Role Of Budget Committee And Purpose Of A Budget Manual

Part A of this article look at the roles of a Budget Committee and Part B on the purpose of a Budget Manual.

Part A: Roles/objectives of a Budget Committee:

• Reconciles differences of opinion between departmental managers;
• Resolves disputes between managers;
• Give advice to board of directors and chief executive;
• Reviews department budgets and making recommendations;
• Examines periodic reports showing actual performance compared with the budget Significant variances are identified and recommendation made on actions to be taken;
• Develop and examines long term plans;
• Identifies budget objectives;
• Creates a better understanding and awareness among managers of the role of each others deparment;
• Coordination of budgets or budgeting;
• Review external conditions such as economic conditions for the ensuing period; and
• Considers forecasts compiled by departmental managers.

Part B: Roles/Functions Of Setting Up Budget Manual:

The budget manual documents the administration of budgeting. It contains the purpose of, procedure for and responsibility of the people involved in budgeting.

Others details includes:

• The objectives of the business and the part which budgetary control plays in achieving these objectives;
• The procedures to be adopted in operating the budgetary control system;
• The responsibilities and duties of those connected with the preparation of the budgets;
• The reports and statements required for each budget period;
• The functions of the budget committee and
  
• The accounts classification to be used