Management Practices- Smoothing Out Rough Spots in Government Outlays

Government Outlays

Article Link

https://www.researchgate.net/publication/318159752_Capital_Budgeting_and_Management_Practices_Smoothing_Out_Rough_Spots_in_Government_Outlays_Capital_Budgeting_and_Management_Practices

Summary

The article reviews the role of capital budgeting in capital management and planning. One of the article’s major points is that long-term financial management includes using strategic financing techniques and maintaining a favorable credit rating to reduce the costs incurred in public infrastructure and enhance the affordability of public debt. Another major point is that control variables such as total outstanding debt, intergovernmental revenue, business cycle, effective tax rate, the size of a state’s special revenue, and expenditure shock are vital in capital budgeting because political decisions and policies dictate state capital spending. Capital budgeting is also affected by capital spending (Srithongrung, 2017). The authors define capital volatility as the presence of barriers in the government’s definite capital outlays. According to Srithongrung (2017), capital spending volatility can be reduced by using a separate capital budget to review capital projects, using good financial management practices characterized by high-quality bonding, and dedicating revenue for financing total outlay. Another major point is that a government applying the revenue-availability spending technique may have poor financial conditions due to making abrupt spending decisions.

Reaction

The article provides detailed information on the capital budgeting process, the factors that influence the process, and how the government enhances the efficiency of the capital planning and management process for accurate capital budgeting. I can apply the knowledge from the article to improve budgeting in our organization by implementing the author’s recommendations on how to reduce capital spending volatility. I can also use the knowledge to determine the most important things to consider in capital planning and management. The knowledge is also applicable in determining the impacts of poor capital budgeting and the most effective capital planning and management practices that can be applied to counterbalance uncertainties arising from political decisions and economic stresses.

References

Srithongrung, A. (2017). Capital budgeting and management practices: Smoothing out rough spots in government outlays. Public Budgeting & Finance, 38(1), 47-71. https://doi.org/10.1111/pbaf.12167

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Assessment Description
Using the GCU Library, locate a journal article about capital budgeting. In the subject line of your post, include the name of the article that you read. Then, in your initial post, provide a link to the article and a summary followed by your reaction to the article.

Capital Budgeting and Management Practices- Smoothing Out Rough Spots in Government Outlays

The summary should be approximately 250 words, and the reaction should be approximately 150 words. The summary should describe the major points of the article, and the reaction should demonstrate your interpretation of the article and how you can apply that knowledge. Do not choose an article that one of your classmates has already posted. To participate in a follow-up discussion, choose one of the articles that a classmate has posted and provide your own reaction to it. Note: It will be challenging to find a relevant article if you do not use the library.

Please include proper citations in your discussion post. Points will be deducted if proper citations are not used.