It appears that most of us agree that at the end of the fiscal year a large amount of money is wasted in order to keep the previous years budget. My suggestion is to allow the excess funds to be saved and reduce the budgets by a small amount accross the board. Allowing the funds to be saved while reducing the budgets across the board will end wasteful spending year round.
Managers should be given a percentage bonus of any money given back to the treasury. This should be at higher percentages at the lowest levels management, and lower percentages at higher levels.