Budget Process at Urban Arts Institute

Students’ Responses
Author’s Name
Institutional Affiliation
Course Code and Name
Professor’s Name
Date
Students’ Responses
Rubbie’s Response
I agree with Rubbie that the significant problems with the budgeting process at the Urban Arts Institute (UAI) were a lack of proper management of financial resources, operating at maximum credit, and failure to have financial reserves for emergencies (The Crimson Group, Inc., n.d.). Even though borrowing is not bad, it should be highly regulated. An institution like UAI should set money aside to use during emergencies, as a way to facilitate faster response, preparation, and prevention of emergencies. Fiscal planning should ensure that all departments are allocated finances to enhance their smooth operations without over-relying on borrowed money.
Christian’s Response
My classmate makes it clear that UAI operating at maximum credit is problematic since it adversely affects the interest rates and reduces the probability of borrowing money from financial institutions. In addition, decision-makers who coordinated the institute’s funds did not communicate clearly about its bad financial state to the respective departments. That was misleading and might have hindered the implementation of proper policies. Fiscal planning facilitates medium and long-term budget planning, budget stability and execution, operational continuity...