MEMORANDUM.TO: Budgeting Department CC: Company Secretary FROM: Company CEO DATE: March 12 2017 SUBJECT : STOPPING THE USE IT OR LOSE IT IN BUDGETING MISAPPROPRIATION Following the Organizations decision of the company to check on and even clean the budgeting misappropriation the budgeting committee is hereby requested to avoid increasing the budget towards the end of a project. Characteristic for each budgetary expert's method for working is the yearly spending plan a system that structures business spend over a 12-month duration however has sufficient energy desired money related change. Yearly spending plans insufficient for quickly developing organizations. Taking a gander at a business' numbers in detachment can cover corporate difficulties and the arrangement required to meet what's to come. Strong apparatuses are basic to guarantee figures face investigation and illuminate long haul authoritative methodology. To precisely evaluate an organization's wellbeing the reclassified yearly spending requests revealing arrangements that modify money related targets and permit a strategy for success to be assessed consistently. All Budgeting Department staff and Accounting Department are hereby requested to observe the spending techniques introduced above. Yours Faithfully (sign) John Smith [...]
Module 8 Case Study The budgeting process and budgets themselves have significant impacts on management actions and performance, in both positive and negative ways. It is common at many local, state, or national governmental agencies, and nonprofit organizations, and even in some for-profit enterprises for managers to increase spending at the end of the budget cycle. This process, usually referred to as “use it or lose it" can be harmful to objectives of any organization. Managers do this, as they often feel that if they don't spend the amount that was budgeted this year, next year their supervisors will reduce their budget by the amount not spent in the current year. So, to avoid having their budget dollars reduced, managers often increase spending at the end of the year to ensure all budgeted amounts are spent even if items are not necessarily needed. This is more common in government and nonprofit organizations, but can be found in for-profit enterprises as well. Requirement: Write a memo to the budget managers in an organization, assuming you are the CEO. Your memo should direct budget managers not to utilize this approach, but also offer a logical rationale, and perhaps an alternative solution.