Hazes of the budget by objectives


The establishment and implementation of a budget by objectives requires the development of the following phases:

  1. Identification of work programs: The body responsible for budgeting and expenditure managers should identify specific work programs that are meaningful to be developed and which derive from the government program itself.
  2. The defined work programs must be considered in relation to: The existing organizational structure, which must be subordinated to those and not the opposite, assigning a responsible for each objective or group of objectives and avoiding to the maximum the so-called "shared programs" . As a result, administrative organization is an essential element in the success or failure of the implementation of an implementation budget and will raise a few reticences from the political and administrative angle, since it means organizing the administrative structure according to the objectives to be met within of the chosen period.
  3. Identification of the units of execution within each program: This is the phase in which the greatest technical difficulties of the implementation process are presented, since the activities that are truly significant for the achievement of the program's objectives must be chosen and described. The basic theoretical conditions that an activity has to fulfill to be used properly are the following: - To be quantitatively significant. - You must clearly define the function performed. - It must be easily measurable, recommending, where possible, that the quantification is physical and economic. - Possibility of monitoring, both during the execution process and at the end of the process.
  4. Measurement of costs: Attempt to fully measure the costs of implementing the objectives set out in the programs. This implies the orientation of the accounting system to this purpose, with the implementation of an Analytical Accounting at an appropriate level.
  5. Establishment of an internal information system: In order to measure the progress of the program during the year. The monitoring system will allow us to analyze the deviations that occur on the initial plan and to take the necessary corrective measures to redirect the fulfillment of the objective.
  6. Legislation authorizing the budget. Promulgation, in terms of programs, of the legislation authorizing the budget. It would be necessary to introduce in the budgetary rules the necessary modifications to be able to develop this technique without legal problems.
  7. Establishment of accounts: Establishment, on the basis of programs subdivided into units of execution, of the accounts intended to control and record the monetary disbursements. 

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