NCJ Number
118453
Journal
Security Management Volume: 33 Issue: 5 Dated: (May 1989) Pages: 40-47
Date Published
1989
Length
8 pages
Annotation
This article discusses types of budgets, identifies information usually required to accompany budget requests, covers techniques of financial justification, and outlines a coordinated approach for presenting security budget requests.
Abstract
Four types of budgets most likely to be encountered are capital improvement budgets, which are used to fund the acquisition of corporate assets; operating expense budgets, which are used to fund the acquisition of routine expenses; maintenance expense budgets, which are used to fund expenditures for the routine upkeep of equipment and facilities; and emergency/contingency budgets, which are used to provide funds for the unexpected. The first step before requesting funds is to determine that the funds are needed. In presenting the request for funds, information should cover the nature of the project, time requirements or constraints, financial aspects, and justifications. In justifying project budget requests, four terms are useful: simple payback, cost-benefit ratio, present worth, and rate of return. These are methods for making economic comparisons between alternatives. The payback period is the result of dividing the total project cost by the expected annual savings. Present-worth analysis considers the effect of time with respect to investment potential and equipment life. The rate of return is the annual savings resulting from the investment.