budgeting and the budget process

8/6/2019 Budgeting and the Budget Process

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Budgeting and The

Budget ProcessReported by:

Arlene Y. Daniel andRochelle M.

Crisostomo

Professorial Lecturer:

Clarisa N. Mariano, CPA


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What is a Budget? Budget can be defined as an itemized forecast of

an individual's or company's income and

expenses which is expected for a certain period

time in the future. Through budgeting, we are

able to carefully look at how much money is

being consumed during a given period, and

figure out the best way to divide it among other

varieties of categories.


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Different Kinds of Budget Survival Budget- Minimum required in order for the organization or

project to survive and do useful work.

Guaranteed Budget- Based on the income guaranteed at the time the

budget was planned.

Optimal Budget

- It covers what you would like to do if you can raiseadditional money.


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Different Techniques in Budgeting

Increment Budget

- Figures are based from the actual expenditure from

the previous year.

- The lazy way and often inaccurate. Zero- Based Budget

- The budgeting process starts from scratch with the

proposed activities for the year.

- More detailed and accurate- Proactive in taking in new challenges.


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1. Knowledge of the present state of the institution.

2. Situation analysis

3. Completion of budget statement.4. Preparation of financial projection.

Steps in Budget Preparation


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a. Salaries of personnelb. travel expenses

c. Communication services

d. Supplies and Materialse. Staff development


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a. Improving faculty qualifications.

b. Student remediation programs for specialized

groups

c. Physical development of the institution

d. Involvement of the institution in quality

enhancement programs toward world class

quality.


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1. Consultation with relevant and involved office.

2. Involvement of personnel at the preparation stage of

the budget.

3. Understanding for smooth adjustment that have to be

instituted to cope with the unforeseen circumstances

4. Commendation


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1. Consultation with relevant and involved

office.

2. Involvement of personnel at the preparation

stage of the budget.

3. Understanding for smooth adjustment that

have to be instituted to cope with theunforeseen circumstances

4. Commendation


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In the organization, the Executive Vice President or Vice President forAdministration or finance is the head of the budget. The members are all the deans

and heads of the office must:

a. Prepare their own plan consistent with the defined goals and

objectives of the institution.

b. Know the revenues generated as shown by the present enrollment

level and the expected trend in enrollment.

c. Familiar with the academic complement and support staff of each

college.d. Know the revenue generating capacity of the department

e. Know the duties and responsibilities of the department and the

corresponding manpower and complement with its carefully defined

job description


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- Involves the collection and analysis of data about budget activities.

- It allows budget operators to keep track of budget activities to determined

whether budget objectives are being achieved and to make whatever

changes that are necessary to improve budget performance.

- The purpose is to ensure the efficient and effective program/project

implementation.

- Provide timely information on the work plan and done to all the parties

concerned


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- The school may realize extra funding during the year leading to

a larger surplus than expected, in which case the school may

wish to meet some request for additional funding that had

previously been put on hold.

- Unexpected expenditure may occur like building works in the

summer may overrun budget, or additional members of

staff maybe required.

- There may be a shortfall in expected income, such as lettings

or bank interest.


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1.

Indicates what will be done.

The work plan should provide:

a. The outputs and activities described in a schedule

sequence in relation to each immediate objective

b. Their planned starting and completion dates.

c. The person, organization and /or institution responsible

for carrying out the work.

2.

Examines work actually carried out.


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1. Compels management to think about the future, which is probably the most

important feature of a budgetary planning and control system. Forces

management to look ahead to set out detailed plans for achieving the targets for

each department, operation and each manager, to anticipate and give the

organization purpose and direction.

2. Promotes coordination and communication.

3. Clearly defines areas of responsibility. Requires managers of budget centers to

be made Responsible for the achievement of budget targets for the operation

under their personal control.


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4. Provides a basis for performance appraisal. A budget is basically

a yardstick against which actual performance is measured and

assessed.

5. Enables remedial action to be taken as variances emerge.

6. Motivates employees by participating in the setting of budgets.

7. Improves the allocation of scarce resources.

8. Economizes management time by using the management by

exception principle.


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Indicators for Budget Preparation

1.Realization of Goals and Objectives

1.The head should submit the result of the disbursement

with commentary that the activity was satisfactory to the

clientele.

2.There should be demonstration of linkage of the

performance to the institutions mission, goals and

objectives.

3. Achievements are good implementation of the budget

because they were achieved despite limited resources.


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Effective Evaluation and Merit System

For Instruction:

Number or students served.

Number or graduates who did quitewell in the field of work.

High percentage of graduates who pass

the board exam.


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For Institutions and Members of Faculty

Student contact hours. Participation as thesis adviser or attendance in thesis-

dissertation committees.

Additional duties and responsibilities as committee

head or head of a department.

Quality of Instruction through student achievement

level, departmentalize examination.

Research function : publications, amount of grants forresearch, presentation of papers in regional, national

and international conferences.


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The Budget ProcessConceptual Paradigm- Budget in Public Education Sector


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The Budget ProcessConceptual Paradigm- Budget in Private Education Sector


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Generalization

The budget forces us to be rigorous in thinking

through the implications of our activity planning. If

used properly, it can help us achieve our planned

activities, goals and objectives smoothly. It is alsoimportant to monitoring the budget so that we are

more informed about the financial performance of

the institution or company and its projects. This will

help us make important decisions for the benefit ofour school, stakeholders/clientele and the children.


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Thank You For Listening !

budgeting and the budget process

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