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LESSON 17budgeting and Financing

The document discusses budgeting, accounting, auditing, and different types of budgets such as line-item, program, functional, and zero-based budgets. It also covers the budget-making process and factors of an ideal budget. Finally, it discusses financing sources for agencies and the importance of understanding financial records, controls, and budget preparation for social workers.

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Joy Querubin
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49 views13 pages

LESSON 17budgeting and Financing

The document discusses budgeting, accounting, auditing, and different types of budgets such as line-item, program, functional, and zero-based budgets. It also covers the budget-making process and factors of an ideal budget. Finally, it discusses financing sources for agencies and the importance of understanding financial records, controls, and budget preparation for social workers.

Uploaded by

Joy Querubin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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G R OU P

12

LESSON 17

Budgeting and Financing


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 blueprint for
the coming months or years expressed in monetary
terms.
BUDGETING – is one of the areas of financial
administration with which an administrator must be
concerned if he is to run the organization efficiently.
The main areas in financial administration are:
1. Securing of funds or income;

2. Using the funds in accordance with the objectives of the


organization or budgeting; and

3. Maintaining appropriate records of financial transactions


or accounting and also auditing.
ACCOUNTING - is the art of recording, classifying, and
sumarizing in a significant manner and in terms of
money transactions or event which are in part of a
financial character and analyzing and interpreting the
results thereof.

RECORDING - includes making entries; classifying includes


sorting mass of transactions in an orderly and systematic
manner; summarizing means bringing together of accounting
data in a form that further enhances this information.
AUDITING - is the state of making an audit or an examination of some
or all of the following: documents, records, reports, system of manual
control, accounting procedures, and other evidences for one or more
of the following purposes:
1. To determine the propriety, legality, and mathematical
accuracy of purposed or consummated transaction;
2. To ascertain whether all transactions have been recorded;
and
3. To determine whether transactions are accurately
reflected in the accounts and in the statements drawn,
therefore, in accordance with the accepted accounting
procedures.
TYPES OF BUDGET
1. Line-item budgeting - this is the most used format. This
format is based on line-item accounting and incremental
increases in projecting ahead for a year or more. It indicates
how the money is to be spent, but it does not depict what the
agency goals, targets, or results. Its main feature is its reliance
on explicit categories of expenditures to insure justification.

2. Program budgeting - goals and objectives are a significant


part and include services offered by the agency. It may cover
several years, particularly as a program is offered and approved
for a specific for each program.
TYPES OF BUDGET
3. Functional budgeting - this system encompasses program
services but emphasizes the supporting administrative services that
are needed for operating an agency. Revenues and expenditures as
they relate to management and general functions, fund-raising
functions, and identifianle programs offered by the agency are all
listed.

4. Zero-based budgeting - this is done particularly in government


agencies. Here the agency starts with no oney each year and
describes and justifies all expenditures for the coming year, whether
or not they have existed before.
THE BUDGET-MAKING PROCESS
1. Setting the specific needs and goals of the agency. It is important to review the basic policies
and procedures of the agency, the goals and objectives ought to be observable and
measurable.

2. Collectingand studyingbasic information regarding the current and past operations of the
agency, including what has and has not been accomplished.
3. Looking at alternatives and different ways of using the money that may be available during
the year.

4. Deciding on prioritie for the agency. Look at the agency policies and goals to see which are
most financially compatible with the agency.

5. Finalizing decisions regarding the budget. The needs and potentials of the agency as a whole
and of the individuals who work there should be considered. Also, the welfare of clients, along
with the efficiency of the agency's operation, is important matters to consider.

6. Providing adequate interpretation and public relations. The administrator should interpret the
budget to those in position of power so they will fully understand the reason s for specific
FACTORS OF AN IDEAL
BUDGET

1. It is comprehensive - it includes all planned


expenditures and all estimated income.
2. It is clear ans easily understood.
3. It is flexible.
4.Itis workable.
5. It isaccurate andrealistic.
FINANCING - may be defined as the allocation of an organization/agency's liquid
assets to assure their most productive use. In otherwords, the limited supply of
capital available to an organization must, if the agency is going to be successful, be
used in a way in which it can do the most good in terms ofprofitability.
Funds required by government agencies come from the taxes of the
people.Those required by non-government or voluntary agencies to administer
and deliver their services come mainly from the following sources:
1. Fees of services
2. Membership dues
3. Investment earnings
4. Use of capital resources
5. Sale of goods and publications; other grassroots fundraising efforts
6. Bequests; private foundations
7. Tax funds or government grants
8. Grants or contracts for services
9. Donor contributions
Social workers need to understand financial records,
financial controls, and the preparation of a budget to
use funds wisely.
FINANCIAL RECORD - is an ongoing record of what the
agency has spent on what and how well it is staying within its
budget. The agency's bookkeeper or accountant enters into
this ongoing record or ledger book all receipts, canceled
checks, and other necessary documents or papers showing
what has been spent. All social workers who are working on a
program must periodically check with the bookkeeper or
accountant to see how the money for the program as being
sent.
FINANCIAL CONTROL- In most agencies, a set of procedures for
purchases is followed in addition to keeping a ledger book on expenses.
The usual practice is for the worker to fill out a purchase order in several
copies. One copy is for the supervisor of the program or the person who
approves the expenditures, one for the bookkeeper, one for the merchant
from whom the social worker will buy, and the last copy is for the worker.
While this practice may seem too bureaucratic, it is helping the worker to
run the program smoothly.
- It is also a common practice for financial control to have more than one
person to handle income and disburse money. Oftentimes, two out of
three signatories, usually staff and a member of the board, sign checks
and deposit slips.
Leader: Mark Wendell Gandeza

Members:
Genevieve Joyce Arizanga
Samantha Rae Celedonio
Praise Lei Ul-layan

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