Industry Expertise · July 23, 2020

Budgeting for Government Agencies Means Managing Restrictions Smartly

In government agencies, budgets often limit what projects leadership can pursue. When funds are limited, reduced or otherwise restricted, leaders must be judicious in their use of resources. This applies to both money and energy—leaders can achieve more when they work within their budgets instead of fighting against them.

Despite the challenges, leaders can still think big when planning and budgeting for government agencies while remaining within those budget confines.


Both local and federal agencies are familiar with the increasing constraints that government budgets are facing. As uncertainties in year-to-year funding levels continue, agencies must develop strategic plans that can help them tackle the challenges.

This means prioritization is critical. Be clear about your goals for the agency over the next 1 to 5 years. Only addressing the short-term could cause serious problems in year 3 or 4 of a 5-year plan.

From there, lay out a strategy for achieving those goals. For example, will you be using community engagement, public forums or interagency partnerships to pursue agency objectives? Are there other means or methods you can use?

You'll likely need to hold several meetings or discussions with managers at different levels within the agency or even with sister agencies. This approach will allow you to hear the different perspectives of those who have budgetary control or oversight. Although this may seem tedious in the near term, this process enables all the key players to feel seen and heard. It also helps build consensus by allowing everyone to come to an agreement on the core objectives.


The next step is to have discussions with your teams regarding these objectives. By involving people who were likely overlooked in the past, you'll increase both their level of engagement and their degree of accountability. When people feel they're part of the decision-making, they take ownership. 

Work with your teams to translate those agency or department objectives into team objectives. Remember to document and circulate what was agreed upon at every stage, because people's perceptions of what was said can vary.

This process will simplify the actual budgeting back-and-forth and limit the need for intergroup negotiation, because these groups now have common or complementary objectives. At the very least they understand how one group's actions impact the other.


After agreeing on the strategy, agency and department heads will find it easier to identify the projects, improvements and other key initiatives that will deliver the biggest impact. They can also move forward on their objectives over the next fiscal year. Then, they can begin delving into the actual budget analysis and allocation process.

As you work on the budget, maintain focus on the most important items and the objectives. Enlist the help of your managers and their teams to identify creative ways to stretch the budget. For example, instead of holding an in-person conference, is it possible to host it online? Can you partner with civic groups on certain efforts and split the costs? Encourage employees to brainstorm as a team.


To help your projects and initiatives have the most impact possible, utilize the technologies that are available to you. For example, with budgeting and forecasting software, you can stay on top of your budgeting process, foresee any shortfalls and make adjustments as needed. Even more, you can plan for those adjustments and request a funding allocation from an agency or department that might actually be below their budget projections and have surplus left over.

Budgeting for government agencies is an annual process, but it needs to be managed year-round. By optimizing your approach to planning, you can generate buy-in and engagement from your team and put your agency in a better position to achieve its goals.


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