Don't Go Alone: Pooling Budgetary Risk to Save Money in Your Budget
Local governments often join together to pool risk for insurance. Governments can also save money by pooling budgetary risks across departments. Departments essentially build “insurance” into their budget to account for the possibility of unavoidable and unplanned spending. Some might call this “leeway,” or others might call it “padding” or “slack”—but no matter what you call it, it can really add up across all departments.
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