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  • Staff

    Module 4: Policies

    Maria has observed that the program managers on her team provide very different types of cost estimates. Paolo, she has observed, provides cost estimates that strike her as suspiciously low. Francisca, on the other hand, seems to be inflating her expenditures to get a larger budget for her program.
    She wants each program to get a fair budget allocation. Is there a policy or process that Maria can use to deal with this issue? What would you do in her position?

    M
    J
    2 Replies
  • Course Facilitator

    @Course_Operations said in Module 4: Policies:

    Maria has observed that the program managers on her team provide very different types of cost estimates. Paolo, she has observed, provides cost estimates that strike her as suspiciously low. Francisca, on the other hand, seems to be inflating her expenditures to get a larger budget for her program.
    She wants each program to get a fair budget allocation. Is there a policy or process that Maria can use to deal with this issue? What would you do in her position?

    Firstly Maria is supposed consult policies or guidelines which guide budget preparation to ensure nobody overstate or understate the budget draft which are being prepared . On her position i could first train them how to go about on preparation the budget by using guidelines and policies even doing some research for purpose of coming up with exactly figure which will require normal adjustment. Also introducing some factors to be considered such as inflation others which can hit the economy.

    P
    1 Reply
  • Maria should set policies and give an estimated on what she would expect the managers budget to be , from there she can give both the ladies the option of submitting two versions of the budget on that has a 5% increase from last years budget and one that has a 5% decrease from the previous years budget. If the organization can afford it , it would be advisable to bring in an expert to assist her team with the financial estimates for the organization. She should also be open to a number of reviews before the final approval.

  • I AM HAPPY TO LEARN HERE

  • The process to follow is the bottom-up approach required to accru all stakeholders along. To avert the crisis of conflciting benchmarks in budget preparation, there is need for gguidelines for salary increases, directives on how to update income/expenditures estimates, directives on income and expenditures goals for programs and departments and directives on contents and format of the draft budgets.

  • There is a policy that Maria that should have given to the team during the course of the budget meeting that guide the team on preparing their budget.
    If I were to be in her position, I would have given the team the written down policy on expenditures for the budget and thy will have to sign on the document that they are aware of the policy

  • We have a very good budgeting.

  • To control these issues, Maria must provide these different collaborators with simple and concise tools to guide their work. exceed in estimates. Also, to reduce overestimates of expenses, it can facilitate obtaining proforma invoices for the various items commonly ordered by their organization.

  • After going through the policies of budgeting process and, I began to ask myself is there any way to avoid these differences since each program manager is budgeting from his or her incremental facts of last year. Can the budgeting be really the same? However, if I was Maria I will give program managers the policy of number of drafts budgeting in order to have many choices.

  • do the same thing

  • The process to follow is the bottom-up approach required to accru all stakeholders along. To avert the crisis of conflciting benchmarks in budget preparation, there is need for gguidelines for salary increases, directives on how to update income/expenditures estimates, directives on income and expenditures goals for programs and departments and directives on contents and format of the draft budgets.

  • Not sure if my first response went through, so Im writing another just in case my first one didn't go through

    If I were Maria, I would implement a policy asking for 3 drafts, one replicating last years estimates, one with a 5% expenditure increase and one with a 5% expenditure decrease. This would narrow down the estimates, allowing for a realistic showing of what the program needs are. Range of costs gives a vantage point for what realistic prices look like

    In Francisca's case, this would show the difference between her actual needs versus her ambitious wants. For Paolo, this keeps budget expectations realistic, as it shows options for his proposed budget needs.

  • I will advocate for a clear unambiguous guideline to budget preparation by the organization. All program heads should be train on it to assist them use it . To make things simple the organization must let program heads list the activities that they will be doing in the in the financial year. So that finance department will cost them and pass it to top management for final approval.

  • If there was a policy to use a standard cost for common expenditures (accessible to all program managers), then the program managers would be able to create an accurate budget for their programs. It may also be helpful to let them know of additional income that can be used to support new innovations within each project.

  • I think the question is to know if Maria is using which budgeting approach. If you adopt an incremental budgeting approach, the year's budget will be built on last year reference to see what needs to adjust. Also, considering the bottom-up method, the budget must be submitted to management for guidelines. Suppose this program budget was drafts that have to approved and become real the budget for all the program. If the budget estimated is not correctly done it can return to the program teams for revised.Therefore Maria should play a role for advisor and show needed. Suspecting low budget estimate, I consider this case as a draft that a possibility to be reviewed and take a good format. For inflating expenditures there limitations to respect .

  • @Course_Operations said in Module 4: Policies:

    Maria has observed that the program managers on her team provide very different types of cost estimates. Paolo, she has observed, provides cost estimates that strike her as suspiciously low. Francisca, on the other hand, seems to be inflating her expenditures to get a larger budget for her program.
    She wants each program to get a fair budget allocation. Is there a policy or process that Maria can use to deal with this issue? What would you do in her position?

    If i am in her position i would opt Zero based budgeting since it requires a careful analysis taking into account the economic situation of the country moreover its goal is to scientifically determine the best way for the organization to spend its money

  • @Madinda said in Module 4: Policies:

    @Course_Operations said in Module 4: Policies:

    Maria has observed that the program managers on her team provide very different types of cost estimates. Paolo, she has observed, provides cost estimates that strike her as suspiciously low. Francisca, on the other hand, seems to be inflating her expenditures to get a larger budget for her program.
    She wants each program to get a fair budget allocation. Is there a policy or process that Maria can use to deal with this issue? What would you do in her position?

    Firstly Maria is supposed consult policies or guidelines which guide budget preparation to ensure nobody overstate or understate the budget draft which are being prepared . On her position i could first train them how to go about on preparation the budget by using guidelines and policies even doing some research for purpose of coming up with exactly figure which will require normal adjustment. Also introducing some factors to be considered such as inflation others which can hit the economy.

    Great points indeed, sure training and policy consultation is crucial when setting the budget in this case.

  • Yes, Maria can set up or even adopt some policies that she see fit for this purpose and avail them and, communicated to her subordinate in this activity, to ensure that they familiarize and understand them before developing their budgets and estimations. I also, suggest she draw out the estimations early for her managers to know them before their budgets, she can able to apply the 5% up or down strategy or any minimum percentage reasonable, which can be drawn from past operational budget, if there’s good revenues and bad revenue of the past fiscal year and reduce or make an increase with this percentage. Additionally, she can also consider using applying the zero-based budgeting method to carefully analyze how the budget will be drawn properly, and at the same time considering time, which is why she needs to use top-down budgeting to save time in this process.

  • If am un her shoes i will refer to the program policies guideline making sure each of this states the right estimate and also verifying their claims i would also school them on how to adhere to the guideline so we can make a budget draft in time to move to completing the budget.

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