6/24/09

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



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