Page 141 - DLIS406_ACADEMIC_LIBRARY_SYSTEM

Academic Library System

Notes 13.1.4 Budget Organisation and Administration

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:
• 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.

13.1.5 Budget Preparation

Firstly, determine the principal budget factor. This is also known as the key budget factor or
limiting budget factor and is the factor which will limit the activities of an undertaking. This
limits output, e.g. sales, material or labour.
(a) Sales budget: this involves a realistic sales forecast. This is prepared in units of each
product and also in sales value. Methods of sales forecasting include:
• sales force opinions
• market research
• statistical methods (correlation analysis and examination of trends)

• mathematical models.
In using these techniques consider:
• company’s pricing policy

• general economic and political conditions

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