Rational Budgeting?

No EMS calls for me since Wednesday despite being on call for 30+ hours since then. Healthy folks I guess.

Earlier I wrote of taking over some additional administrative duties this coming year at the institution for which I work. Officially those duties begin July 1, but the transition has already begun. Something new for me will be being in charge of a budget with people coming to me with requests. What prompted this entry was something I learned about how our budget system works. To understand what caught my attention it is worth knowing the system to which I grew accustomed.

My post-doctoral fellowship was at the National Institutes of Health. At NIH, at least when I was there, the budget cycle could best be described as comical were it not for the fact that the dollars involved came out of taxpayer pockets. Everyone at NIH wanted more money in his or her budget. I never heard anyone, and I mean anyone, say (in an official context) “Oh no, we are fine with what we had last year, please give any extra to someone who needs it”. Given everyone played this game, there was an interesting phenomenon that happened around the end of a budget cycle. At some point before the end of a cycle a lab chief or section chief would come around and ask you to type up a list of needed equipment along with cost and a justification. Then, some days or weeks later, you would be asked to type up a list of WANTED (big difference between a need and a want!) equipment. Usually, but not always, there would be a third request that was on the order of “find something else to buy”. The first time I saw this happening I started asking questions. The short version of the answer as to what was going on is that if you had any money left in your budget at the end of a cycle you lost that money AND next years budget was reduced. It was insane. Even if you could get by on less you did not because of a fear that next year you would actually need your full budget and you couldn’t afford to have it cut. I saw people buy stuff that sat in the original box until it was sent to surplus. Insane I tell you.

So, to the present. As I am getting information on how to manage my new budget I asked how we handled things at the end of a budget cycle. I got a strange look and was asked what I meant. I gave the person I was talking to a quick run-down of the above and he just shook his head. Here, it turns out, if you have money at the end of a budget cycle you turn it back into the institution. This is a GOOD thing in their minds. You are not punished by having your budget cut. According to him, if you run a little short you ask for more, and if you are running in the black you give some back. Seems like people buy what they NEED vs what they want (or dream about), and try to help the system vs abuse it. While there may be a more rational way, this system is WAY better than the one I saw in place at NIH. Enough to give a fiscal conservative an apoplectic fit.