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Policy on use of surplus with unbudgeted spending

Some departments deliberately under budget and then when a surplus is projected, come back with additional spending requests for items that should have been in the budget to begin with. I'd like to have process to administer such requests that is fair to the dept and the company.

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Why not reject the budget in the first place? Force them to submit a realistic budget.

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

Because your budget is "FIXED"! There are a number of budgeting techniques (rolling or zero based budget for example) that "adapts" to present conditions and may minimize (if not eliminate) this practice.

Of course, Wayne's point is valid. Scrutiny and approval of the budget needs to be stepped up.

David Buley
Title: Chief Financial Officer
Company: Association of Independent Schools of NS..
(Chief Financial Officer, Association of Independent Schools of NSW) |

Of course, some departments habitually overbudget too and spend up to that amount or otherwise they think they'll lose it next year.

I think the best answer is more scrutiny around all budgets. Make them justify every element of the budget.

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