The nature and purpose of a budget varies according to the work context, but the principles of managing a budget remain the same. Individuals responsible for managing budgets work in middle to senior management roles in which they are accountable for monitoring income and expenditure against budget projections.

Skills relating to developing budgets are found in the unit CUEFIN01C Develop a budget. Combined assessment of these units is appropriate.

ELEMENT

PERFORMANCE CRITERIA

1. Allocate funds

1.1. Allocate funds in accordance with the budget and agreed priorities

1.2. Keep all relevant personnel fully informed of budgetary decisions

1.3. Make colleagues aware of the importance of budget control

1.4. Accurately detail records of resource allocation in accordance with organisational control systems

2. Monitor and control expenditure

2.1. Check actual income and expenditure against budgets at regular intervals

2.2. Identify areas for improved budget performance and investigate options

2.3. Prepare income and expenditure reports and present in the required format to relevant personnel

2.4. Identify deviations from the budget, the reasons for deviation and take appropriate action

2.5. Present recommendations clearly and logically to relevant personnel

2.6. Advise relevant personnel of budget status in accordance with agreed timeframes

3. Complete financial reports

3.1. Accurately complete all required financial and statistical reports within designated timelines

3.2. Make recommendations regarding future financial planning as appropriate

3.3. Make reports clear and concise, and check for accuracy.

3.4. Promptly forward reports to relevant personnel

Required skills

organisation or project's procedures for budgeting and financial reporting/management

legislative or other requirements (e.g. funding body guidelines) with regard to disbursement of funds and record keeping

Required knowledge

knowledge and understanding of budgets, including different types of budget, how a budget is structured and how to interpret a budget

financial reports, including structure, features and formats for specific purposes

financial reporting procedures and cycles relevant to the specific industry context

areas of financial responsibility specific to the industry context

The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit

The following evidence is critical to the judgement of competence in this unit:

monitoring of income and expenditure in accordance with the budget and identifying ways of improving budget performance

knowledge of basic budget principles and structures

knowledge of budgeting terminology relevant to a specific industry context.

Context of and specific resources for assessment

The assessment context must provide for:

project or work activities that include the management of and reporting on a budget for a specific project/event/operational area over a period of time so that the monitoring and implementation aspects of the unit can be assessed.

Method of assessment

Assessment may incorporate a range of methods to assess performance and the application of essential underpinning knowledge, and might include:

evaluation of reports detailing financial performance of projects or activities conducted by the candidate

evaluation of reports prepared by the candidate detailing the processes undertaken to manage and monitor a budget

case studies and problem solving to assess application of principles of budget management to different workplace contexts

review of portfolios of evidence and third party workplace reports of on-the-job performance by the candidate.

Assessment methods should closely reflect workplace demands and the needs of particular groups (e.g. people with disabilities, and people who may have literacy or numeracy difficulties such as speakers of languages other than English, remote communities and those with interrupted schooling).

Guidance information for assessment

Assessment of this unit requires access to:

figures and data that reflect the financial operating conditions of industry.

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

Budgets may include:

budgets for a small business

cash

departmental

event

grant funding

project

sales

Relevant personnel involved in budget development may include:

creative personnel

funding bodies

investors

management

sponsors

technical personnel

Resources include all financial resources such as:

bank accounts

cash

cheques

grants

investments

Financial reports may include:

balance sheets

cash flow reporting

profit and loss statements

Unit sector

This unit contains employability skills.