INTRODUCTION Financial management is one of the most challenging responsibilities facing governments,

INTRODUCTION

Financial management is one of the most challenging responsibilities facing governments, aware that they must achieve a level of fiscal health to be sustainable over the long term. Governments can utilize analytical skills and financial indicators to perform assessments of the organization’s fiscal health. With the information gained from this kind of assessment, the organization can determine what symptoms might be contributing to its fiscal distress and what additional testing and analysis needs to be done in order to get a more accurate picture of the organization’s fiscal problems. Problems can then be treated in the most effective way to achieve the level of fiscal health that needed in order to serve its citizens. There are several advantages to providing a long-range assessment of financial condition including:

Improving the quality of information for making policy and budgetary decisions

Identifying emerging trends in order to take corrective or proactive action

Providing a graphical analysis for review and tracking of trends

Utilizing the trends of specific financial indicators to guide budget decisions and priorities

Financial Condition

Financial condition is defined as the ability of a government to balance recurring appropriations with recurring expenses, allowing them to provide necessary services on a continuing basis. A government in good financial condition is able to maintain adequate service levels during economic downturns and is able to develop resources to meet future needs. In contrast, a government in fiscal stress struggles to balance the budget, experiences service disruptions and has limited resources to finance future needs. Maintaining a sound financial condition requires governments to adjust to long-term changes in community needs and develop the ability to plan for the future.

There is no single measure that fully captures the financial condition of a governmental entity therefore it is necessary to take a comprehensive approach that focuses on both external and internal fiscal factors.

APPROPRIATION INDICATORS

Total Budget Authority (Decreasing appropriations as a percent of total budget)

Description: If % of Total Budget decreases or become lower, it may hamper the agency’s ability to maintain the existing level of services unless new sources of revenues or ways of trimming expenses can be found.

Warning Trend: Decrease as % of Total Budget

BAR CHART HERE

U.S. Immigration and Customs Enforcement (CAS-ICE (Decreasing appropriations and a percent of total budget)

Description: If % of Total Budget decreases or become lower, it may hamper the agency’s ability to maintain the existing level of services unless new sources of revenues or ways of trimming expenses can be found.

Warning Trend: Decrease as % of Total Budget

BAR CHART HERE

Transportation Security Administration (CAS-TSA) (Decreasing appropriations and a percent of total budget)

Description: If % of Total Budget decreases or become lower, it may hamper the agency’s ability to maintain the existing level of services unless new sources of revenues or ways of trimming expenses can be found.

Warning Trend: Decrease as % of Total Budget

BAR CHART HERE

U.S. Coast Guard (Decreasing appropriations and a percent of total budget)

Description: If % of Total Budget decreases or become lower, it may hamper the agency’s ability to maintain the existing level of services unless new sources of revenues or ways of trimming expenses can be found.

Warning Trend: Decrease as % of Total Budget

BAR CHART HERE

EXPENSE INDICATORS

Four Largest Departmental Expenses for Transportation Security Administration (CAS-TSA)

Description: If % of TSA Budget in each expense decreases or become lower, it may hamper the agency’s ability to maintain the existing level of services unless new sources of revenues or ways of trimming expenses can be found.

Compare the each of the Line Item Expenses over time (2015, 2016, and 2017) in constant dollar (2020)

Warning Trend: Decrease as % of TSA Budget

PIE CHART HERE

Concluding Comments

The report should address the following questions: What does this budgetary analysis tell you about the relationship between appropriations and expenses? Can you detect any warning signs indicating any difficulty that a budgetary a unit may face in the near future? If so, why or why not?