Journal article
Spending Patterns with Lapsing Budgets: Evidence from U.S. Army Hospitals
Journal of management accounting research, Vol.19(1), pp.1-23
01/01/2007
DOI: 10.2308/jmar.2007.19.1.1
Abstract
We explore how the practice of reverting unused funds (budget lapsing) affects intra- and inter-year spending patterns. Data from 31 army hospitals over a period of five years provide strong support for a saving-dissaving model. Hospital administrators appear to stockpile pharmaceuticals and other supplies toward the end of a fiscal year, leading to a significant spike in spending that potentially exhausts their budget. Interestingly, data show a decline at the start of the next fiscal year that is larger than the preceding spike, indicating that mangers build a reserve for later use. The magnitude of the reserve accumulated at the start of a year is reliably persistent across years and accelerates the upward trend in spending through the year. That is, managers increasingly expend the reserve as environmental uncertainty decreases.We conclude that risk-aversion plays a significant role in determining intra-year trends.
Details
- Title: Subtitle
- Spending Patterns with Lapsing Budgets: Evidence from U.S. Army Hospitals
- Creators
- Ramji Balakrishnan - University of IowaNaomi S. Soderstrom - UNIVERSITY OF COLORADO AT BOULDERTimothy D. West - University of Arkansas at Fayetteville
- Resource Type
- Journal article
- Publication Details
- Journal of management accounting research, Vol.19(1), pp.1-23
- DOI
- 10.2308/jmar.2007.19.1.1
- ISSN
- 1049-2127
- eISSN
- 1558-8033
- Language
- English
- Date published
- 01/01/2007
- Academic Unit
- Accounting
- Record Identifier
- 9984380612602771
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