The following are just a few budget analyst job and career highlights:
In the majority of large and complex organizations the daunting task of deciding how to cost-effectively distribute limited financial resources would be next to impossible without the assistance of qualified budget analysts. Playing a primary role in the development, analysis, and execution of budgets, budget analysts allocate current resources as well as estimate future financial requirements. Without efficient and effective budget analysis along with vital feedback about budgetary problems, many organizations both public and private could potentially face bankruptcy.
Budget analysts can be found working for a wide variety businesses, institutions, and associations. Some may work in private industry settings others in nonprofit organizations or public divisions. Analysts working for private firms analyze efficiency and seek new ways to improve profits. Analysts working for nonprofit and governmental organizations, though not usually concerned with profits, undertake similar tasks trying to find the most efficient distribution of funds and other resources among a variety of departments and programs.
Many responsibilities fall upon budget analysts working in various organizations. However, their principal role is to provide advice and technical assistance in the preparation of annual budgets. Managers and department heads submit proposed operational and financial plans to be evaluated at the beginning of each budget cycle. These plans, outlining prospective programs such as funding increases and new initiatives along with capital expenditures needed to fund various programs and estimated costs and expenses, are then reviewed by a budget analyst.
As part of their review, analysts examine the budget estimates or proposals for accuracy, precision, and completeness. They also confirm conformance with conventional procedures, policies, and organizational objectives. Additionally, budget analysts may employ cost-benefit analysis to assess program tradeoffs, review financial requests, and explore alternative funding methods. Examining both past and current budgets, and researching financial and economic developments that have affect on the organization’s spending habits may also be done by a budget analyst. Through this process of examination, research, and exploration, budget analysts are able to evaluate proposals in terms of the organization’s priorities and financial resources.
Once the initial review process has been completed, budget analysts work to consolidate the individual departmental budgets into operating and capital financial summaries. Within these summaries are statements and comments that either support or argue against various funding requests. After the consolidation and organization of these financial or budget summaries is completed, they are submitted to a group of senior management, appointed, or elected officials. The chief operating officer, agency head, or other top managers, once again aided by the help of budget analysts, then scrutinize the proposed plan and formulate potential alternatives to inadequacies within the plan. However, the final decision to approve the budget is usually made by the organization head or by elected officials, such as the State legislative body.
Analysts are then expected to regularly monitor the budget throughout the rest of the year. In doing this they review reports and accounting records determining whether or not all allocated funds have been spent as originally allotted. If discrepancies between the approved budget and the actual pay out arise, budget analysts may be required to write up a report detailing reasons for the variations and recommendations for new or revised budget procedures. Analysts may recommend that various programs be cut or that extra funds be reallocated to other areas in order to avoid or lessen deficits. Before any adjustments are made to an existing budget program the analysts assess the program’s efficiency and effectiveness and inform program managers and others within their organization of the status and availability of funds in different budget accounts. A decision, as to how best to proceed, is then decided upon. In addition analysts may also be involved in long-term planning endeavors such as projecting future budget needs.
Due to the modern use of computerized financial software programs, the amount of data and information available to budget analysts has greatly increased. They are now able to make far-reaching use of database, word processing, and spreadsheet software enabling then to analyze more data than ever.
As limited funding has led to the downsizing and restructuring of many private and governmental agencies, budget analysts have seen their role in the work force expand. In many cases they are now not only responsible for the development of guidelines and policies governing the formulation and maintenance of the budget, but also the drafting of budget-related legislation, measurement of organizational performance, and assessment of the effects of various programs and policies on the budget. In addition, budget analysts occasionally conduct training sessions for company or government agency personnel regarding new budget procedures.
Generally most private firms and governmental agencies require that candidates applying for analyst position have at least a bachelor’s degree; however, many prefer and some now require a master’s degree. A bachelor’s degree in any field is most often sufficient for an entry-level budget analyst position within the Federal Government. But, again, candidates possessing master’s degrees tend to be more favored. Applicant qualifications within State and local governments vary, but a bachelor’s degree in areas such as finance, accounting, public administration, business, political science, economics, social science, sociology, or statistics may increase an applicant’s eligibility for entry into the occupation. Yet, for many states, especially those that are larger and more urban, a bachelor’s degree is not enough, and a master’s degree is required. Also, in some situations a degree in a field closely related to that of the employing institution or organization, such as engineering may be ideal. Some private firms are prone to choose candidates with a degree in business because business courses emphasize quantitative and analytical skills, while many government employers prefer to hire candidates with a deep-seated policy analysis and analytical background obtained through majors such as economics, political science, public finance, or public administration. In some circumstances employers will allow budget- or finance-related work experience to be substituted for formal education.
Regardless of the potential budget analyst’s major field of study, courses in statistics or accounting are helpful because the strong analytical skills and knowledge of number manipulation learned through such programs will prove vital in developing a successful budget. Familiarity with word processing and financial software packages used in budget analysis is also favorable to a potential candidate. In almost every modern organization financial analysis is automated, and therefore some knowledge of computers is required. Software packages which are commonly used by budget analysts include electronic database, spreadsheet, and graphic software. Employers usually prefer to hire job applicants who already possess these computer skills.
In addition to analytical and computer skills, those looking for a career as a budget analyst must be able to work under rigorous time constraints. Also, it is essential for analysts to have strong oral and written communication because they must be able to prepare, present, and defend budget proposals to decision makers.
Some on-the-job training may be given to entry-level analysts when they first begin their jobs, but most employers feel that the best training available to new budget analysts is obtained while working through one complete budget cycle. During the cycle, which usually runs 1 year, analysts become well acquainted with the different steps involved in the budgeting process. On the other hand, newly budget analysts working for the Federal Government are provided with extensive classroom as well as on-the-job training. All budget analysts, no matter how extensive their training, are encouraged to participate in the various classes offered throughout their careers.
Some government budget analysts employed at the Federal, State, or local level may be given the opportunity to earn the Certified Government Financial Manager (CGFM) designation which is granted by the Association of Government Accountants. Other government financial officers may earn this designation as well. In order to qualify candidates must have a minimum of 2 years experience working in a governmental agency, at least 24 hours of financial management study, and a minimum of a bachelor’s degree. Candidates must also take and pass a series of three exams which cover topics on the organization and structure of government including; governmental accounting, financial reporting and budgeting; and financial management and control.
Although their roles will quickly expand over time, budget analysts begin their careers with a limited amount of responsibility, and are usually required to work under close supervision. For example, in the Federal Government beginning budget analysts are initially responsible to consolidate and enter data prepared by others, compare projected costs with prior expenditures, and to assist higher grade analysts by doing research in various areas. Over time progressing analysts are given greater responsibilities and may work to develop and formulate budget estimates and justification statements, write statements supporting funding requests, perform in-depth analyses of budget requests, present and defend budget proposals to senior managers, and advise program managers and others on the status and availability of funds for an assortment of budget activities.
In fact, capable entry-level analysts can be promoted into intermediate-level positions within 1 to 2 years, and then progress on to senior positions within a few more years. Succeeding to a higher level means added budgetary responsibility and in some cases can lead to supervisory positions. Because of the importance, prominence, visibility and high status of their jobs, senior budget analysts are premier contenders for promotion to management positions in various parts of the organization.
Throughout the years 2002-2012 it is expected that competition for budget analyst jobs will be intense. Candidates possessing a master’s degree are likely to have the best opportunities for employment. Familiarity and fluency with computer financial software packages should also enhance a jobseeker’s employment prospects.
Through the year 2012 the employment of budget analysts is expected to grow roughly as fast as the average for all occupations. Continuing demand for sound financial analysis in both private and public sectors will drive the employment growth for employees in this area. Along with an over all growth of employment, many jobs openings will arise from the need to replace experienced budget analysts who either transfer to other occupations or retire from the workforce.
The expanding use of computer applications in budget analysis has both positive and negative aspects to it. On one hand the use of computers allows for an increase in productivity enabling analysts to process more data in less time. On the other hand due to the increase in available data, analysts may find that their jobs are becoming more and more multifaceted and complex. In addition, as businesses and other organizations become more dense and specialized, a grater demand for attention will be placed on budget planning and financial control. It is expected that these factors will counterbalance any adverse effects of computer applications as it relates to employment growth for budget analysts.
It is expected that in the future all types of organizations will continue to rely heavily on budget analysts. Analysts are needed to examine, analyze and develop budgets. Presently the employment of these personnel in the nations workplaces has remained relatively unaffected by downsizing because of the importance of financial analysis performed by budget analysts. Also, because financial and budget reports must be completed during both periods of economic growth and slowdowns, budget analysts are usually less subject to layoffs than are many other workers during periods of economic downturn.
The salaries of budget analysts vary extensively and are based on education, experience as well as individual employers. In 2002 median earnings of budget analysts rested at about $52,480 per year. The middle 50 percent earned an income between $42,000 and $66,180, while the lowest 10 percent earned less than $34,580. The highest 10 percent earned annual salaries of more than $82,720.
In 2003 budget analysts working for the Federal Government usually started as trainees earning between $23,442 and $29,037 a year, and candidates possessing a master’s degree might be allotted larger starting wages beginning at $35,519. In selected areas where the prevailing local pay level was higher beginning salaries for governmental employees was slightly higher. In 2003 the average annual salary for budget analysts employed by the Federal Government in non-supervisory, supervisory, and managerial positions was $62,400.
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