Podcast
Questions and Answers
What is the primary purpose of breaking down an organisation into various responsibility centres?
What is the primary purpose of breaking down an organisation into various responsibility centres?
- To reduce administrative costs
- To delegate authority to employees
- To carry out identified activities and formulate a comprehensive budget (correct)
- To measure employee performance
What is the basis of measuring performance in a budgetary control system?
What is the basis of measuring performance in a budgetary control system?
- Managerial discretion
- Financial statements only
- Industry benchmarks
- Objectives, output and outcomes of the organization (correct)
What is the purpose of a performance indicator in a budgetary control system?
What is the purpose of a performance indicator in a budgetary control system?
- To evaluate employee performance
- To monitor and evaluate the performance and progress of each responsibility centre (correct)
- To forecast revenue
- To determine the budget allocation
What is the purpose of continuous performance evaluation in a budgetary control system?
What is the purpose of continuous performance evaluation in a budgetary control system?
What type of budgetary control ensures that the fund is properly kept and used in the right way?
What type of budgetary control ensures that the fund is properly kept and used in the right way?
What is the purpose of Expenditure Control?
What is the purpose of Expenditure Control?
What is the purpose of Cost Control in a budgetary control system?
What is the purpose of Cost Control in a budgetary control system?
What is the purpose of Cash Control in a budgetary control system?
What is the purpose of Cash Control in a budgetary control system?
What is the primary objective of budgetary control?
What is the primary objective of budgetary control?
Who is responsible for the national budgetary control?
Who is responsible for the national budgetary control?
What is the role of the Chief Operating Officer (CO) in budgetary control?
What is the role of the Chief Operating Officer (CO) in budgetary control?
What is the purpose of budgetary control in an organisation?
What is the purpose of budgetary control in an organisation?
What is the first requirement of a good system of budgetary control?
What is the first requirement of a good system of budgetary control?
What is compared in budgetary control?
What is compared in budgetary control?
What is the purpose of reporting in budgetary control?
What is the purpose of reporting in budgetary control?
What is the relationship between appropriation and control in budgetary control?
What is the relationship between appropriation and control in budgetary control?
What is the primary objective of reviewing ministries' proposals every two years?
What is the primary objective of reviewing ministries' proposals every two years?
What is one of the benefits of the new budget examination and review system?
What is one of the benefits of the new budget examination and review system?
What is the typical timeline for the preparation and submission of new year estimates?
What is the typical timeline for the preparation and submission of new year estimates?
Who is responsible for issuing the Warrant for expenditure at the end of December?
Who is responsible for issuing the Warrant for expenditure at the end of December?
What is the acronym for the budgeting technique that focuses on the outputs and outcomes of government programs?
What is the acronym for the budgeting technique that focuses on the outputs and outcomes of government programs?
What is the purpose of the Budget Hearing from May to July?
What is the purpose of the Budget Hearing from May to July?
What is one of the benefits of the new budget examination and review system in terms of resource allocation?
What is one of the benefits of the new budget examination and review system in terms of resource allocation?
What is the purpose of the BRO individual study in March?
What is the purpose of the BRO individual study in March?
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Study Notes
Features of Budgetary Control System
- Organisations are broken down into responsibility centres, where each centre carries out identified activities and formulates a comprehensive budget.
- Objectives, output, and outcomes of the organisation are used as bases of measuring performance.
- A performance indicator is developed to monitor and evaluate the performance and progress of each responsibility centre.
- Continuous performance evaluation is carried out to determine the performance of the organisation in comparison with the budget.
Types of Budgetary Control
- Fund Control: ensures funds are properly kept and used in the right way.
- Revenue Control: ensures revenue collection from proper sources, monitors collections, and accounts for them properly.
- Expenditure Control: ensures spending is done for agreed purposes, also known as Vote Control, exercised by the accounting officer.
- Cost Control: ensures total cost incurred for an activity is within the right valuation.
- Cash Control: ensures spending plans are made based on approved vouchers, with cash forecasts to avoid overspending.
Budgetary Control Process
- Establishes a budgeting system to formulate financial action plans for an organisation's operations.
- Directs finances to achieve desired actions specified in the budget.
- Compares actual results with budgets.
- The budgetary control process lies with the head or CO of organisations, who ensure expenditure is within planned budgets.
Rationale for Changes in Budget Examination and Reviews
- Helps increase quality and efficiency of budget allocations.
- Allows consideration of both short-term fiscal policies and medium-term objectives and policies.
- Facilitates assessment of the fiscal position of the government, leading to improvement in government cash flow planning and management.
- Enables accurate determination of government borrowing programmes in advance.
Budgetary Control Techniques
- TBS (Traditional Budgeting System)
- PPBS (Planning-Programming-Budgeting System)
- MBS (Management by Objectives System)
- OBB (Output-Based Budgeting)
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