Series 1 – Insight 02
Budget monitoring is not a tick box exercise.
Most organisations produce budget monitoring reports of one kind or another. They may be directly from the accounting system or prepared on a spreadsheet. The reports should be designed to assist users and hence tailored to suit organisational needs.
Regular budget monitoring should be fundamental to the role of any staff member with budget responsibilities. Budget monitoring actions are important routines and include:
- Checking reports are complete and up to date (transactions processed accurately)
- Checking all budget changes (virements) have been made
- Understanding the budget profiles – even if not reflected on the report
- Variance analysis – by value and percentage
- Understanding budget drivers and reasons for variance
- Projecting outturns
- Progressing to budget management and control actions
Training in each of the above will enhance budget monitoring and yield better results.
Ultimately budgets need to be monitored to ensure the financial resources used are delivering the organisation’s objectives. If not, action needs to be taken.
Managing the Devolved Budget is an easy read and provides even more insight.
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