There are many different types of monitoring information that budget holders should refer to in order to control budgets. These are not all financial activity reports, quantity, performance report quality, employee reports, efficiency and effectiveness. unit cost reports efficiency, income reports quantity. These reports can be produced on a regular basis to coincide with the management accounting information. activity report will be varied depending upon the type of activities undertaken to deliver the service. The budget holders should know which of these activities drive their budget and this Develop the relevant Activity Report.
For example, client numbers, hours worked, number of inquiries, number of applications, facilities and equipment usage, occupancy rates. These reports will assist budget holders explain and understand variances, and inform projected out turn calculations. performance measurement is usually against targets. The target set may be internal or external. The information in performance reports may be a legislative or official requirement, or maybe just useful internally in order to manage the service. The performance reports will often reflect the levels of activity but in action imperative manner.
This data may relate to budget drivers and can be used to help understand the variances in the budget. performance will include statistics on waiting times, processing times, unit cost covered a little later. Customer satisfaction ratings, and so on. Most organizations in the public and nonprofit sector will have a range of different types of employees, including permanent, temporary contract and agency staff. Also, volunteers may be used to deliver aspects of services. Depending on the nature of the service, reporting hours word is very useful to analyze how staff time has been deployed.
This data can be calculated by using timesheets or other methods of monitoring staff time, after employee reports will include attendance levels, vacancy rates, sickness rates, expense claims and so on. Unable to establish the cost of services is a key component of budgetary control. We will look at the most basic unit cost calculation as an example, such that the benefit of such reports can be understood. The cost and budget of a residential home for 50 residents per annum is 1 million. The cost per resident is therefore 20,000. If the occupancy rate is only 40 residents for the year The cost per resident is 25,000.
If the residential home keeps within budget, there will be a nil variance. However, a unit cost report would show a variance of 5000 per residents, highlighting that whilst budgets have not been overspent, there is a higher than planned unit costs, which could be due to inefficiency and waste. activity reports also highlight this. This is a large topic and we have a book on this subject costing and pricing public sector services should further information be needed. Monitoring reports produced by the financial system will include income as well as expenditure. All the techniques already covered apply equally.
Income budgets. There are our reports which are also useful when monitoring income, including sales fees charges per month. Data levels and analysis, sales fees charges per client or customer price per unit, net income, profit or surplus per unit. grant application success rates grant and claims made per month or quarter. Remember that shortfalls in income are the same as overspending. And gains in income can equate to savings.
Budget holders and managers should consider what types of report are most useful given the type of income they have to monitor and control. Find out if you have enough management in information to really understand your budget by undertaking the self development worksheet available to download