Successful departmental and financial resources administration, including fire departments, is essential for any business (Dewi et al., 2019). Several techniques have been employed throughout history to manage financial and departmental resources. Some of these techniques, including capital budgeting, program-based budgeting, and line-item budgeting, are effective and still in the fire service and economy today. Although these techniques are available, many fire departments have been severely impacted by budget cuts, which have caused them to cut back on services, staff, or equipment. The literature will examine how financial and resource management is applied in fire service and modern economy and analyze a fire department impacted by budget cuts.
Financial and Resource Management Methods
Line-item budgeting is a technique that entails creating an extensive list of each item to be purchased together with an estimate of the expenses involved (Abdalla, 2020). Several fire departments utilize this technique frequently since it makes it easier to track their costs and thoroughly analyze their budget. Despite being widely used, line-item budgeting has drawn criticism for needing to be more flexible and capable of changing in response to shifting priorities. Budgets must be flexible and adaptive in today’s world of rapid change in order to keep up with shifting priorities and conditions. Unfortunately, because line-item budgeting often allots a fixed budget amount to each item without considering whether these expenses are still essential, it is not adaptable enough to account for these changes. This may lead to budget constraints and hinder a fire department’s capacity to address new or emerging concerns adequately.
Budgeting that is based on programs and activities rather than specific products is known as program-based budgeting. Matching expenditures to the organization’s goals and objectives gives it more flexibility when reallocating resources to accomplish its desired outcomes (Ssekitoleko, 2020). Due to its ability to help fire departments match their spending with their objective, this technique has grown in popularity. With the help of program-based budgeting, fire departments may assess the success of their programs, allot resources appropriately, and monitor their development. This method offers a framework for decision-making focused on obtaining the intended results and helps departments be more strategic in their expenditures. Also, this approach can foster teamwork towards a single objective and facilitate communication across many departments.
Capital budgeting is a strategy that entails making plans to purchase significant assets, including structures, cars, and machinery. Estimating the cost of obtaining these assets, their maintenance expenses, and the finance required to buy and maintain them over their useful life is crucial for this strategy (Malenko, 2019). Capital budgeting is crucial for fire departments, which depend mainly on specialized tools and trucks to complete their work efficiently. Fire departments must have the funds to purchase and maintain the tools and vehicles to respond quickly to crises. By successfully allocating money, capital budgeting aids fire departments in keeping their apparatus and trucks up-to-date and operational. Additionally, it assists them in budgeting for future costs and reducing the possibility of unplanned spending brought on by equipment failure.
Financial and Resource Management in a Fire Department
The New York City Fire Department (FDNY), the most extensive fire department in the country, offers city residents necessary services like fire suppression, emergency medical care, and dangerous material response. Budget cuts, however, have caused FDNY to cut back on services and staffing, as they have done for many other fire departments (Harrald, 2019). Financial cuts have resulted in closing of fire stations and reduced the number of firefighters and Emergency medical technicians available to respond to emergencies. Residents in some parts of the city now need longer response times, worse fire safety, and fewer medical services.
The FDNY has cut back on services, employees, and equipment due to budget cuts. Due to having to limit the number of engine and ladder companies in some locations, these budget cuts have hindered the department’s ability to respond to crises efficiently. As a result, emergency response times have grown longer, and service levels have dropped. Also, the FDNY had to cut workforce levels owing to financial restrictions, which added to the stress on the surviving firefighters (Harrald, 2019). Resources within the agency have been stretched due to the department’s need to decide which services to cut or discontinue. Firefighters’ ability to respond to situations effectively has also been hampered by the reduced staffing numbers, potentially endangering their safety and the public they serve.
Impact on the Community
Budget cuts have impacted the communities that the FDNY serves. People who live in places with fewer ladder and engine firms are more at risk during emergencies. In cases like fires, where every second counts, the lengthier reaction times and lower service levels might mean the difference between life and death (Cleven et al., 2021). Also, due to workforce reduction, the FDNY has found it challenging to give the community the support and services it needs.
The manning reduction has significantly impacted the morale and well-being of the remaining firefighters. As a result of being expected to perform more with fewer resources, the remaining firefighters are increasingly stressed and exhausted. Due to extended workdays and more calls for help, the firefighters are becoming burned out, which may hinder their capacity to offer adequate care and support in an emergency.
The budget reduction has also impacted the recruitment and retention of firefighters in the FDNY. Much time and money must be invested in training and education because firefighting is a complex and physically demanding vocation. Firefighters have fewer incentives and resources, making the job less alluring to potential recruits. In addition, with fewer resources available, firefighters could not feel appreciated or supported, which would increase attrition rates (Cleven et al., 2021). The FDNY is not the only organization affected by the budget reduction. The community may have economic effects from the reduction in services. Businesses may be reluctant to invest in locations with higher risks of fires or other calamities; for instance, insurance rates may rise where service standards have declined.
New Methods for Delivering Better Service
One method that can be used to better the services is performance-based budgeting. This modern approach to financial and resource management focuses on the outcomes and results of programs rather than just their costs (Malenko, 2019). This method benefits fire departments, enabling them to align their spending with their mission and ensure that resources are being used effectively. Performance-based budgeting can help fire departments identify which programs produce the desired results and allocate resources accordingly.
By focusing on outcomes and results, performance-based budgeting can help fire departments identify areas where improvements can be made, such as response times or firefighter safety. This can lead to more effective use of resources and, ultimately, better service for the community. Performance-based budgeting can also help fire departments to evaluate the effectiveness of new initiatives or programs and adjust their spending accordingly. Moreover, performance-based budgeting can help fire departments communicate their value to the community and stakeholders. By measuring and reporting on the outcomes and results of programs, fire departments can demonstrate their impact on the community and justify the resources they require.
Another method that can help deliver better service is shared services, which involves sharing resources and personnel across multiple departments. Shared service is a strategy that involves sharing resources and personnel across multiple departments to improve efficiency and reduce costs. For fire departments, this means collaborating with other agencies or departments to share resources such as vehicles, equipment, and personnel. By sharing these resources, fire departments can reduce costs and improve efficiency. One example of shared services is sharing specialized equipment between multiple departments. Instead of purchasing equipment, each department can share resources and save money. Similarly, departments can collaborate on training programs to save on costs and improve the quality of training. Another benefit of shared services is the ability to respond to emergencies more effectively. By sharing resources, departments can ensure they have the equipment and personnel to respond to emergencies promptly and efficiently.
In conclusion, adequate financial and departmental resource management is essential for the success of any organization, including fire departments. While traditional methods such as line-item budgeting are still prevalent in many departments, more adaptable and flexible approaches like program-based and capital budgeting are becoming increasingly popular. Budget cuts are common in many fire departments, impacting their ability to respond effectively to emergencies. The New York City Fire Department is a prime example of how budget cuts can reduce services, personnel, and apparatus. These cuts have profoundly impacted the community, increasing response times, decreasing service levels, and jeopardizing the safety of firefighters and the public they serve. The reduced staffing levels have also increased stress and fatigue for the remaining firefighters, leading to higher burnout and attrition. Adequate financial and resource management is crucial for ensuring the safety and well-being of the community and the firefighters who serve them.
References
Abdalla, A. (2020). Line Item Budgeting on Labor Costs to the Level of Income. Journal of Asian Multicultural Research for Economy and Management Study, 1(1), 27–32.
Cleven, K. L., Rosenzvit, C., Nolan, A., Zeig-Owens, R., Kwon, S., Weiden, M. D., … & Prezant, D. J. (2021). Twenty-year reflection on the impact of World Trade Center exposure on pulmonary outcomes in Fire Department of the City of New York (FDNY) rescue and recovery workers. Lung, 199(6), 569-578.
Dewi, N., Azam, S., & Yusoff, S. (2019). Factors influencing the information quality of local government financial statements and financial accountability. Management Science Letters, 9(9), 1373–1384.
Harrald, J. R. (2019). Emergency management restructured: Intended and unintended outcomes of actions taken since 9/11. In Emergency Management (pp. 167-189). Routledge.
Malenko, A. (2019). Optimal dynamic capital budgeting. The Review of Economic Studies, 86(4), 1747-1778.
Mujennah, M., Artinah, B., & Safriansyah, S. (2019). Performance-based budgeting as surveillance for the accountability of local governments. Asia Proceedings of Social Sciences, 4(3), 125-128.
Ssekitoleko, J. (2020). Strengthening budgeting for sustainable development: Uganda’s transition from output-based to program-based budgeting.
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