Name: Estrada, Alexa C.

Section: BSOA 1-C

Differentiate budgeting in a public from a private company

Budgeting in Private Company

The budgeting process in the private sector is systematic and strict.
Usually, private organizations engage in budgeting processes once in a year. In
this context, various leaders within different departments in the organization
are charged with the task of developing the budgetary estimates for their
respective departments.
These leaders are then supposed to submit their budgetary proposals to
the top level management for consideration and approval.
Once the executive arm of the organization receives the proposals,
thorough analysis is done to the proposals from every department. Since the
organization is guided by a series of principles and culture, the budgetary
proposals are approved based on such terms. As a result, there are high
chances of fairness to all the departments as concerns their budgetary
proposals.
The executive branch of the organization ensures that only pertinent
elements within all the budgetary proposals from the departments are
approved based on the policies within organization. This means that chances of
equality and fairness are high in private sectors.

Budgeting in Public Company

On the other hand, budgeting processes in the public sectors are often
unstable and full of partiality. Since governments are composed of three arms
(legislature, executive and judiciary), the budgetary processes often encounter
a lot of challenges. In as much as the executive branch tasks the financial
department to develop a budget for a nation, several procedures are often
observed leading to low levels of implementation of the proposed budgets
(Denhardt, 2003: 56-58).
As a matter of fact, the proposal produced by the financial department
has to be exposed for review, scrutiny and criticism by the legislative. It is in
such contexts that various legislators with selfish interests underscore various
proposals that are unsuitable for them. As a result, pertinent and helpful
budgetary proposals are disregarded by most legislators.
This is due to the fact that the legislators can institute or amend laws to
cancel various budgetary proposals. It is worth noting that all the arms of the
government are often misguided by political interest. As a result, the
budgetary processes in the public sector are majorly unstable and full of
partiality.

References
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