ACCA MA Syllabus D. Budgeting - Administrative procedures - Notes ^{3 / 4}

In organising and administering a budget system the following characteristics may apply:

• a) Budget centres:

  Units responsible for the preparation of budgets. A budget centre may encompass several cost centres.

• b) Budget committee:

  This may consist of senior members of the organisation, e.g. departmental heads and executives (with the managing director as chairman). Every part of the organisation should be represented on the committee, so there should be a representative from sales, production, marketing and so on. Functions of the budget committee include:

  • Coordination of the preparation of budgets, including the issue of a manual

  • Issuing of timetables for preparation of budgets

  • Provision of information to assist budget preparations

  • Comparison of actual results with budget and investigation of variances

• c) Budget Officer :

  Controls the budget administration The job involves:

  • liaising between the budget committee and managers responsible for budget preparation

  • dealing with budgetary control problems

  • ensuring that deadlines are met

  • educating people about budgetary control.

• d) Budget manual:

  This document, which is usually prepared by the management accountant:

  • charts the organisation

  • details the budget procedures

  • contains account codes for items of expenditure and revenue

  • timetables the process

  • clearly defines the responsibility of persons involved in the budgeting system.