Budgeting and financing

1. BUDGETING
&
FINANCING
BY: PRUEBAS & PEREZ

2. Overview
DEFINITION OF:
BUDGET
BUDGETING
ACCOUNTING
RECORDING
AUDITING
TYPES OF BUDGET
COST BENEFIT ANALYSIS
BUDGET-MAKING PROCESS
CHART OF ACCOUNT
OTHERS FACTORS OF
BUDGETING
FACTORS OF AN
IDEAL BUDGET
FINANCING
FINANCIAL RECORD
AND CONTROL

3. BUDGET
-BUDGET IS A FINANCIAL PLAN WHETHER FOR AN AGENCY OR A
PROGRAM.
-ACCORDING TO MELVIN GROSS, "A BUDGET IS A PLAN OF ACTION. IT
REPRESENTS THE ORGANIZATION'S BLUE PRINT FOR THE COMING
MONTHS OR YEARS EXPRESSED IN MONETARY TERMS." HE FURTHER ADDS
THAT A "BUDGET MAY BE CHARACTERIZED AS A SERIES OF GOALS WITH
PRICE TAGS ATTACHED."
BUDGETING
-ACT OF PREPARING A BUDGET.
1. SECURING OF FUNDS;
2. USING FUNDS IN ACCORDANCE WITH THE OBJECTIVES OF THE
ORGANIZATION AND;
3. MAINTAINING APPROPRIATE RECORDS OF FINANCIAL
TRANSACTIONS.

4. ACCOUNTING
-ACCOUNTING IS THE ART OF RECORDING, CLASSIFYING, AND
SUMMARIZING IN A SIGNIFICANT MANNER AND IN TERMS OF MONEY
TRANSACTIONS OR EVENTS.
RECORDING
-RECORDING INCLUDES MAKING ENTRIES; CLASSIFYING INCLUDES
SORTING MASS OF TRANSACTIONS IN AN ORDERLY AND SYSTEMATIC
MANNER.
-REFERS TO A SYSTEMATIC EXAMINATION OF BOOKS, ACCOUNTS,
DOCUMENTS, AND VOUCHERS OF AN ORGANIZATION TO
ASCERTAIN HOW FAR THE FINANCIAL STATEMENT PRESENT A
TRUE AND FAIR VIEW OF THE CONCERN.
AUDITING

5. Program Budgeting
Line-item Budgeting
it indicates how the money
is to be spent, but it does
not depict what the agency
does.
Easy to justify the
expenditures
Straightforward, simple to
administer and readily
understood.
TYPES OF
BUDGET
Goals and Objectives are
significant.
Calculate program cost over
the long run
Prepare multi-year program
and financial plans.
Analyze the cost and benefits
of alternative program
design.
Ex. Program Planning and
Budgeting System.
-Offer logical, objective
approach and clear linkage
between planning and
budgeting

6. Zero-based Budgeting
Functional Budgeting
Functional budgets address
spending and revenue for a
particular function -- such as
a department or process --
within a business.
Examples of functional
budgets include budgets for
functions such as
production, sales, business
development and materials
purchasing.
TYPES OF
BUDGET
an operating, planning and
budgeting method which
requires every agency
manager to justify his entire
budget systems in detail
and transfers the burden of
proof to each manager why
he should spend any
money;
yearly analysis, evaluation
and justification of each
activity, program or project
starting from a "zero"
performance level; a budget
based on need not want

7. COST BENEFIT ANALYSIS
LEVINE SAYS THAT COST-BENEFIT
MEANS "THE RELATIONSHIP OF THE
RESOURCES REQUIRED OR THE COST-TO
ATTAIN CERTAIN GOALS OR THE
BENEFITS."
THE BUDGET MAKING
PROCESS
SETTING
COLLECTING AND STUDYING
LOOKING
DECIDING
FINALIZING
PROVIDING

8. FINANCING
•Financing may be defined as the allocation of an
organization /agency’s liquid assets to assure their
most productive use.
Funds required by government agencies come from the
taxes of the people:
•Free for services
•Membership dues
•Investment earnings
•Use of capital sources
•Sale of goods and publications; other grassroots
fundraising efforts
•Tax funds or government grants
•Grants or contact for services
•Donor contributions

9. Financial Record
•Financial record is an ongoing record of what
the agency has spent on what and how well it is
staying within its budget.
Financial Control
•Financial control is most agencies a set of
procedures is allowed in addition to keeping a
ledger book on expenses.