Chapter: 4 Exercises
Question A. The Department of Revenue wants to add more people to the unit that attempts to
collect unpaid taxes through telephone contact. What questions would you, as a budget analyst,
have after you receive the following request justification memorandum?
Date: June 19, 2011
Subject: Collection Telephone Pursuit
Currently there are 19 employees working on telephone pursuits on a full time basis. Each
employee can make an average of 25 to 40 phone calls per day. The amount collected by the 19
employees for the past year is 1$17,858,623. If we could add an automated phone system and
increase our staff by 10 full-time employees, we could double the number of phone calls made
and increase our collections by 59 percent, or $8,900,000.
Question B. The table below shows the staffing and pay rates of the Marshall City Fire
Employee Grade Number in Grade Salary
Chief 1 $105,000
Shift Commander 3 70,000
Firefighter 1 12 39,000
Firefighter 2 26 30,000
Clerical (part time) 3 15,000
The city is part of the federal Social Security system. The city and the employee each pay Social
Security payroll taxes of 6.2 percent of all salary paid up to $90,000 per employee to finance
federal retirement and disability insurance and 1.45 percent of all salary paid to finance
Medicare. The city pays a portion of the cost of health insurance for each full-time employee, an
amount equal to $180 per month. Employees are part of a pension system financed by a city
payment of 20 percent of the employee’s salary and employee payment of 5 percent of the
employee’s salary on pay received after that date. Full-time employees receive an allowance for
uniforms of $750 per year.
Estimate the city’s full cost of fire department labor during this fiscal year, assuming no change
in staffing. Separate the cost into salary and fringe benefit components.
Chapter: 5 Exercises
Question A. The U.S. Coast Guard has five central missions: search and rescue, preservation of
national marine resources, enforcement of federal laws at sea, ship safety in American waters,
and national defense. The first of these is recognized as its main job, but dealing with pollution
and preserving marine resources takes the largest share of its budget.
An article in The Economist commenting on a 1999 budget request presentation by Admiral
Robert Kramek (the request was for $2.77 billion), proclaimed:
He dwelt on something rare in the armed services: results. In the past four years, he proudly informed the legislators,
the Coast Guard has saved 20,000 lives and 9.3 billion in property, seized 370,000 pounds of illicit drugs, interdicted
(or assisted) 75,000 foreigners trying to enter America, reported 64,000 cases of marine pollution and checked
59,000 fishing boats for possible catch violations. “We’re a model of better government at least cost,” said the
Admiral. (“The Coast Guard: Keeping all Channels Open,” The Economist, 12 [September 1998], 28-29.)
Discuss and answer the following questions:
A. Did Admiral Kramek provide outcomes, as envisioned by mission – or results – oriented
performance budgeting? Explain your answer.
B. From what you understand to be the Coast Guard mission, what sort of performance
measures would you propose for use by the agency?
C. How would we test whether Admiral Kramek is right when he asserts that the Coast Guard is
delivering “better government at least coast?”
D. What budgetary strategy is the admiral using and what questions would you prepare for
Admiral Kramek if you were on the staff of the appropriation subcommittee considering his