Question

This week we will be studying budgeting in governmental entities. Locate a recent article from your local city, town, or state that focuses on budgeting. Summarize the article in your own words and relate the discussion to any of the topics that we cover during this week. Identify any funds mentioned or implied in the article, as well as how the article relates to the budgeting process used by government entities. How does the article relate to what you have learned about internal and external users of the government's budget?

Answer 1

Unlike most private sector organizations, governmental entities must be responsive to a number of different groups and organizations, including elected officials, other units of governments, investors, creditors, and citizens that are focused on monitoring their activities.

Internal users are people within a business organization who use financialinformation. Examples of internal users are owners, managers, and employees. ... Examples of external users are suppliers, banks, customers, investors, potential investors, and tax authorities.

External Users

Typically called financial accounting, the record of a business’ financial history for use by external entities is used for many purposes. The external users of accounting information fall into six groups; each has different interests in the company and wants answers to unique questions. The groups and some of their possible questions are:

Owners and prospective owners.Has the company earned satisfactory income on its total investment? Should an investment be made in this company? Should the present investment be increased, decreased, or retained at the same level? Can the company install costly pollution control equipment and still be profitable?Creditors and lenders. Should a loan be granted to the company? Will the company be able to pay its debts as they become due?Employees and their unions.Does the company have the ability to pay increased wages? Is the company financially able to provide long-term employment for its workforce?Customers. Does the company offer useful products at fair prices? Will the company survive long enough to honor its product warranties?Governmental units. Is the company, such as a local public utility, charging a fair rate for its services?General public. Is the company providing useful products and gainful employment for citizens without causing serious environmental problems?