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Budget Control Essay

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Below is an essay on "Budget Control" from Anti Essays, your source for research papers, essays, and term paper examples.

BUDGET CONTROL
Introduction
Budget control can be defined as "A modern mechanism which is used for cost-effective and cost saving utilisation of resources in the attainment of the set objectives of the organisation, the resources being labour, land, skill and time".
A budget is a method of quantifying expected achievements and laying down criteria for systematic control. It is utilised to include planning and control into one financial packet.
The limits to budgets must be set, but this does not imply that budgets should be used as a weapon against the heads of departments. The budget is not an end in itself, and it must be regarded as a means of attaining a goal.
There is a further definition of a budget, this is:
The reduction of working plans to units of space, time, money or production, in order to project the anticipated costing and expenditure of the units".
A budget must meet three requirements:
  i. Productivity must be addressed
  ii. Only those projects which are viable should be included
  iii. Budgeting must be cost-effective and cost saving as possible.
There are many factors which can impede budget control, the most important of these are shown below:
  i. The unwillingness of the security manager to exercise proper control over budgets.
 
  ii. Unacceptable criteria which are set by management. This may be because:
  * The standards are set unattainably high
  * The quantitative standards are abstract or too involved
  * The quantitative is over-emphasised at the expense of the qualitative
  * Contradictory standards are set at the same time.
  * The only criterion is the attainment of short-term objectives, the long-term is neglected
  * The standard have remained static. There have been no improvements or adaptions
  * Too much control is exercised.
  iii. Non co-operation by the staff. This may be because of:
  * The resistance of staff to monitoring of activities.
 
  * A declining confidence by the staff...

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