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Chapter 14
BUDGETING AND MANAGING COSTS CREATIVELY
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Chapter 14 Learning Objectives
After completing this chapter, students will know
• What purposes a budget serves
• Who is responsible for preparing the budget
• How most budgets are developed
• Whose input is vital to any budget
• What categories are typically included in a budget
Chapter 14 Outline
Introduction
Budget Defined
Purposes of Budgets
Responsibility for Preparing the Budget
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Cutback Budgeting
Causes of Cutback Budgeting
Ways to Do More with Less
Managing Costs Creatively
Identifying Common Cost Problems
Employee Cost Improvement Suggestion Programs
Creative Ways to Reduce Costs
Increasing Revenue
Fundraising
Donations
Charging for Services
Chapter 14 Summary
Budgets serve as a plan for and a means to control resources. Managers at each level
should be responsible for the budget they need, based on input from their subordinates.
This results in all-levels budgeting. Most law enforcement budgets are developed by
revising the previous year’s budget based on logical assumptions. All law enforcement
employees should contribute ideas related to budget items as specific needs arise.
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All employees are responsible for reducing costs. Employees can suggest ways to cut
costs through an employee cost improvement suggestion program. Reduce costs by
sharing resources, using a regional approach or consolidating services, establishing
community resource centers, contracting, using a Quartermaster system, using volunteers
and privatizing.
is the lead federal funding agency for law enforcement.
Chapter 14 Key Terms
activity-based costing (ABC) a modern version of the program budgeting system,
except that rather than breaking costs down by program, the approach breaks down
costs by activity.
all-levels budgeting everyone affected by the budget helps prepare it.
capital budget deals with “big ticket” items such as major equipment purchases and
vehicles.
contingency funds money allocated for unforeseen emergencies.
cutback budgeting providing the same or more services with less funding; also
called budget reduction or reduced expenditure spending.
Chapter 14: Budgeting and Managing Costs Creatively
formula grant awarded to states or localities based on population and crime rates;
also called a block grant.
line items specific expense categories, for example, personnel, maintenance,
training.
performance budgeting allocates dollars based on productivity.
program budgeting identifies programs and allocates funds for each.
variable costs costs that will change depending on the level of service provided, for
example, personnel.
Classroom Discussion Questions
1. Have students divide into groups. Assign each group with a different budget
format. Have each group describe the advantages and disadvantages of their
format.
2. Have the class discuss the ways they believe police budgets are supplement. Have
students compare they ways other local and state agencies supplement their
budgets.
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8. What things in addition to money might a law enforcement agency budget
(e.g., space)?
9. Is your law enforcement department functioning under cutback budgeting?
Student Activities
1. What is the budget cycle for your school? Who decides the final budget? How
does this compare with that of the local police department?
2. You have been tasked with cutting the police budget by 20 percent. What items
would you eliminate? What items would you fight for? Why?
Challenge Fourteen
Captain Jones is responsible for preparing the budget for the Greenfield Police
Department. The new chief has asked her to review the entire budget and find long-term
The Greenfield Police Department is a medium-sized suburban department. Three
neighboring cities have comparable departments performing similar functions. Each of
the four departments has their own booking and short-term holding facility and their own
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The county sheriff’s department also has a SWAT team that responds when requested by
local police departments. None of the departments has an undercover drug unit. They
Challenge Fourteen Questions and Suggested Answers
1. How should Captain Jones begin the process of preparing a new budget?
Captain Jones should solicit input from all levels of the department. Budget changes
2. Assuming that the Greenfield officers are still relying on preventive patrol, how could
a change in strategy benefit the budget?
A reduction in the questionable practice of preventive patrol frees officers to engage
3. Suggest some major long-term cost savings Captain Jones could consider regarding
dispatch and booking services.
Greenfield and its neighboring cities may realize significant cost reductions by
combining and sharing dispatch and booking services. Combining services is a
4. Is the continued support of a seldom-used SWAT team a good use of Greenfield
Police Department resources?
Captain Jones should consider the benefits and costs of the SWAT team. Police
departments should periodically review programs and activities to determine their
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5. What other sources of creative funding may be available to support a drug unit?
Captain Jones could suggest sharing expenses with Greenfield’s neighboring cities by
creating a multi-jurisdictional drug task force. There are significant political
6. How could Captain Jones use volunteers and reserve officers to increase manpower?
Many functions traditionally performed by police officers do not actually require a