![]() ![]() if goods and services have been ordered but not yet received. The budget holder will also need to know if any part of their budget has been “committed” – i.e. They will need to know how current the information is and adjust it for any outstanding transactions. To establish the actual position, the budget holder will need to examine and understand the financial information available. The style and content of the report will vary from one organisation to another and will be dependent on the financial system used. This information is normally provided in the financial management report. This enables budget holders to identify their actual budget position at any point in time. Income and expenditure is then recorded against the budget code. ![]() Depending on the system, budgets will be identified by some form of budget code. The process of controlling budgets can be broken down into several steps:Īll organisations have some form of an accounting system which records their income and expenditure. The budgetary control process ensures funds are being utilised in accordance with the required level and quality of output from the allocated resources. Taking the necessary action, based on the monitoring results, to ensure the budget remains within control. The two can be broadly distinguished as follows:Ĭhecking accuracy of actual income and expenditure reported comparing “actuals” with budgets calculating variances identifying trends highlighting any variations to the budget owner Although the difference between monitoring and managing budgets is not clearly defined, there are certain characteristics that set them apart. To ensure effective budgetary control, budgets must be effectively monitored and managed. The 5 Step Budgetary Control Process hbpublications | JThe 5 Step Budgetary Control Process
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