CONSTRUCTION BUDGETING IN STATE HIGHWAY DEPARTMENTS: CONCEPTS AND PRACTICE

A SURVEY WAS CONDUCTED OF CONSTRUCTION BUDGETING IN STATE HIGHWAY DEPARTMENTS. ALL STATE HIGHWAY DEPARTMENTS WERE REQUESTED TO ANSWER SOME BASIC QUESTIONS DEALING WITH CONSTRUCTION BUDGETING AND TO FURNISH CERTAIN REPORTS AND DOCUMENTATION. MORE THAN TWO-THIRDS OF THE STATES SENT REPLIES AND INCLUDED SOME REPORTS WITH THEIR ANSWERS. THE QUESTIONS RELATED TO THE SELECTION OF CONSTRUCTION PRIORITIES, FINANCIAL PLANNING PROCEDURES, AND SPECIAL DEVICES OR ARRANGEMENTS FOR BUDGET EXECUTION. TWELVE STATES APPEARED TO INCLUDE THE BETTER-MANAGED DEPARTMENTS AND BETTER PLANNING AND BUDGETING PRACTICES. PLANNING AND BUDGETING PRACTICES OF THESE STATES WERE STUDIED IN DETAIL. AN ATTEMPT IS MADE IN THIS REPORT TO OUTLINE IDEAL CONDITIONS AND PRACTICE WITH RESPECT TO CONSTRUCTION BUDGETING. IN MODERN BUDGETING THE EMPHASIS IS ON THE USE OF BUDGETING FOR DECISION-MAKING PURPOSES. THE PERFORMANCE OR PROGRAM BUDGET IS THUS AN INEXTRICABLE PART OF THE MANAGEMENT APPROACH TO BUDGETING. AS A PROGRAM AND PERFORMANCE PHILOSOPHY THE TRADITIONAL RELATIONSHIP OF ACCOUNTING TO BUDGETING IS ALTERED. EFFECTIVE BUDGETING MUST BE INTERWOVEN WITH AND IS THE PRODUCT OF THE WHOLE MANAGEMENT OR DECISION-MAKING PROCESS. THE HIGHWAY CONSTRUCTION BUDGETING WILL PERMIT EMPLOYMENT OF ALL PERSONNEL ENGAGED IN HIGHWAY BUILDING, WITHOUT EITHER UNMANAGEABLE PEAK WORKLOADS OR UNDULY LIGHT LOADS. THE PLANNING AND PROGRAMMING DIVISIONS OF THE STATE HIGHWAY DEPARTMENT ARE USUALLY RESPONSIBLE FOR PREPARATION OF ESTIMATES OVER LONG-RANGE BUDGET FORMULATION. ADEQUATE BUDGETING DEPENDS TO SOME EXTENT ON THE EFFECTIVE USE OF GENERAL BACKGROUND INFORMATION DEVELOPED IN PLANNING SURVEY AND OTHER BASIC STUDIES. SEVERAL PROCEDURES ARE USED FOR ECONOMY STUDIES: THE BENEFIT-COST RATIO, AND THE RATE OF RETURN ON INVESTMENT. THESE METHODS OF ANALYSES ARE REVIEWED. EFFECTIVE BUDGET ADMINISTRATION INVOLVES TWO BROAD BUT INSEPARABLE ELEMENTS: PHYSICAL PROCEDURES AND PERFORMANCE PROCEDURES. COST AND WORK PROCEDURE CONTROLS MUST BE SET UP TO: (1) EXPEDITE THE PROCESSING OF ADMINISTRATIVE ROUTINE IN THE POLICY MAKERS' OFFICES, (2) GUIDE THE DIVISION HEADS AND SUPERVISORS CONCERNING THE ESSENTIAL FACTS BEFORE DECISIONS ARE MADE, AND (3) PROVIDE FOR SYSTEMATIC REVISION AND APPROVAL BEFORE COSTLY ACTIONS ARE INITIATED.

  • Supplemental Notes:
    • 36 Pp, 2 FiG, 2 TAB, 111 REF, 2 APP
  • Corporate Authors:

    University of Kentucky, Lexington

    College of Business and Economics
    Lexington, KY  United States  40506
  • Authors:
    • Holshouser, E C
  • Publication Date: 1962

Subject/Index Terms

Filing Info

  • Accession Number: 00200952
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Apr 16 1970 12:00AM