Question

To what extent are the employees in a team/ section/ division responsible for:

Data collection to support the budget?

Developing realistic and attainable budgets for the section/ division?

Monitoring expenditure?

Using the budget to measure actual work against projected work achievements?

Answer 1

Employees are fully responsible for data collection to support the budget. Data collection is done by the employees using previous budgets, forecasting techniques, market research, mathematical formulas etc. The budget data is collected by using various qualitative and quantitative techniques. So its becomes the responsibility of the employee collecting to use correct techniques and provide the needed data. If the employee doesn't use the correct technique or makes a mathematical error, the data collected will not show the true picture.

The divisions always try to make budgets that are realistic and attainable by keeping various factors in mind like previous year budgets, future forecasts etc. But sometimes it may happen that the budget may not be attained due to some unforesen event or uncertainty in the industry or market. Also, preparation of budgets is the task of the division heads and employees are supposed to follow those budgets. So, we can say that employees are partially responsible for developing realistic and attainable budgets as their main task is to provide data for budgeting, following the budgets and make them attainable. The attainment of budgets also depends on various outside factors that are out of the control of business.

Monitoring expenditure is the foremost duty of the employees of the division. If there is no monitoring of exxpenditure, it can lead to differences in the actual and budgeted performance. Its the responsibility of the employees to see that the expenditure are within control. They should check for any unnecessary wastage of resources, idle hours etc to avoid high expenditure than expected.

The divisions use budgets to measure the actual work and to find out any deviations. Use of budgets to measure actual work against projected work helps in knowing thw areas where the divisions can improve their working. This is basically the work of divisional heads. The employees provide them with the information required. Therefore, they are partially responsible to the extent of information provided.