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An Analysis of Municipal Budget Variances

An Analysis of Municipal Budget Variances The objective of this research was to determine the extent to which municipal budget variances are systematically biased, the direction of any biases, and the relationship between the biases and various political, economic, demographic and organisational factors. We compared budgeted and actual revenues and expenditures for 125 of the largest US cities and developed regression models to explain the magnitude of differences. Our results indicate that budget variances are decidedly conservative and are most significantly influenced by the extent of political competition and the percentage of funding from inter‐governmental grants. Inasmuch as unreliable budget estimates can thwart the political process, our findings suggest that there may be a need for both citizens and legislative bodies to review more thoroughly the budgets presented to them by city officials. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting, Auditing & Accountability Journal Emerald Publishing

An Analysis of Municipal Budget Variances

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Publisher
Emerald Publishing
Copyright
Copyright © 1991 MCB UP Ltd. All rights reserved.
ISSN
0951-3574
DOI
10.1108/09513579110003358
Publisher site
See Article on Publisher Site

Abstract

The objective of this research was to determine the extent to which municipal budget variances are systematically biased, the direction of any biases, and the relationship between the biases and various political, economic, demographic and organisational factors. We compared budgeted and actual revenues and expenditures for 125 of the largest US cities and developed regression models to explain the magnitude of differences. Our results indicate that budget variances are decidedly conservative and are most significantly influenced by the extent of political competition and the percentage of funding from inter‐governmental grants. Inasmuch as unreliable budget estimates can thwart the political process, our findings suggest that there may be a need for both citizens and legislative bodies to review more thoroughly the budgets presented to them by city officials.

Journal

Accounting, Auditing & Accountability Journal – Emerald Publishing

Published: Mar 1, 1991

Keywords: Research; Accounting; Local government; USA

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