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Academic Library System

Notes Librarians all over the world use this unique identifier in the process of cataloging most books
which have been published in the United States. It helps them reach the correct cataloging
data (known as a cataloging record), which the Library of Congress and third parties make
available on the Web and through other media.

13.1 Budgetary and Non Budgetary Devices

(a) Budget:
• A formal statement of the financial resources set aside for carrying out specific activities
in a given period of time.
• It helps to co-ordinate the activities of the organisation.

An example would be an advertising budget or sales force budget.
(b) Budgetary control:
• A control technique whereby actual results are compared with budgets.
• Any differences (variances) are made the responsibility of key individuals who can
either exercise control action or revise the original budgets.
Budgetary control and responsibility centres;

These enable managers to monitor organisational functions.

Notes A responsibility centre can be defined as any functional unit headed by a manager
who is responsible for the activities of that unit.

There are four types of responsibility centres:
(a) Revenue centres: Organisational units in which outputs are measured in monetary terms
but are not directly compared to input costs.
(b) Expense centres: Units where inputs are measured in monetary terms but outputs are
not.
(c) Profit centres: Where performance is measured by the difference between revenues (outputs)
and expenditure (inputs). Inter-departmental sales are often made using “transfer prices”.
(d) Investment centres: Where outputs are compared with the assets employed in producing
them, i.e., ROI.

13.1.1 Advantages of Budgeting and Budgetary Control

There are a number of advantages to budgeting and budgetary control:
• 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
(ideally) each manager, to anticipate and give the organisation purpose and direction.
• Promotes coordination and communication.
• Clearly defines areas of responsibility. Requires managers of budget centres to be made
responsible for the achievement of budget targets for the operations under their personal
control.

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