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Quick Tips for Budgeting in Small Police Agencies

Budgeting in Small Police Agencies, written by Chief W. Dwayne Orrick of Georgia Police Department, is a great guide to assist in forecasting budgets. Whether you are new to a position which requires you to forecast next year’s expenditures, or you have been predicting annual budgets and you are looking to become more accurate, this article can assist in preparing your agency’s next budget.

Orrick discusses the 3 major budget areas that agencies need to address while forecasting and implementing annual budgets. The Personnel Budget, which accounts for 75-80% of total expenditures, is the easiest to predict. The Capital Budget is a long-term plan to purchase or repair expensive assets, such as software or vehicles. The Operating Budget funds the day-to-day equipment (uniforms, ammunition), supplies (fuel, paper) and services (vehicle repairs, telephones) of an agency.

Here are some quick tips, as outlined by Orrick, to assist in forecasting and implementing all major budget areas:

The Personnel Budget

  • Ensure allocation of manpower is accurate. Not enough officers will limit the agency’s ability to meet its objectives while too many officers will cause a significant increase in expenditures
  • Closely monitor overtime, as it costs approximately 50% more than regular staffing
  • Monitor sick leave – Sick leave costs approximately 250% more than what you have budgeted for, as you are paying the officer who is sick, and paying overtime to the officer covering the shift
  • Apply for personnel grants

The Capital Budget (long-term)

  • Make long term plans for the purchase of expensive items (i.e. land, vehicles, software)
  • Are these large expenditures absolutely necessary?
  • All items in the Capital Budget must have the following characteristics:
    • Must be tangible
    • Have a life expectancy, or useful life, of over one year
    • Exceed a minimum cost threshold established by a government authority
  • You must be able to articulate the need for the equipment/assets
  • How will the purchase save or make money for the community?
    • The issue of safety is often a good reason to support a capital expenditure
      • i.e. the use of a case management program, such as X-FIRE, will allow the officers to record information more efficiently, allowing them to return to the streets faster
  • Prioritize your funding needs
  • Search for grants for equipment and software purchases

The Operating Budget (short-term)

  • Last year’s costs help identify the next year’s operating budget projections
  • Determine if the agency is going to initiate any new programs or make major structural changes
  • Determine if there are more cost effective procedures
  • Document what the funds will be used for, how the estimates were developed, and why the department needs funding
  • Documentation will provide justification for funding in budget hearings

Budget Cutting Techniques

  • Cut requests for personnel increases
  • Cut equipment viewed as luxuries
  • Use precedent – cut items that have been cut in the past
  • Recommend repair and renovation, not replacement
  • Recommend a study to defer costs
  • Cut all costs by a fixed amount (i.e. 3%)
  • Cut departments with a bad reputation
  • Do not cut if the safety of staff or the community is jeopardized
  • Identify areas that require management or legislative attention

Budget Execution

  • Ensure that the budget areas are monitored on a regular basis, and if it is found that a line item is over budget, make the appropriate corrective action to put this back on track for the following months
  • Request a statement of expenditures and appropriations from the finance department
  • When you are finding areas to be over budget, determine the reason for the increase
  • A variance in cost is always caused by one of the following three factors:
    • Price – department is paying more or less for supplies than what was predicted
    • Volume – organization has experience an increase / decrease in usage
    • Efficiency of operation – the organization is operating more / less efficiently than predicted

Agnovi’s REX is an ideal investigation software solution for small investigative teams on a tight budget. Contact Agnovi for more information.