Line item budget

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Line item budget
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The line item budget has been a tool used to assign different amounts to each budget line for many years. Detail planning underscores the particular articles for which funds are spent. Accordingly, spending plans are arranged around each budget line, and the new budget plan depends on increments to cach line's base normally a year ago's spending level. Generally, line item budget spending plans have as their base three wide "lines"[1]:

  • personnel (the costs include benefits for school employees and salaries),
  • maintenance and operations (cover daily operational expenses, from utilities to maintenance),
  • supplies and equipment (they cover everything from cleaning products and textbooks to computers and electronic equipment).

The line item budget contains all items to purchase that are listed on the budget form lines. The system offers strict expenditure control and is transparent and easy to prepare. Be that as it may, detail spending plans will in general fortify themselves by proceeding with quite a long time after year with no survey of need or effectiveness[2].

Significance of line item budget

Most state and local governments use line item budget. Based on the previous year's budget, it assumes the effectiveness of individual entries. It reflects the principles of incremental budgeting. It is to ensure that budgeting line items does not endanger any agency or program. Then again, it has a few disadvantages. Tolerating the legitimacy of a program, essentially in light of the fact that it showed up in the previous year's spending limit, disregards the topic of whether the program is still necessary or potentially powerful[3].

Example of line item budget

“When items are cut from the budget by a reviewing officer, no information is available regarding the subsequent impact on programs. For instance, a piece of equipment may be comprised of two separate units which are listed on two separate lines of the budget. The reviewing officer may delete one unit on a line-item budget, not knowing that the two units must be connected for either to work. Usually the manager must wait until the next budget year to get the deleted item. Like the lump-sum budget, a line-item budget offers very little possibility for determining if program objectives are being achieved. Line-item budgets are still being used, however[4].”

Types of Operating Budgets

Different types of operating budgets are used in contemporary public finances. Among the more typical are the accompanying[5]:


  1. D. C. Thompson, F. E. Crampton, R. C. Wood (2012), p. 152
  2. W. D. Schmidt, D. A. Rieck, Ch. W. Vlcek (2000), p. 238
  3. J. M. Elliot, S. R. Ali (2007), p. 256
  4. W. D. Schmidt, D. A. Rieck, Ch. W. Vlcek (2000), p. 238
  5. D. R. Carmichael ,P. H. Rosenfield (2003), p. 37


Author: Monika Wójcik