1. Describe several operational and behavioral benefits that are generally attributed to a participative budgetary process. 2. Identify at least four deficiencies in Patricia Eklund's participative policy for planning and performance evaluation purposes. For each deficiency identified, recommend how it can be corrected.

1. Some of the operational and behavioral benefits that are generally attributed to a participatory budgeting process are as follows:

a) Utilization of the best knowledge of activities in a specific area, because the participants are close to daily operations.

b) Goals that are more realistic and acceptable.

c) Improved communication and group cohesiveness.

d) A sense of commitment and willingness to be held accountable for the budget.

2. Four deficiencies in Patricia Eklund's participatory policy for planning and performance evaluation, along with recommendations of how the deficiencies can be corrected:

Deficiencies Recommendations The setting of constraints on fixed expenditures includes uncontrollable fixed costs, thereby mitigating the positive effects of participatory budgeting. Rewards should be based on meeting budget and/or organizational goals or objectives. The arbitrary revision of approved budgets defeats the participatory process. The contingency budget should be separate, over and above each department's srcinal submission. The division manager holds back a percentage of each budget for discretionary use. Managers should be involved in the revision of budgets. Managers could submit a budget with programs at different levels of funding. Evaluation based on budget performance must be accompanied with intrinsic rewards. Divisional constraints could be at a budget "kick-off meeting; however individual limit of controllable expenses should be set by each manager