In recent years, rising prices — encountered everywhere from grocery stores to gas stations — have increased consumers’ focus on sound budgeting practices. Organizations face rising prices, too, coupled with project overruns of 30 to 45 percent, per a McKinsey & Co. report. This emphasizes the importance of careful financial oversight.
Budget analysts keep spending on track in both public and private organizations through transparency and ethical practices. Organizations that prioritize transparent reporting reinforce a culture of honesty and integrity.
Individuals who are interested in managing budgets and meeting these challenges can benefit from pursuing an advanced degree, such as a Master of Public Administration (MPA). An MPA program helps individuals develop the skills necessary for roles in the government or nonprofit sector with a focus on budget analysis.
Budget analysts help ensure effective governance, growth and financial compliance in all types of organizations, including government agencies, private companies and universities. Through financial oversight and budgeting analysis, they help organizations adapt to changes in the organizations’ financial resources.
A budget analyst’s daily responsibilities can range from preparing reports and monitoring spending to advising decision-makers on budgeting decisions, such as on how to allocate funds.
Activities a budget analyst may perform include:
Budget analysts also review budget proposals for accuracy, completeness and regulatory compliance. They leverage their knowledge and communication skills to explain funding requests to internal stakeholders, legislators and the public. When necessary, they suggest alternatives to ensure spending remains within set parameters.
Here are a few more specific explanations of what a budget analyst does.
A budget analyst assesses cost-benefit scenarios by analyzing potential returns and costs and exploring alternative funding, such as grants or partnerships, to diversify their organization’s financial resources.
They also perform variance analysis by comparing budgeted figures to actual results, categorizing differences as favorable, when revenues exceed expectations or expenses are lower, or unfavorable, when revenues fall short or expenses exceed projections. Variances occur due to the inherent unpredictability of costs and revenues.
Budget analysts also perform audits. Activities in auditing processes may include reviewing historical data, estimating future needs to draft detailed budget proposals and assessing existing budgeting practices to ensure efficiency and regulatory compliance. Audits can reveal opportunities for improvements, and a budget analyst can offer relevant proposals to enhance the effectiveness and efficiency of the organization’s budgeting practices.
Budget analysts may propose budget cuts to eliminate waste, preparing concise financial reports that detail their proposals, audit findings and analyses. They present their reports to management and collaborate with various departments to ensure the proposals align with the organization’s objectives. They may also provide frameworks that support the organization’s strategic planning and enhance its overall financial performance.
To succeed in their roles, budget analysts pursue formal education, gain practical experience and, sometimes, obtain a professional certification.
Budget analysts work in many industries. Becoming a budget analyst typically requires a bachelor’s degree in an area such as business, social science, psychology or mathematics. Courses in accounting, economics and statistics lay the foundation for effective budgeting and data analysis.
Some professionals working in the public sector may choose to pursue a master’s degree to further enhance their public administration career prospects.
Individuals enrolled in a MPA program can benefit from a curriculum that embeds integrity, public service, democratic values, professionalism, and equity and diversity as core values. An MPA program that balances scholarship with practical applications can help equip public and nonprofit professionals with an interdisciplinary skill set they can immediately use in their roles.
In order for a budget analyst to do what they do, they need strong analytical, mathematical, communication and problem-solving abilities, along with spreadsheet, database and budgeting software proficiency.
Relevant experience can be gained through internships, volunteer work or entry-level roles in budgeting, accounting or finance. Membership in a professional association, such as the American Association for Budget and Program Analysis (AABPA) or the Association for Budgeting and Financial Management (ABFM), offers professionals networking opportunities and access to industry resources.
Obtaining a certification can further bolster a budget analyst’s credentials. For those in government roles, the certified government financial manager (CGFM) credential is available. Earning and maintaining this certification entails meeting certain educational requirements, adhering to a professional code of ethics, passing exams and acquiring government financial management experience, along with pursuing ongoing continuing education.
According to projections from the U.S. Bureau of Labor Statistics (BLS), employment of budget analysts will grow 4 percent from 2023 to 2033, which is about the same as the average growth projected for all occupations. This growth is expected to be driven by an ongoing demand for balancing government budgets.
The BLS also reports that the median annual salary for budget analysts was $84,940 as of May 2023. Those in the lowest 10 percent of earners made less than $56,760, while those in the highest 10 percent made more than $131,630. Most budget analysts work in federal, state and local government, where the median annual wage was $98,230. Those who work in the manufacturing sector, particularly in magnetic and optical media reproduction, have the highest median salary at $126,140.
Effective budget analysis is essential for maintaining financial transparency and accountability in organizations in both the public and private sectors. Leaders seeking to enhance their skills in managing resources and driving sound financial decision-making may benefit from further education, such as by pursuing an MPA degree. Completing an MPA degree program can prepare individuals to pursue a budget analyst role, as well as any of a number of other roles, such as a policy analyst, city manager, or urban and regional planner role.
Augusta University Online’s MPA program is designed to equip professionals with the advanced knowledge and practical skills needed in today’s evolving financial landscape. Interested leaders are encouraged to learn more about this program and how it can help them strengthen their capabilities in budget analysis and public financial management.
Learn more about AU Online’s MPA program today.
Recommended Readings
Public Sector vs. Private Sector: MPA Career Comparison
5 Public Administration Careers for MPA Graduates
MPA vs. MBA: Differences and Outcomes
Sources:
Finmark, “How to Do Budget Analysis in 4 Easy Steps”
ICMA, “Building Trust With a Transparent Budget”
Indeed, “How to Perform a Budget Analysis (With Definition and Tips)”
Indeed, “What Is a Budget Analyst? (Duties, Salary and Qualifications)”
Investopedia, “Budget Variance: Definition, Primary Causes, and Types”
McKinsey & Company, “Increasing Transparency in Megaproject Execution”
Mosaic, “Simple Guide to Business Budget Analysis With Examples”
U.S. Bureau of Labor Statistics, Budget Analysts
