Budget analysts help organizations allocate their financial resources. They develop, analyze, and execute budgets, as well as estimate future financial needs for private businesses, nonprofit organizations, and government agencies. In private sector firms, a budget analyst's main responsibility is to examine the budget and seek new ways to improve efficiency and increase profits. In nonprofit and governmental organizations, which usually are not concerned with profits, analysts try to find the most efficient way to distribute funds and other resources among various departments and programs.
In addition to managing an organization's budget, analysts are often involved in program performance evaluation, policy analysis, and the drafting of budget-related legislation. At times, they also conduct training sessions for company or government personnel regarding new budget procedures.
At the beginning of each budget cycle, managers and department heads submit operational and financial proposals to budget analysts for review. These plans outline the organization's programs, estimate the financial needs of these programs, and propose funding initiatives to meet those needs. Analysts then examine these budget estimates and proposals for completeness, accuracy, and conformance with established procedures, regulations, and organizational objectives. Sometimes they employ cost-benefit analyses to review financial requests, assess program tradeoffs, and explore alternative funding methods. They also examine past budgets and research economic and financial developments that affect the organization's income and expenditures.
After the initial review process, budget analysts consolidate individual departmental budgets into operating and capital budget summaries. These summaries contain statements that argue for or against funding requests. Budget summaries are then submitted to senior management, or as is often the case in government organizations, to appointed or elected officials. Budget analysts then help the chief operating officer, agency head, or other top managers analyze the proposed plan and devise possible alternatives if the projected results are unsatisfactory. The final decision to approve the budget usually is made by the organization head in a private firm, or by elected officials, such as State legislators, in government.
Throughout the year, analysts periodically monitor the budget by reviewing reports and accounting records to determine if allocated funds have been spent as specified. If deviations appear between the approved budget and actual spending, budget analysts may write a report explaining the variations and recommending revised procedures. To avoid or alleviate deficits, budget analysts may recommend program cuts or a reallocation of excess funds. They also inform program managers and others within the organization of the status and availability of funds in different accounts.
Data and statistical analysis software has greatly increased the amount of data and information that budget analysts can compile, review, and produce. Analysts use spreadsheet, database, and financial analysis software to improve their understanding of different budgeting options and to provide accurate, up-to-date information to agency leaders. In addition, many organizations are beginning to incorporate Enterprise Resource Planning (ERP) programs into their budget-making process. ERP programs can consolidate all of an organization’s operating information into a single computer system, which helps analysts estimate the effects that a budget alteration will have on each part of an organization.
Work Environment
Budget analysts held about 52,500 jobs in 2020. The largest employers of budget analysts were as follows:
- Federal government - 24%
- Educational services; state, local, and private - 12%
- Professional, scientific, and technical services - 11%
- Local government, excluding education and hospitals - 11%
- State government, excluding education and hospitals - 11%
Although budget analysts usually work in offices, they may travel to get budget details firsthand or to verify funding allocations.
Work Schedules
Most budget analysts work full time, and overtime is sometimes required during development, mid-year, and final reviews of budgets. The pressures of deadlines and tight work schedules may be stressful.
Education & Training Required
Employers generally require budget analysts to have at least a bachelor's degree, but some prefer or require a master's degree. Within the Federal Government, a bachelor's degree in any field is sufficient for an entry-level budget analyst position. State and local governments have varying requirements, but usually require a bachelor's degree in one of many areas, including accounting, finance, business, public administration, economics, statistics, political science, or sociology. Because developing a budget requires strong numerical and analytical skills, courses in statistics or accounting are helpful, regardless of the prospective budget analyst's major field of study. Some States may require a master's degree. Occasionally, budget-related or finance-related work experience can be substituted for formal education.
In most organizations, budget analysts usually learn the job by working through one complete budget cycle. During the cycle, which typically lasts 1 year, analysts become familiar with the various steps involved in the budgeting process. Many budget analysts also take professional development classes throughout their careers.
Other Skills Required
Budget analysts must abide by strict ethical standards. Integrity, objectivity, and confidentiality are all essential when dealing with financial information, and budget analysts must avoid any personal conflicts of interest. Most budget analysts also need mathematical skills and should be able to use software packages, including spreadsheet, database, data-mining, and financial analysis programs. Strong oral and written communication skills also are essential, because budget analysts must prepare, present, and defend budget proposals to decision makers. In addition, budget analysts must be able to work under strict time constraints.
How to Advance
Entry-level budget analysts usually begin with limited responsibilities, working under close supervision. Capable analysts can be promoted to intermediate-level positions within 1 to 2 years, and to senior positions with additional experience. Because of the importance and high visibility of their jobs, senior budget analysts may be promoted to management positions in various parts of their organizations, or with other organizations with which they have worked.
Government budget analysts employed at the Federal, State, or local level may earn the Certified Government Financial Manager designation granted by Advancing Government Accountability, an organization that represents government accountability officers. To earn this designation, candidates must have a minimum of a bachelor's degree, 24 credit hours of study in financial management, and 2 years of professional-level experience in governmental financial management. They also must pass a series of three exams that cover topics on the governmental environment; governmental accounting, financial reporting, and budgeting; and governmental financial management and control. To maintain the designation, individuals must complete 80 hours of continuing professional education every 2 years.
Job Outlook
Employment of budget analysts is projected to grow 5 percent from 2020 to 2030, slower than the average for all occupations.
Despite limited employment growth, about 4,300 openings for budget analysts are projected each year, on average, over the decade. Most of those openings are expected to result from the need to replace workers who transfer to different occupations or exit the labor force, such as to retire.
Employment
Demand for efficient use of public funds will lead to continued demand for budget analysts. Although many states are facing budget shortfalls, employment of these workers should remain steady. Because budget analysts manage resource allocation, the need for these workers remains even during times of tight budgets.
Earnings
The median annual wage for budget analysts was $79,940 in May 2021. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $49,330, and the highest 10 percent earned more than $124,440.
In May 2021, the median annual wages for budget analysts in the top industries in which they worked were as follows:
- Professional, scientific, and technical services - $98,030
- Federal government - $87,190
- State government, excluding education and hospitals - $79,270
- Local government, excluding education and hospitals - $77,320
- Educational services; state, local, and private - $63,890
Most budget analysts work full time, and overtime is sometimes required during development, mid-year, and final reviews of budgets. The pressures of deadlines and tight work schedules may be stressful.
