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    Eade's Laws of Budgeting
    Eade's Laws of Budgeting
    Eade's Laws of Budgeting
    Ebook77 pages55 minutes

    Eade's Laws of Budgeting

    By Terry Eade

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    About this ebook

    Each of the thirty-two laws presented in this book are based on actual budgeting and financial circumstances that constantly plague chief fiscal officers and chief operating officers in all kinds of organizations, especially in colleges and school districts. Following each law is a discussion, which will expose the reader to the logic and philosophy behind the law. This follows the statements and reasons approach that you learned back in your high school geometry class. This is as close to mathematics as the book gets. It does not purport to get into any of the mechanical aspects of budget preparation but rather deals with human nature and the predictable interactions you can expect with various individuals and groups who become involved in the budgeting and operational aspects of colleges and school districts.

    Like my books on Basic Nercology and Basic Sarcology,this book uses humor and parody to illustrate some of the more pertinent aspects of building and controlling budgets in both educational institutions and other organizations as well. When I was making presentations, conducting workshops, and teaching classes in budgeting and fiscal management, the laws presented here were one of the tools used. They were used to make the attendees aware of the budget environment and the things they needed to be aware of as they became increasingly involved in this arena. At that time only the laws were provided and not the explanations and analysis which you will find in this book.

    LanguageEnglish
    PublisherTerry Eade
    Release dateMay 26, 2014
    ISBN9781311838117
    Eade's Laws of Budgeting
    Author

    Terry Eade

    Dr. Eade has a BA in economics from Central Washington University, an MBA in business administration from the University of Utah, and a PhD in higher education econometrics from the University of Washington. His professional career has included being an Air Force Squadron Commander, a Chief Fiscal Officer, a college Vice President, and the Commandant of a leadership academy. He has taught college classes in both management and finance. As a management consultant he trained managers and was a keynote speaker at various conventions. Dr. Eade is also an experienced poker player, a snowbird, a golfer, a motorcycle rider, and an author.

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      Book preview

      Eade's Laws of Budgeting - Terry Eade

      Eade's 1st Law of Budgeting

      At every budget meeting there will be one individual who has never attended a previous budget meeting and is unaware of the process, concepts, needs, projections, assumptions, or prior considerations. This individual will dominate the meeting.

      Dilution of Stability

      This phenomenon is also known as the principle of diminishing local cooperation. According to that principle, a void caused by momentary consensus, understanding, or agreement will attract a non-aligned body into the breach. Bringing the new attendee up to speed will only provide a temporary solution, as the equalization process will again bring in a new curmudgeon who will throw the situation out of alignment again.

      Displacement of Support

      Close observation will also reveal that the new person will displace at least one cooperative and supportive member of the committee. Usually the supportive member is a busy person with many other responsibilities. This individual is reticent to go back over the same ground again and feels that the process will never end nor reach a group consensus.

      Rekindling of Controversy

      The new member will also rekindle the opposition of at least one minority group, who's opinions were not reflected in the prior consensus. The opening of old wounds gives the opposition the feeling that the new individual may side with them and swing the group to the opposition viewpoint.

      Eade's 2nd Law of Budgeting

      The duration and intensity of discussion on an item will be inversely proportional to the impact of, flexibility on, and information about the item under consideration.

      Trivial Pursuits

      The concept that a bureaucratic body will tend to spend more time on trivial matters on which they have some knowledge and many opinions rather than on items of much higher substance was originally advanced by C. North Parkinson, in his now legendary book Parkinson's Laws. The validity of that proposition has not changed, nor is there any indication that such a change is likely.

      No Use is No Excuse

      To the above concept I would add that a bureaucratic body will not only refuse to be dissuaded by triviality, but also by the lack of flexibility or information. Thus, even though the group may concede that there is no choice on the matter, they may spend a protracted amount of time beating the subject to death.

      And the Beat Goes On

      The group may also agree that nothing further can be gained from discussing a particular subject until additional information is secured, then continue to discuss the matter in great depth, in some cases qualifying each statement by a disclaimer relating to the lack of information on the subject. There are even situations where the group feels compelled to come up with a variety of alternative conclusions, each one predicated upon a different interpretations of the lacking information.

      Eade's 3rd Law of Budgeting

      The more important and vital a budgetary item, the less inclined everyone will be to fund that item on the basis that it must be accomplished anyway, due to its necessity.

      Candy Syndrome

      This is what I call the candy syndrome because it reminds me of the way we used to operate when we were children. For most children, their first opportunity to manage money came at a fairly young age, when they were given an allowance or perhaps allowed to earn pocket money by running errands and doing chores around the house. While this experience illustrated some very rudimentary economic principals concerning saving versus spending and making consumption choices, it also provided the illusion of discretion.

      Illusion of Discretion

      Thus, when you had earned your allowance you certainly didn't want to spend it on food, utilities, rent, or probably even clothes. That money was meant for toys, a movie, ice cream, soda, and of course candy. All the rest was supposed to be there and could be taken for granted.

      Peter Pan Attitude

      Like Peter Pan, many of us would like to avoid growing up and having to deal with real world problems and constraints. Thus, as adults facing a store window full of shiny new programs, we tend to revert to our childhood attitudes and resist using any of our budget money for those boring necessities like maintenance, insurance, utilities, and replacement of equipment.

      Eade's 4th Law of Budgeting

      Parties with unrelated and occasionally even conflicting demands will combine forces in order to increase their collective leverage on the eventual outcome.

      Concern vs. Discern

      It is always interesting to see how people try to avoid the concept that there is constant competition between various programs or even components within the same program. On one particular occasion I recall

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