We all have been offered a challenge by Chair Metsger and Mr. McWatters to participate in "... setting and raising the bar for public transparency for a federal agency." That either sounds like a tremendous joke/oxymoron or a rare, unusual opportunity that should not be missed.
Would like to make three simple observations about the "NCUA Staff Justification Report" (the"SJR") for you to consider...
1) The following is the opening paragraph in Appendix B [remember you were to read that first - right?] the SJR:
"The National Credit Union Administration continues to strengthen the integration of planning and budget to ensure agency resources are aligned to strategic priorities, identify areas of continuous improvement, and identify opportunities to save budget resources."
|No more "Alice"... please!|
2) Please note this from the second paragraph:
"... NCUA develops its budget using zero-based budgeting techniques, which ensure that each activity is individually justified to the Board in order to be considered for funding."
Here is a generally accepted accounting description of "zero-based budgeting":
"A zero-based budget requires managers to justify all of their budgeted expenditures, rather than the more common approach of only requiring justification of incremental changes to the budget or actual results of the previous year."
"The basic process of zero-based budgeting is:
1) Identify business objectives.
2) Create and evaluate alternative methods for accomplishing each objective.
3) Evaluate alternative funding levels, depending on planned performance.
4) Set priorities.
... the process forces managers to focus on the original mission and document alternative ways of running the business."
The NCUA staff frequently mentions their use of
zero-based budgeting in the SJR to add credibility to the thoroughness of their efforts. There is absolutely no clear evidence that zero-based budgeting - as generally understood by the accounting profession - was actually used in the NCUA budgeting process. Perhaps NCUA staff could provide the documentation to support steps 1-4 defined above?
3) Lastly, consider this phrase [still in Appendix B pg. 46]:
"Given the nature of NCUA's mission and strategic planning goals and objectives, ..."
You are of course familiar with the "1) mission, 2) goals, and 3) objectives" of NCUA, aren't you? Certainly, in any organizational budgeting process - zero or otherwise - one must start with a clear mission, well-defined goals, and succinct, measurable objectives. So, now take a look at Appendix A [pg. 36, use link above].
Would welcome your thoughts... is the NCUA Staff Budget Justification Report substantive, balanced, convincing?
"Setting and raising the bar" requires:
ACCOUNTABILITY - COMPETENCE - TRANSPARENCY
Are we there on "ACT" with the NCUA budget?