.

In applying for the match, thecouncilshall only use the standard application forms as prescribed by the federal government. The council willsubmitthe original and two copies of applications. It will alsospecifyand describe the programs, functions, or activities toplan, budget, and evaluate the work under thematchfund (U.S Department of State, 1999).

Capital Investment

Reasons for the capital investment include: replacingcapitalequipments, increasingefficiencyand expandingcapacity.The council will invest in the forexmarketand real estate for the expand capacity, andpursueinfrastructural rehabilitation of roads, ICT and buildings. Moreover, the council willreplacecapitalequipments, i.e. computers, printers, vehicles, shelves and any other outdated equipment from every department by disposal ofolditems throughbiddingby members of the public in the city, and excluding the city council staff. Other organizations in the city, such as nongovernmental organizations, mayreceivethese items as donations.

A fraction of the money willpurchasethe fixed assets and for infrastructural development. This will include things like Road rehabilitation, Information Communication and Technologyimprovement, investing in the capital market, rehabilitating city council buildings like the city hall (Tatum, 2011).

This is themost crucial part of thebudgetwhich requires alargeallocation of the budget funds. An estimated 200,000 members of the publicusepublic roads, sidewalks, railways and city halls which so they must be rehabilitated. This will also include lighting, beautification and structural enhancements to theexteriorof specifically identified community structures. This will take 50% of the budget, which is $10 million dollars.

Half of this, $ 5 million dollars, will come from both the city council’s funds and the other half, $ 5 million dollars, from federal funds.The investment in the forex andcapitalmarket will ensure that the council has financial security which can lead to the council investing in real estates.Though the returns of some investments will not be infinancialfigures, the economic and socialvaluewill benefit most of the population; some of these areas include the rehabilitation of roads, ICT improvement and buildings.

The finance department will beresponsiblefor managing and controlling thebudgetunder the supervision of the finance manager (Tatum, 2011). Out of the $ 10 million dollars, $ 5 million dollars for the real estate investment and $ 2 million dollars for forex andcapitalmarketinvestment. $ 2 million dollars for infrastructuralinvestmentor rehabilitation as identified. Asurvey should be carriedout todeterminewhatthe priorities are. The research coordinator willspearheadthe carrying out of thesurveyandthereafterthefinancemanagerwill allocate funding in order of priority and importance.

The remaining $ 1 million dollars should be used to replace outdated equipments to ensure the efficiency in service delivery. Every department willidentifyoutdated items for the disposal where the departmental administrators willoverseethedisposalprocess.

Operational Requirement

Operational requirements are the costs incurred in the daily running of the city council. They could be fixed or variable innature. Fixed costs are those costs businesse incur regardless of the amount of business done. Acommonexample would be office space or salarycosts of permanent members of staff.Although most costs arevariableover time, it iscrucialtoincludethose costs which areexceedinglydifficult to remove and that do not vary widely, according to the amount of business.

Variable costsare costs whichchangeaccording to theamount of business done (Tatum, 2011). For instance, if the city council requires casuals todobuildingand construction in its three buildings andlaterhas six, that means thelaterwill require twice as manycasuallaborers as the three buildings require.

The fixed costs include salary for permanent employees, wages for temporary employees and wages forcasuallaborers. Others include utility bills like electricity, broadband internet connection, telephone, web hosting, banking services, insurance charges. This cost is anapproximationfrom the previous budgets, since most charges are not likely to vary from thepreviousbudget allocations, an estimated of $ 2 million dollars.

The variable costs could be procurement ofofficestationery, repair and maintenance, hiring and training, taxes, fuel costs and other charges as identified by the operations departments (Raja, et al, 2006). This will require abudgetof $ 2 million dollars, since most costs are variable but not as expensive as the fixed costs. Operational requirements require $ 4 million dollars in total. Half of this will be from the city council funds, $ 1 million dollars and $ 3 million dollars from the federal funds.

Subsidizing Non Governmental Organizations

Subsidies are ameansfor governments to promote thegrowthofindustries or regions toenhancethe social welfare. Part of a country’s GDP spent each year by governments is to; supplement the farmers’ income, help unemployed workers find jobs, fund research into new technologies,dischargethe costs ofexplorationand research in industries, assist companies to invest in eco-friendly technologies,lowertheeducationcost andmedicineto thepublicandnurturegrowing manufacturing industries.

These subsidies usually achieve objectives likeeconomicandindustrialdevelopment, research and innovation, redistribution and environmental protection (Raja, 2006).

In this case, the city council willsupplementor complement the efforts of the Non Government Organizations (NGOs). This will include making grants to the NGOs, collaborating with the NGOs with similar interests and commonobjectiveas the council. This will be a community based project dubbed “Clean and Beauty Community Based Project). This will help to involve membersof the communityin the decision making, as well asthe activities of the council. For instance, the city council willdonatesome of the office equipments andfurnitureto be disposed, to the young NGOs to help them establish themselves, as well as increase theirefficiency(Raja, 2006). The administrators in every department will oversee this function.

Furthermore, the city council will collaborate with NGOs that have projects which are in line with its objectives. The corporate affairsdepartmentwill implement this as part of the council's social and corporate responsibility. The objective of this project will be tofundthe development, implementation and oversight of a varietyof community based projects with the specific focus onthe environmental stewardship, anti-littering, blight reduction andbeautification.

This will also includepersonnel/labor, administrativeoversight, materials, equipment and related maintenance costs. Ratherthan separate funding of the stipend programs,the new community-based projects should includecomponentfor stipends. Where appropriate, these are topaylocal youth and/or other community members for participating in dumping prevention and beautification activities.

The Clean and Beauty Community Based Projects to be funded would be solicited throughopenRequest for Proposals process and could include; Neighborhood Clean Ups Projects, Greening Project, and Mentorship Programs.

The Clean and Beauty project will take $3 million of the budget.Theproject'smoneywill come from the city council’sfundtopreventsub-granting of the federal funds.Moreover, it will help avoid the requirements of the federal funding sub-granting which mayinvolvea lot of bureaucracy.

The proposals should include thestatementof the problem, introduction, objectives, goals, expected output, breakdown of different activities and thepopulationit intends toreachin the city, Project implementation plan, budget and a logical framework matrix. The organizations selected should bewillingto expand their programs, so that they canservemore than 150, 000 people in the city in each of its activities. The organization shouldcontribute25% of the amount they expect from the city council, while the community contribution should be 25% of the requested amount. The NGOs selected will report to the citycouncilevery three months, that is, quarterly and the progress report should be of this format:

2012 Clean and Beauty Community Project

Progress Report

Organization:

_____________________________________________________________________

____________________________________________________________________

Contact Person:

_____________________________________________________________________

Progress Report Period:

__________________________________________________________________

Description of the Project

This provides a brief description of the services delivered with the Clean andBeautycommunity based project. This information should be consistent with information in the Service Plan attached to your City/County Agreement signed on the award.

Tasks Accomplished

This provides narrative information (can be in bullet points) about the various tasks that eachorganizationcompleted during the Contract period (should consolidate/update the information included inpriorProgress Reports, as well as anyadditionalwork completed, since the last report submitted).

Number of Persons Served from the City

Each non-governmentalorganizationshould provide thepopulationserved by different services.

Project’s Meeting Attendance

Each nongovernmentalorganizationshould provide all minutes of all meetings held by the Clean and Beauty Community based project. The meetings should be conducted on a quarterly basis during the contract period.

Successes

Identify how well eachorganization’s project achieved the anticipated goals/outcomes identified in their proposals. Each nongovernmentalorganizationshouldhandin success stories resulted by your project’s activities, previouslyunidentifiedin your originalproposal.

Challenges

Identify the challenges during the implementation andspecifyany unmet goals or objectives, in case of any, and why?

Lessons Learnt

Each nongovernmentalorganizationshould share lessons learnt from the participants of the project.

Feedback from Community

Each nongovernmentalorganizationshould share the feedback from the members of the city, the community, which should include copies of quotes, emails/letters received and findings of completed surveys/evaluations.

AnyadditionalImportant Information

Each nongovernmentalorganizationshouldprovidefurtheradditional information about their work that could not fit in any other sections through the attached photos.

Expense Summary

Each nongovernmentalorganizationshouldgiveasummaryof expenses, and in case of overspending, attach copies of invoices of transactions for reimbursement.

Using Economic Incentives to Encourage Private Ventures

There arevarioustypes of incentives:material incentives and tangible rewards, such as remunerations. Solitary incentives include intangible rewards like status andsenseof identification. Purposive incentives are the intangible rewards related to the organization’s goals. (Clark and Wilson 1961).

Theprimaryreason cities and states offer incentives isto remain competitive. When the company chooses toexpandlocally or relocate, internationally or nationally theynarrowtheirresearch to citiesthatappeartomeettheir needs. The desire of thecommunity and/orstatetohavethecompanyin theirlocality dictates their interest and ability to invest in it. This will be through the capital investment and jobs the company will bring (Rives, 2009). CorporateAmerica has increasingly come toexpect incentives as a standard part of doingbusiness. Incentivesincrease due to competing states being more aggressive with what they have tooffer. Site Selection magazine conducted a survey of the corporate real estate professionals. Almost 80 percent of respondents said incentives is part of their firms’ corporate location strategies. Many companiestakeincentives to play a significant role in thefinaldecision-making process.

Companiesrequireincentives to offsethardorsoftcosts, associated with the relocation, assist with,buildorprovidehardor soft infrastructure, or assist in maintaining the bottom line (Scottsdale City council, 2004). For smoother and easierrunningof the economic activities, provision of incentives will complement and supplement the city council's efforts. Establishment of a local chamber of commerce will be the firstincentivethat will help to attractprivateventures into the city.

The chamber of commerce will serveto promote and perpetuate the business, commercial, manufacturing,agriculture, civic interests, general welfare and prosperity ofthecommunityand its environs.

Also, it will ensurethe stimulation of public interest to theseends toadvancetheindustryof the saidcommunityand develop auniformpublicspiritand a better place. The chamber will consist of businesses that meet certain criteria, but which should notlockout many businesses. The businesses will discuss what is best for them andenactan incentivepolicythat attracts andenhancesprivate ventures (Bromley, 2008).

The chamber willsetincentives like waiving all theoutstandingland rates oflandowners within the city. This will encourage those with existing businesses toexpand. It will alsolowerthelandrates according to how many local people thebusinessororganizationemploys (Bromley, 2008).

The city council will alsoensurea reductionof plan review fees, building permit fees, inspectionfees, sign permits and construction meter loops,encouraging more companies to settle in the area. The city council will alsolowerall rates required to acquirethe landincludingsurveyrates. It will alsoensurethe reduction ofcertaincosts related to infrastructure improvements, as defined by its incentive Agreement (Bromley, 2008).

Creating incentives to encourage the privateventurewill require $ 2 million dollars. This willservean estimated 200,000 of the city’s population. The businesses set up in the city willservemost of the people. Thebetterthe incentives provided are, the better the services delivered to the public. While $ 1 million will go to the formation of the local chamber of commerce, the other $ 1 million will go to the other incentive requirements. Thefinancemanagerwill oversee the creation of incentives.

Enhancement of Social Amenities

The city, apart from the listed activities will use some of the remainingbudgetof $ 0.5 million toenhancethe social amenities in the city. This improves the living conditions of the community.

Improving access tothe basichealth care andhygieneis one way of improving the city’s population livingcondition. The city council willhirethe community health workers to educate the public on hygiene through health campaigns andattendto health emergencies. It will also increase the number of attendants whocollectstreetdust bins to ensure no bins remains emptied and cleaned (Rives, 2009). The council will ensure that every member of the city access safe andcleanwater for consumption.

Disaster Preparedness and Response

The remaining 0.5 $ million dollars will add more fire fighting equipments and machines. This will ensure preparedness forthe firetragedies, which, are more common than any other disasters. Training members of the public on preparedness and response, in case of a fire within the city, is alsocrucialto all community members (Brooks, 1993).

The disaster preparedness and response coordinator, andthe capacitybuilding coordinator will work hand in hand with the finance manager.This willserveapproximately 200 000 people in thetownas most members of thepublicgettrained on disaster preparedness and response by the city council.

The following table shows a breakdown of Activities and their respective costs.

Conclusion

These activities such as; capital investment, operational requirements, subsidizing nongovernmental organizations, creating incentives for privateventurewill ensure the efficient use of the city council’s funds. Apart from the listed activities, the city council will alsoundertakethe disaster preparedness and response, and enhancing social amenities. The activities mayplaymore than one functions like the real estate investment which will not onlybringincometo the council, but also providethe properhousingto the population as anincentiveand socialamenity. These activitiesinvolve all the stakeholders in the management ofthecounciland benefit from it; i.e. the financiers, the financial market and the owners who are thecommunity(Drake, 2007).