Overview of Government Agency Project
Question
Often, part of a government agency’s budget is devoted to capital projects. No matter how well a project and its costs are planned for, there are always residual effects on the budget and on future budgeting practices. In this assignment, you’ll overview a government agency’s project, including its effects on the agency’s budget, and you’ll consider practices and requirements to support accurate reporting of projects.
Step 2: Research a state or local government capital project (NOT A PRIVATE SECTOR PROJECT) e.g., new building or structure, park improvements, road improvements, addition to a municipal building, the agency that is responsible for the project, and the operating budget for the agency.
Step 3: Choose one of the following options for this assignment:
• Write a 1,050- to 1,400-word APA-formatted paper.
OR
• Create a 12- to 16-slide Microsoft® PowerPoint® presentation with speaker notes and/or narration.
Step 4: Address the following in your paper or presentation:
• Give a brief overview of the chosen government capital project and of the agency responsible (i.e., size and responsibilities).
• Explain the advantages, disadvantages, and residual effects of the project on the agency's operating budget.
• How does the project affect the debt in the short and long term?
• How does the project affect operating expenses in the short and long term?
• Explain how the operating expense for the project differs from government debt items.
• Identify how the agency included training resources in its budget for the project. If they did not include training resources, propose how the agency could or should address training in their budget.
• Describe any evidence that the agency employed accurate reporting practices for the project. Would you suggest any differences in their approach? If accurate reporting practices are not evident, what should the agency do to ensure accurate reporting?
• Summarize your findings of the effects of the capital project on the operating budget, and make recommendations for improvement.
Step 5: Cite a minimum of 2 peer-reviewed sources.
Step 6: Format your paper consistent with APA guidelines to include, at a minimum, the APA cover page, Introduction, level headers/titles for each required assignment discussion point, Conclusion, and Reference page.


Solution
Overview of Government
Agency Project
Based on the definition, a capital
project is a government project that helps maintain or improve assets. In most
instances, the local governments are the one who takes the duty of ensuring
that there is improvement and good maintenance of infrastructure. The main
sources of capital projects funding are loans that the government or the agency
responsible for the project implementation approach lending institutions or
banks. It is evident that in the United States, the art of infrastructure is
well known, and the country has been at the forefront of enhancing capital
projects. For that case, the capital project I would like to discuss is the
California high-speed rail project, which publicly funded the railways' system
under construction in California (Top 5 ongoing Mega Projects in the USA in
2020). The project is projected to connect various parts, including Anaheim
Regional Transportation International. In addition, with an approximated budget
of $77 billion, the project is designed to encompass over 800 miles with 24
stations. Given that the project is large, it will run through areas of the state
with extremely different environmental, geographical, and economic issues. That
is why it has been broken into various sections. Moreover, the agency responsible
for the identified project is The United States Department of Transportation,
which was responsible for the project's funding to ensure that the nation has
the first-speed rail system to enhance and better connect the community with an
advanced technological railway (Boyd,
2018). In addition, the design, planning and building of the project was
the responsibility of the California High-Speed Rail Authority. The authority,
in its view, believed that the project would contribute to an economic development
cleaner environment for the people of California and its surrounding.
The advantage of the capital project
I have analyzed is that it helps the USDT support growth and plan how to fund
the project in the future. With the capital project, the agency can create an
operating budget to plan and monitor its operational resources. Thus, the
agency can raise large sums of money to invest in long-term projects like the
California high-speed Rail project with the capital project. However,
the capital project can disadvantage the agency's operating budget because any
wrong decision in the project finance can hurt the agency's operation.
Basically, the wrong budgeting for the project or delay can lead the agency to
manage some of its activities because it will have to pay for the loans used to
fund the project from its operating budget. The residual effects of the project
include the financial as the project in future due to change in the economy
cannot be able to generate the amount of money used to fund it thus leading to
operating budget of agency used to repay loans.
The California high-speed rail
project is a long-term infrastructure project funded by less public resources.
For that case, the debt used to finance the project is paid back from the cash
flow generated by the project after completion. It is evident that the project
effect debt in either the short or long term if it fails to be completed on
time. In most instances, a megaproject like CHSR has to work on its budget
effectively so that a short delay on repayment of the debt can cause leverage
ratios to the project in the short and long term (Short-term debt (n.d).
Therefore, it is evident that capital projects affect debt in the short and
long term because their repayment depends on the project's cash flow and net
income.
For the successful completion of the CHSR
project, there is a major impact it will cause on the agency's operating
expenses in the short and long term. This is because a government agency must implement
the budget and finance it throughout its construction process (Soares, Magalhães & Mendes, 2020).
For that reason, the agency will have to cut down some of its expenses to fund
the project for successful completion. Therefore, it is evident that the project
affects operating expenses because it increases expenditure and allocation for
short and long terms to successfully complete the project. It is evident that
the project affects operating expenses because most of the funds are allocated
to develop and complete the project construction.
The completion of the California High-Speed
Railway project needs a significant budget that helps in the project's
successful construction. In that case, it is significant that for the
successful completion of the project, the construction needs operating expenses
that are being allocated to the project by the government to enable the successful
completion of the project. Basically, different from the government debts,
project operating expenses are major money that the project spends to buy,
maintain and pay the workers and is non-refundable (Short-term debt (n.d).
The project operating expenses always represent day-to-day expenditures that
are designed to keep the construction running. However, unlike project operational
expenses, government debt is always the total amount of money when the
government owes a sovereign state lender and is always required to pay interest
on its debt.
From the agency's budget, it is
significant that it has not included training resources in its budget for the
project. Having analyzed the agency, it is evident that it only invested in
grand competitive programs that partnered with the community to deliver surface
transportation projects with significant benefits. Given that the agency did
not include training resources in its budget for the project, it should know
the importance of training resources and how it helps develop the best skill
and knowledgeable individuals that would help deliver the project on time and
successfully. Therefore, given the importance of training resources, it is
significant that the agency finds a training budget per employee in the project
as that will improve the productivity and performance of the employees within
the capital project.
Moreover, based on the financial
expenditure and progression of the project, it is evident that the agency did
not employ accurate reporting practices for the project. This is because the
total amount for the completion of the project was $77 billion, but the agency
provided the agency with a grant of $24 million to advance its economic
development and improve infrastructure around the place (Top 5 ongoing Mega
Projects in the USA in 2020). Given that the agency has no accurate
reporting, it is important to come up with operating expenses of the project
that will help report the project's accurate expenditures as it progresses. Moreover,
given that the project uses money, the agency should hire an external editor to
help develop the exact expenses of the project as it progresses. Also, the
agency should look at the balance sheet and income statement errors. By doing
that, the agency will accurately report the project's operating expenses and
the amount of money needed to complete the project on time.
In conclusion, it is evident that a capital
project significantly affects the agency's operating budget. From the personal
analysis of the California High-Speed Railway project, it is evident that the
project depended on multiple funding sources, including debt, grants, and cash
from the government agency, which is DOT. Basically, the operating budget is a detailed
projection the project expects to spend in a given period; thus, to ensure that
the project is completely successful, the project should focus on enhancing
accountability on its expenditure.
References
Boyd, A. S. (2018). The United
States department of transportation. Proceedings of the IEEE, 56(4),
396-401.
Short-term debt.
Corporate Finance Institute. (n.d.). Retrieved February 14, 2022, from https://corporatefinanceinstitute.com/resources/knowledge/finance/short-term-debt
Soares, C. A. P., Magalhães, M. A.,
& Mendes, J. R. (2020). Investment Capital Budget Method Oriented to
Project Management. GSJ, 8(3).
Top 5 ongoing Mega Projects in the USA in
2020. Construction Review Online. Retrieved February 14, 2022, from https://constructionreviewonline.com/biggest-projects/top-5-ongoing-mega-projects-in-usa




About Author
Tough Essay Due? Hire Tough Essay Writers!
We have subject matter experts ready 24/7 to tackle your specific tasks and deliver them ON TIME, ready to hand in. Our writers have advanced degrees, and they know exactly what’s required to get you the best possible grade.
Find the right expert among 500+
We hire Gradewriters writers from different fields, thoroughly check their credentials, and put them through trials.
View all writers