Budgeting
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What is a budget?
A budget is a financial plan used to forecast expected revenues and expenses for a specific fiscal period (typically monthly, quarterly and annually) for entities and major events/activities.
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What factors should be considered when preparing a budget?
Normally, budgets can primarily be based on prior year actuals, however, changes in circumstances need to be taken into account.
Such as, but not limited to:
a. cost of living/inflation changes (applicable to both revenues and expenses);
b. increase/decrease in customer base;
c. new product lines;
d. increase/decrease in major events/activities;
e. current and future capital expenditure requirements;
f. future cash flow requirements; and
g. changes in workforce/wages. -
By when do I need to have my budget completed each year?
Budgets need to be completed and approved prior to the start of each new fiscal year (April 1st). In order to be able to meet this deadline, entities must have their completed budgets submitted to the local accounting office by 15 February.
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Can I spend more than my approved budget?
Expenditures in excess of budgeted amounts are not authorized. As per the CDS Delegation of Authorities for Financial Administration of Non-Public Property, payment approval authorities must ensure that “payments plus outstanding commitments do not exceed the relevant budgetary allocation”.
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If I am under budget in one particular area (supplies for instance), can I charge non-supply expenditures to my supplies account?
No, in this example charging non-supply expenditures to the supply account is prohibited and would overstate supply expenses for the period and understate the other expenses. This negatively effects the accuracy of the financial statements and future comparatives.
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Is there a threshold that a budget can be overspent before approved minute authority is required?
No. Based on the Delegation of Authority, in order to spend money, there has to be an approved budget. If an entity is going to overspend in any particular area, they must seek minute or e-mail approval to adjust the budget from their chain of command.
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How do I revise my budget throughout the year if needed?
Budget revisions require the same approvals as the original budget. Once approved, revised budgets are send to the local NPP Accounting Office for action.
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Why does the Base/Wing Fund Committee have to approve my budget?
Recreational clubs and subsidiaries of the Base/Wing Fund such as Curling Clubs, Golf Clubs, etc. are components of and administered by Base/Wing Fund; thus their budgets must be approved by the Base/Wing Fund Committee or the Base/Wing Fund Commander directly.
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Who must approve mess and unit budgets?
Mess budgets must be approved by the general membership of the mess and the CO. If the mess committee is not meeting prior to the start of the new fiscal year, the budget can be approved in advance by the Base/Wing Commander.
Unit budgets must be approved by the Unit CO. -
Once my approved budget has been submitted to the NPP Accounting Office, how can I review and verify the budget?
You can review and verify your budget by logging into Business Intelligence (BI) and run financial statements under the CFMWS Standard Statement Package dashboard. If you do not have access to BI, contact your local NPP Accounting Office for assistance.
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Should I create a budget for my balance sheet?
No. Budgets are financial plans used to forecast expected revenues and expenses, which are income statement items.
