Local Government Or A Non-Profit Organization Article

Local Government Or A Non-Profit Organization - Article Example expenditures and allocations made towards children but it is also about sharing the overall budget of the government as government grants constitutes a significant source of finance. From the official website of ‘Save the Children’ it was found that the organization has legal obligation of the government to fulfill rights and its ultimate goals. The budget is proposed by the committee set up by the Board of Trustees and it is based on the internal revenue code defined under section 501(c) (3). It is usually prepared under the supervision of the senior management (Save the Children, 2013, p.1). The budget so prepared by the management must be reviewed by the senior management and further approved by the Board of Trustees in order to be effective or executable. However, under the code of Ethics and Business Conduct of the organization, the senior management holds sufficient approving authority when the consequences of approval is in the best of interest of children, Agency , community or families that the organization it serve. This code will be specifically executed when there arise any conflict of interest regarding allocation of funds (Carnegie Mellon University, 2008, pp.1-2). The Budgeting Process A budget is a planning tool reflecting organizational mission, programs and strategic course of action and has to be approved by the board of directors. Keeping in mind the obligations of the organization towards the society and its stakeholders, the budgeting cycle may be analyzed by breaking the entire cycle into five simple steps. It begins by establishing the need for more expenditure compared to previous year to get better realization of children rights. For instance, as discussed earlier the organization was able to help more than 78 million children in last... Budgeting process refers to determining expenditure needs of the organization in line with its overall objective and long term strategies. It is usually done after assessment of expected expenditure because its relevance is ultimately decided by judging the real expenditure and the proposed allocation in a particular program and also in overall budget. Thus, monitoring of budget is also an important part of the whole budgeting process. Budgetary variances between actual and budgeted allocations must be minimized to increase reliability of forecasting. Some of the common causes of budget variances are faulty assumptions, unrealistic expectations, traditional bias, and arithmetic errors by accountant. Budget has to be prepared in a systematic and disciplined manner so that it covers all financial constraints and have proportionate allocation of funds for respective programs.