- Competition for jobs is expected.
- Although a bachelor’s degree generally is the minimum
educational requirement, many employers prefer or require a master’s
- About 52 percent of all budget analysts work in
Federal, State, and local governments.
Nature of the Work
Deciding how to efficiently
distribute limited financial resources is an important challenge in all
organizations. In most large and complex organizations, this task would be
nearly impossible without budget analysts. These workers play the primary role
in the development, analysis, and execution of budgets, which are used to
allocate current resources and estimate future financial requirements. Without
effective budget analysis and feedback about budgetary problems, many private
and public organizations could become bankrupt.
Budget analysts can be
found in private industry, nonprofit organizations, and the public sector. In
private sector firms, a budget analyst examines budgets and seeks new ways to
improve efficiency and increase profits. Although analysts working in nonprofit
and governmental organizations usually are not concerned with profits, they
still try to find the most efficient distribution of funds and other resources
among various departments and programs.
Budget analysts have many
responsibilities in these organizations, but their primary task is providing
advice and technical assistance in the preparation of annual budgets. At the
beginning of each budget cycle, managers and department heads submit proposed
operational and financial plans to budget analysts for review. These plans
outline prospective programs, including proposed funding increases and new
initiatives, estimated costs and expenses, and capital expenditures needed to
finance these programs.
Analysts examine the budget
estimates or proposals for completeness; accuracy; and conformance with
established procedures, regulations, and organizational objectives. Sometimes,
they employ cost-benefit analysis to review financial requests, assess program
tradeoffs, and explore alternative funding methods. They also examine past and
current budgets and research economic and financial developments that affect
the organization’s spending. This process enables analysts to evaluate
proposals in terms of the organization’s priorities and financial resources.
After the initial review
process, budget analysts consolidate individual departmental budgets into
operating and capital budget summaries. These summaries contain comments and
statements that support or argue against funding requests. Budget summaries
then are submitted to senior management, or, as is often the case in local and
State governments, to appointed or elected officials. Budget analysts then help
the chief operating officer, agency head, or other top managers analyze the
proposed plan and devise possible alternatives if the projected results are
unsatisfactory. The final decision to approve the budget, however, usually is
made by the organization head in a private firm or by elected officials in
government, such as the State legislature.
Throughout the remainder of
the year, analysts periodically monitor the budget by reviewing reports and
accounting records to determine if allocated funds have been spent as
specified. If deviations appear between the approved budget and actual
performance, budget analysts may write a report providing reasons for the
variations, along with recommendations for new or revised budget procedures. To
avoid or alleviate deficits, budget analysts may recommend program cuts or
reallocation of excess funds. They also inform program managers and others
within their organization of the status and availability of funds in different
budget accounts. Before any changes are made to an existing program, or before
a new one is implemented, a budget analyst must assess the program’s efficiency
and effectiveness. Analysts also may be involved in long-range planning
activities such as projecting future budget needs.
The amount of data and
information that budget analysts are able to analyze has greatly increased
through the use of computerized financial software programs. The analysts also
make extensive use of spreadsheet, database, and word-processing software.
Budget analysts have seen
their role broadened as limited funding has led to downsizing and restructuring
throughout private industry and government. Not only do they develop guidelines
and policies governing the formulation and maintenance of the budget, but they
also measure organizational performance, assess the effects of various programs
and policies on the budget, and help draft budget-related legislation. In
addition, budget analysts sometimes conduct training sessions for company or
government agency personnel regarding new budget procedures.
analysts usually work in a comfortable office setting. Long hours are common
among these workers, especially during the initial development and midyear and
final reviews of budgets. The pressures of deadlines and tight work schedules
during these periods can be stressful, and analysts usually are required to
work more than the routine 40 hours a week.
Budget analysts spend the
majority of their time working independently, compiling and analyzing data and
preparing budget proposals. Nevertheless, their schedules sometimes are
interrupted by special budget requests, meetings, and training sessions. Some
budget analysts travel to obtain budget details and explanations of various
programs from coworkers, or to personally verify funding allocation.
Qualifications, and Advancement
firms and government agencies generally require candidates for budget analyst
positions to have at least a bachelor’s degree, but many prefer or require a
master’s degree. Within the Federal Government, a bachelor’s degree in any
field is sufficient for an entry-level budget analyst position, but, again,
master’s degrees are preferred. State and local governments have varying
requirements, but a bachelor’s degree in one of many areas—accounting, finance,
business, public administration, economics, statistics, political science, or
sociology—may qualify one for employment. Many States, especially larger, more
urban States, require a master’s degree. Sometimes a degree in a field closely
related to that of the employing industry or organization, such as engineering,
may be preferred. Some firms prefer candidates with a degree in business
because business courses emphasize quantitative and analytical skills. Many
government employers prefer candidates with strong analytic and policy analysis
backgrounds that may be obtained through such majors as political science,
economics, public administration, or public finance. Occasionally,
budget-related or finance-related work experience can be substituted for formal
Because developing a budget
involves manipulating numbers and requires strong analytical skills, courses in
statistics or accounting are helpful, regardless of the prospective budget
analyst’s major field of study. Financial analysis is automated in almost every
organization and, therefore, familiarity with word-processing programs and with
financial software packages used in budget analysis often is required. Software
packages commonly used by budget analysts include electronic spreadsheet,
database, and graphics programs. Employers usually prefer candidates who
already possess these computer skills.
Those seeking a career as a
budget analyst also must be able to work under strict time constraints. Strong
oral and written communication skills are essential for analysts because they
must prepare, present, and defend budget proposals to decision makers.
In addition, budget
analysts, along with all other financial officers, must abide by strict ethical
standards. Integrity, objectivity, and confidentiality are all important to
budget analysis, and budget analysts must avoid any personal conflicts of
Entry-level budget analysts
may receive some formal training when they begin their jobs, but most employers
feel that the best training is obtained by working through one complete budget
cycle. During the cycle, which typically is 1 year, analysts become familiar
with the various steps involved in the budgeting process. The Federal
Government, on the other hand, offers extensive on-the-job and classroom training
for entry-level trainees. In addition to on-the-job training, budget analysts
are encouraged to participate in various professional development classes
throughout their careers.
Some government budget
analysts employed at the Federal, State, or local level may earn the Certified
Government Financial Manager (CGFM) designation granted by the Association of
Government Accountants. Other government financial officers also may earn this
designation. To do so, candidates must have a minimum of a bachelor’s degree,
24 hours of study in financial management, and 2 years of government work
experience in financial management. They also must pass a series of three exams
that cover topics on the organization and structure of government; governmental
accounting, financial reporting, and budgeting; and financial management and
control. To maintain the CGFM designation, individuals must complete 80 hours
of continuing professional education every 2 years.
Budget analysts start their
careers with limited responsibilities. In the Federal Government, for example,
beginning budget analysts compare projected costs with prior expenditures,
consolidate and enter data prepared by others, and assist higher grade analysts
by doing research. As analysts progress in their careers, they begin to develop
and formulate budget estimates and justification statements, perform detailed
analyses of budget requests, write statements supporting funding requests,
advise program managers and others on the status and availability of funds for various
budget activities, and present and defend budget proposals to senior managers.
Beginning analysts usually
work under close supervision. Capable entry-level analysts can be promoted to
intermediate-level positions within 1 to 2 years, and then to senior positions
within a few more years. Progressing to higher levels means added budgetary
responsibility, and can lead to a supervisory role. Because of the importance
and high visibility of their jobs, senior budget analysts are prime candidates
for promotion to management positions in various parts of their organizations,
or with other organizations with which they have worked.
analysts held 58,000 jobs throughout private industry and government in 2004.
Federal, State, and local governments are major employers, accounting for 52
percent of budget analyst jobs. About 23 percent worked for the Federal
Government. Many other budget analysts worked in manufacturing, financial
services, or management services. Other employers include schools and
for budget analyst jobs is expected over the 2004-14 projection period.
Candidates with a master’s degree should have the best job opportunities.
Familiarity with computer financial software packages also should enhance a
jobseeker’s employment prospects.
Employment of budget
analysts is expected to grow about as fast as the average for all occupations
through 2014. Employment growth will be driven by the continuing demand for
sound financial analysis in both the public and the private sectors. In
addition to employment growth, many job openings will result from the need to
replace experienced budget analysts who transfer to other occupations or leave
the labor force.
The increasing efficiency
of computer applications used in budget analysis has increased worker
productivity by enabling analysts to process more data in less time. However,
because budget analysts now have much more data available to them, their jobs
are becoming more complicated. In addition, as businesses and other
organizations become more complex and specialized, budget planning and
financial control will demand greater attention. These factors should offset
any adverse effects of computer applications on employment of budget analysts.
In coming years, all types
of organizations will continue to rely heavily on budget analysts to develop
and analyze budgets. Because of the importance of financial analysis performed
by budget analysts, employment of these workers should remain relatively
unaffected by any downsizing in the Nation’s workplaces. In addition, budget
analysts usually are less subject to layoffs than are many other workers during
economic downturns because financial and budget reports must be completed
during periods of both economic growth and slowdowns.
of budget analysts vary widely by experience, education, and employer. Median
annual earnings of budget analysts in May 2004 were $56,040. The middle 50
percent earned between $45,170 and $70,530. The lowest 10 percent earned less
than $36,850, and the highest 10 percent earned more than $87,380. Median
annual earnings in the industries employing the largest numbers of budget
analysts in May 2004 were:
According to a 2005 survey
conducted by Robert Half International—a staffing services firm specializing in
accounting and finance—starting salaries of financial, budget, treasury, and cost
analysts in small companies ranged from $29,750 to $36,250. In large companies,
starting salaries ranged from $33,500 to $40,000.
In the Federal Government,
budget analysts usually started as trainees earning $24,677 or $30,567 year in
2005. Candidates with a master’s degree began at $37,390. Beginning salaries
were slightly higher in areas where the prevailing local pay level was higher.
The average annual salary in 2005 for budget analysts employed by the Federal
Government in nonsupervisory, supervisory, and managerial positions was
analysts analyze and interpret financial data, make recommendations for the
future, and assist in the implementation of new ideas and financial strategies.
Other workers who have similar duties include accountants and auditors, cost
estimators, economists, financial analysts and personal financial advisors,
financial managers, loan counselors and officers, and management analysts.
Source: U.S. Department
of Labor, Bureau of Labor Statistics