The Georgeville city government provides a wide variety of s

The Georgeville city government provides a wide variety of services to the community. Among them is the protection provided by the police force. In order to provide that force it spends $3 million on salaries, $200,000 on vehicle costs, and $300,000 on supplies. The police force expects to have 7,000 measurable actions, consisting of 1,000 arrests, 4,000 traffic citations, and 2,000 responses to emergency calls It has noted that the average cost for each one of these actions is $429 if you simply divide the $3,000,000 department cost by the 7,000 specific individual actions. Some have argued that it is not cost-effective to give out traffic tickets, since the $429 cost per ticket exceeds the fine collected. The Georgeville Police Department is considering adopting a performance budget. The performance areas would be arrests, citations, and emergency responses. 3-27 The Police Department believes that activities related to making arrests consume 30 pèrcent of salaries and 40 percent of supplies. Traffic citations consume 30 percent of salaries and 10 percent of supplies. Emergency response takes up 15 percent of salaries and 25 percent of supplies. Additionally, it performs many other activities that collectively take up 25 percent of salaries and 25 percent of supplies. It also estimates that its vehicles are used 25 percent for arrests, 30 percent for citations, and 5 percent for emergency responses. How much money is budgeted for each arrest, citation, and emergency response? Regardless of your answer, assume that the cost per traffic citation exceeds the average fine collected. Should the police cease issuing citations? Why

Solution

A. Performance Budget INPUTS (Amounts in $) Total Arrests % Traffic Citations % Emergency Response % Others % Salary    3,000,000 30% 30% 15% 25% Vehicle Costs        200,000 25% 30% 5% 40% Supplies        300,000 40% 10% 25% 25% Volume             7,000               1,000                          4,000                                       2,000 CALCULATIONS Total Arrests Traffic Citations Emergency Response Others Salary    3,000,000          900,000                     900,000                                  450,000              750,000 Vehicle Costs        200,000             50,000                        60,000                                     10,000                80,000 Supplies        300,000          120,000                        30,000                                     75,000                75,000 Total    3,500,000       1,070,000                     990,000                                  535,000              905,000 Volume             7,000               1,000                          4,000                                       2,000 PERFORMANCE BUDGET Total Arrests Traffic Citations Emergency Response Total Cost    3,500,000       1,070,000                     990,000                                  535,000 Budgeted Volume             7,000               1,000                          4,000                                       2,000 Cost/Unit                500               1,070                              248                                           268 1 Money budgeted for each arrest, citations & emergency response For arrest for Citation For emergency response                500               1,070                              248 2 Even though cost per traffic citations exceeds the fine collected, police should not cease issuing citations Because citations issues are not only revenue generator, It is also an awareness to the violators that these much of the violations they have made and traffic authorities are watching their activities. It is also used as a vigilant mechanism. The main purpose of traffic citations is to reduce the no of traffic violations by giving traffic violation letters to the concerned thereby make them caution.