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Nature of the Work
* Federal, State, and local governments employ 1 out of 3 budget analysts.
* A bachelor's degree generally is the minimum educational requirement; however, some employers require a master's degree.
* Competition for jobs should remain keen because of the substantial number of qualified applicants; those with a master's degree should enjoy the best job prospects.
Budget analysts play a primary role in the development, analysis, and execution of budgets. Budgets are financial plans used to estimate future requirements and organize and allocate operating and capital resources effectively. The analysis of spending behavior and the planning of future operations are an integral part of the decision-making process in most corporations and government agencies.
Budget analysts work in private industry, nonprofit organizations, and the public sector. In private industry, a budget analyst examines, analyzes, and seeks new ways to improve efficiency and increase profits. Although analysts working in government generally are not concerned with profits, they too are interested in finding the most efficient distribution of funds and other resources among various departments and programs.
A major responsibility of budget analysts is to provide advice and technical assistance in the preparation of annual budgets. At the beginning of the budget cycle, managers and department heads submit proposed operating and financial plans to budget analysts for review. These plans outline expected programs, including proposed program increases and new initiatives; estimated costs and expenses; and capital expenditures needed to finance these programs.
Analysts begin by examining the budget estimates or proposals for completeness, accuracy, and conformance with established procedures, regulations, and organizational objectives. Sometimes they review financial requests by employing cost-benefit analysis, assessing program trade-offs, and exploring alternative funding methods. They also examine past and current budgets, and research economic and financial developments that affect the organization's spending. This process allows analysts to evaluate proposals in terms of the organization's priorities and financial resources.
After this review process, budget analysts consolidate the individual department budgets into operating and capital budget summaries. The analysts submit preliminary budgets to senior management, or sometimes, as is often the case in local and State governments, to appointed or elected officials, with comments and supporting statements that justify or deny funding requests. By reviewing different departments' operating plans, analysts gain insight into an organization's overall operations. This generally proves useful when they interpret and offer technical assistance to officials approving the budget. At this point in the budget process, budget analysts help the chief operating officer, agency head, or other top managers analyze the proposed plan and devise possible alternatives if the projected results are unsatisfactory. The final decision to approve the budget, however, is usually made by the organization head in a private firm or elected officials in government, such as the State legislative body.
Throughout the rest of the year, analysts periodically monitor the budget by reviewing reports and accounting records to determine if allocated funds have been spent as specified. If deviations appear between the approved budget and actual performance, budget analysts may write a report explaining the causes of the variations along with recommendations for new or revised budget procedures. They suggest reallocation of excess funds or recommend program cuts to avoid or alleviate deficits. They also inform program managers and others within their organization of the status and availability of funds in different budget accounts. Before any changes are made to an existing program or a new one is started, a budget analyst assesses its efficiency and effectiveness. Analysts also may project budget needs for long-range planning.
The budget analyst's role has broadened as limited funding has led to downsizing and restructuring throughout private industry and government. In addition to developing guidelines and policies governing the formulation and maintenance of the budget, analysts may measure organizational performance, assessing the effect of various programs and policies on the budget, and help draft budget-related legislation. Budget analysts sometimes conduct training sessions for company or government agency personnel on new budget procedures.
Budget analysts work in a normal office setting, generally 40 hours per week. However, during the initial development and mid-year and final reviews of budgets, they often experience the pressure of deadlines and tight work schedules. The work during these periods can be extremely stressful, and analysts are usually required to work more than the routine 40 hours a week.
Budget analysts spend the majority of their time working independently, compiling and analyzing data and preparing budget proposals. Nevertheless, their routine schedule can be interrupted by special budget requests, meetings, and training sessions. Others may travel to obtain budget details and explanations of various programs from coworkers, and to personally observe what funding is being used for in the field.
Budget analysts held about 66,000 jobs throughout private industry and government in 1996. Federal, State, and local governments are major employers, accounting for one-third of budget analyst jobs. The Department of Defense employed 7 of every 10 budget analysts working for the Federal Government. Other major employers of budget analysts are schools, hospitals, banks; and manufacturers of transportation equipment, chemicals and allied products, electrical and electronic machinery, and industrial machines.
Private firms and government agencies generally require candidates for budget analyst positions to have at least a bachelor's degree. Within the Federal Government, a bachelor's degree in any field is sufficient background for an entry-level budget analyst position. State and local governments have varying requirements, but a bachelor's degree in one of many areasaccounting, finance, business or public administration, economics, political science, planning, statistics, or a social science such as sociologymay qualify one for entry into the occupation. Sometimes, a field closely related to the employing industry or organization within an industry, such as engineering, may be preferred. An increasing number of States and other employers require a candidate to possess a master's degree to ensure adequate analytical and communication skills. Some firms prefer candidates with business backgrounds because business courses emphasize quantitative analytical skills. Budget and financial experience can occasionally be substituted for formal education when applying for a budget analyst position.
Because developing a budget involves manipulating numbers and requires strong analytical skills, courses in statistics or accounting are helpful, regardless of the prospective budget analyst's major field of study. Financial analysis in most organizations is automated, and requires familiarity with word processing and the financial software packages used in budget analysis. Software packages commonly used by budget analysts include electronic spreadsheets and database and graphics software. Employers generally prefer job candidates who already possess these computer skills over those who need to be trained.
In addition to analytical and computer skills, those seeking a career as a budget analyst must also be able to work under strict time constraints. Strong oral and written communication skills are essential for analysts to prepare, present, and defend budget proposals to decision makers.
Entry-level budget analysts may receive some formal training when they begin their jobs. However, most employers feel that the best training is obtained by working through one complete budget cycle. During the cycle, analysts become familiar with all the steps involved in the budgeting process.
The Federal Government, on the other hand, offers extensive on-the-job and classroom training for entry-level analysts, who are initially called trainees. Analysts are encouraged to participate in the various classes offered throughout their careers.
Beginning analysts usually work under close supervision. Capable entry-level analysts can be promoted into intermediate level positions within 1 to 2 years, and then into senior positions within a few more years. Progressing to a higher level means added budgetary responsibility and can lead to a supervisory role.
In the Federal Government, for example, beginning budget analysts compare projected costs with prior expenditures; consolidate and enter data prepared by others; and assist higher grade analysts by doing research. As analysts progress, they begin to develop and formulate budget estimates and justification statements; perform in-depth analyses of budget requests; write statements supporting funding requests; advise program managers and others on the status and availability of funds in different budget activities; and present and defend budget proposals to senior managers.
Because of the importance and high visibility of their jobs, senior budget analysts are prime candidates for promotion to management positions in various parts of the organization.
Despite the increase in demand for budget analysts, competition for jobs should remain keen because of the substantial number of qualified applicants. Job opportunities are generally best for candidates with a master's degree. In some cases, budget and financial experience can offset a lack of formal education. A working knowledge of computer financial software packages can also enhance one's employment prospects in this field.
Employment of budget analysts is expected to grow about as fast as the average for all occupations through the year 2006. In addition to employment growth, many job openings will result from the need to replace experienced budget analysts who transfer to other occupations or leave the labor force.
Planning and financial control demand more attention because of the growing complexity of business and the increasing specialization within organizations. Many companies will continue to rely heavily on budget analysts to examine, analyze, and develop budgets to determine capital requirements and to allocate labor and other resources efficiently among all parts of the organization. Managers will continue to use budgets as a vehicle to plan, coordinate, control, and evaluate activities within their organizations more effectively.
Expanding automation continues to make budget analysts more productive, allowing them to process more data in less time. Also, computers are increasingly used to organize, summarize, and disseminate data to top-level managers, thereby centralizing decision-making and reducing the need for middle managers in many organizations. However, any computer-induced effects on employment of budget analysts may be offset by growing demand for information and analysis. Easier manipulation of and accessibility to data provide management with more considerations on which to base decisions.
The financial work performed by budget analysts is an important function in every organization. Financial and budget reports must be completed during periods of economic growth and slowdowns. Therefore, budget analysts generally are less subject to layoffs during economic downturns than many other workers.
Salaries of budget analysts vary widely by experience, education, and employer. According to a survey conducted by Robert Half International, a staffing services firm specializing in accounting and finance, starting salaries of budget and other financial analysts in small firms ranged from $24,000 to $33,200 in 1997; in large organizations, from $28,000 to $38,700. In small firms, analysts with 1 to 3 years of experience earned from $28,000 to $43,100; in large companies, from $31,000 to $51,300. Senior analysts in small firms earned from $34,500 to $50,000; in large firms, from $39,000 to $60,600. Earnings of managers in this field ranged from $40,000 to $65,000 a year in small firms, while managers in large organizations earned between $47,000 and $83,800.
A survey of workplaces in 160 metropolitan areas reported that inexperienced budget analysts had median annual earnings of about $30,100 in 1995, with the middle half earning between $26,200 and $35,500 a year.
In the Federal Government, budget analysts generally started as trainees earning $19,500 or $24,200 a year in 1997. Candidates with a master's degree might begin at $29,600. Beginning salaries were slightly higher in selected areas where the prevailing local pay level was higher. The average annual salary for budget analysts employed by the Federal Government in nonsupervisory, supervisory, and managerial positions was $48,600 in 1997.
Budget analysts review, analyze, and interpret financial data; make recommendations for the future; and assist in the implementation of new ideas. Workers who use these skills in other occupations include accountants and auditors, economists, financial analysts, financial managers, and loan officers.
Information about career opportunities as a budget analyst may be available from your State or local employment service.
Information on acquiring a job as a budget analyst with the Federal Government may be obtained from the Office of Personnel Management through a telephone-based system. Consult your telephone directory under U.S. Government for a local number, or call (912) 757-3000 (TDD 912 744-2299). That number is not toll-free and charges may result. Information also is available from their Internet site: http://www.usajobs.opm.gov
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