Budgeting and The Budget Process

Budgeting and The
Budget Process
Reported by:
Arlene Y. Daniel and
Rochelle M.
Crisostomo
Professorial Lecturer:
Clarisa N. Mariano, CPA
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.
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 raise
additional money.
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.
Steps in Budget Preparation
1. Knowledge of the present state of the institution.
2. Situation analysis
3. Completion of budget statement.
4. Preparation of financial projection.
a. Salaries of personnel
b. travel expenses
c. Communication services
d. Supplies and Materials
e. Staff development

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.
•
•
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
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
In the organization, the Executive Vice President or Vice President for Administration 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
•
- 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
- 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.

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.
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.

•
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 institution’s mission, goals and
objectives.
3. Achievements are good implementation of the budget

because they were achieved despite limited resources.

Effective Evaluation and Merit System
For Instruction:
• Number or students served.

• Number or graduates who did quite
well in the field of work.
• High percentage of graduates who pass
the board exam.
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 for
research, presentation of papers in regional, national
and international conferences.
The Budget Process
Conceptual Paradigm- Budget in Public Education Sector
The Budget Process
Conceptual Paradigm- Budget in Private Education Sector
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 also
important 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 of
our school, stakeholders/clientele and the children.
Thank You For Listening !

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Budgeting and The

- Unexpected expenditure may occur like building works in the

1.The head should submit the result of the disbursement

2.There should be demonstration of linkage of the

3. Achievements are good implementation of the budget

• Number or students served.

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