Prepared by Group 6:

KHAIRIYAH BINTI KHIRRUDDIN 1325998

NOR NADIAH BINTI MUCHLIZAR 1326832
NUR HASEENA BINTI HANAFE 1322762
 Located in northern Orange
County, California
 Incorporated in 1967 as a general
law city
 Also known as the birthplace of
Richard Nixon, the 37th president
of the US
 Growth rate of about 3000 people
per year (53,000 residents in 1991)
 Used a city manager form of
government
 Arthur Simonian was appointed as
the city manager (appointed since
1967)
 Yorba Linda was a contract city-the city
contracted with public and private agencies
to provide services to the city residents.
 California state law requires the cities to use
fund accounting to create a separation
between operating and capital transaction
and restrictions placed on revenues were
adhered to.
 Before 1986, Yorba Linda used line-item
budgeting.
 In 1986, Program Budgeting was implemented
to replace Line-Item Budgeting.
 For fiscal year 1991-92 and 1992-93, Mr Simonian
introduced several changes to the budgeting process
and content such as:
 1.More responsibilities given to department directors in
making expenditure projections.
 2.Budget manual was created to assist department
personnel with budgeting duties.
 3.More details was required regarding the purposes of
programs proposed and measurements used to evaluate
programs.

 On June 18,1991 the City Council approved the

budget
 However, the budget was not uninamously approved
because John Gullixson disagree with the increase of
24.9% in police services costs.
City Council members
Department directors
had little or no
tended to budget on
formal training in
a line-item basis
public administration
(resistance to change)
or policy

Increase in police
services costs and The City has no bonus
proposed salary for system (no
police force motivation)
personnel

Budget was not

unanimously
approved
 Inefficiency of budget preparation
 Inefficiency- Failure to make use of resources
and time and not achieving maximum
productivity
 Arthur C. Simonian
 City Manager of Yorba Linda
 Have control on the budget preparation
 5 Whys Analysis
Comparison Diagram
Inefficiency of budget
preparation

High initial
expenditure budget
submission

Failure to fulfill budget

manual accordingly

Manager was too

focused on
department’s budget

Competition with
other departments to
get higher allocations

Want to pursue
departments’ interests
Program- Line-Item
based based
Strength:
Strength:
Program budget
Convenient
objectives are
budgeting
clearly defined

Weakness:
Weakness:
Strategic goals
Requires deeper
may not be
understanding
achieved
 1. Status Quo
2. Revise the current budget
preparation
3. Use Top-Down Budgeting Approach
 Proceeds with the current budget even they
were not unanimously approved by the City
Council
 Save time from restructuring new budget
procedures
 Include appropriate monitoring measures
 To prevent managers pursuing department
interests rather than city objectives
 Eg: use Checklist method

 Propose appropriate monetary rewards for the

city’s personnel
 Eg: Bonus system
 Monetary Motivation Higher efficiency
¹Nonprofits Assistance Fund (n.d), 10 Step Annual Budgeting Checklist. Retrieved from
https://nonprofitsassistancefund.org/sites/default/files/publications/10_step_annual_budgeting_checklist_20
14.pdf
 Top-down budgeting involves the senior
management team developing a high-level
budget for the entire organization. Once these
budgets are created, amounts are allocated to
individual departments, and those departments
must then take those numbers and build their
own corresponding budgets within the confines
of the executive-level-created budget.²
 Reduce budget paddings made by the
department’s manager
 For the managers to produce budget that is in-
line with city objectives
 To control the utilization of funds allocated
² B. George, (July 5, 2017). Top Down or Bottom Up Corporate Budgeting-Which one is best? Retrieved
from http://www.truesky.com/top-down-or-bottom-up-corporate-budgeting-which-one-is-best/
 Alternative 2- Revise the current budget
preparation

 Top down approach is not sufficient to ensure

efficiency.
 It limits the lower management to think further
of city objectives and develop themselves
 Reduce the effectiveness when all has been
decided by the City Manager
 Nonprofits Assistance Fund (n.d), 10 Step Annual
Budgeting Checklist. Retrieved from
https://nonprofitsassistancefund.org/sites/default/f
iles/publications/10_step_annual_budgeting_checkli
st_2014.pdf
 B. George, (July 5,2017). Top Down or Bottom Up
Corporate Budgeting-Which one is best? Retrieved
from http://www.truesky.com/top-down-or-bottom-
up-corporate-budgeting-which-one-is-best/