Questions and Answers
What is the primary purpose of breaking down an organisation into various responsibility centres?
What is the basis of measuring performance in a budgetary control system?
What is the purpose of a performance indicator in a budgetary control system?
What is the purpose of continuous performance evaluation in a budgetary control system?
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What type of budgetary control ensures that the fund is properly kept and used in the right way?
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What is the purpose of Expenditure Control?
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What is the purpose of Cost Control in a budgetary control system?
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What is the purpose of Cash Control in a budgetary control system?
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What is the primary objective of budgetary control?
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Who is responsible for the national budgetary control?
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What is the role of the Chief Operating Officer (CO) in budgetary control?
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What is the purpose of budgetary control in an organisation?
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What is the first requirement of a good system of budgetary control?
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What is compared in budgetary control?
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What is the purpose of reporting in budgetary control?
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What is the relationship between appropriation and control in budgetary control?
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What is the primary objective of reviewing ministries' proposals every two years?
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What is one of the benefits of the new budget examination and review system?
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What is the typical timeline for the preparation and submission of new year estimates?
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Who is responsible for issuing the Warrant for expenditure at the end of December?
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What is the acronym for the budgeting technique that focuses on the outputs and outcomes of government programs?
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What is the purpose of the Budget Hearing from May to July?
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What is one of the benefits of the new budget examination and review system in terms of resource allocation?
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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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Description
Test your knowledge on budgetary control systems, responsibility centres, and performance measurement in organizations.