Budget monitoring and costing guide
This guide provides information on budget monitoring, and introduces the costing tool for new programmes.
Budget monitoring procedures
If you have a general financial query you should contact your faculty accountant or financial contact
Budget monitoring reports
Each month, the MIS produce a summary budget monitoring report, which compares, for each budget, the actual expenditure (or income) to the end of the period with the phased budget. The budget phasing represents the pattern of expenditure (or income) over the 12 periods and may be calculated on different bases. Pay expenditure is spread evenly over the year. Non pay expenditure (or income) initially is phased on the pattern of expenditure over the previous year. However, since the phasing may differ between years budget holders may change the phasing at any time during the year.
Reporting on budget variances
The summary circulated by MIS will contain some highlighted variances where an explanation of the variance is required. The aim of the monitoring is not to create a great deal of work, it is to ensure budget holders are looking at their budgets, can explain variances and confirm that they are going to stay within their budget. With the summary, an explanation of major variations form is circulated. The form has a number of boxes that have to be completed.
Explanation of variance
For pay variances budget holders may need to talk to their Faculty Accountant who will have access to the salary costing database and a breakdown of the budget.
For non-pay variances budget holders should use the Agresso reports which are produced at month end.
Remedial action required
Budget holders should enter what action they are going to take. This may be to re-phase the budget or journal expenditure to another code. Budget holders should try to do this before the next period so the same explanation is not required.
Effect over a full year
It is important budget holder consider what the impact of any variance will have on the budget for the year. Where an overspend is forecast it is important that this is quantified and reported so that the estimates may be updated if necessary. Note even where variances are not highlighted if budget holders anticipate an overspend they should report this on the form.
Programme costing tool
A prospective costing tool has been developed by the Management Accounting Team to be used to support new course proposals.
Please contact your faculty accountant for support in applying the tool to existing programmes.