FINANCIAL PROCEDURES: BUDGETARY PROCESS
The Annual Budget
1. The process to construct the Annual Budget begins when the Board sets the strategic priorities for the year at its July meeting. These priorities are communicated to the Committee chairs in August, who are asked to respond by the beginning of September with their proposals. These proposals are examined by the Budget and Finance Committee (B&FC), the Executive Committee, and the Board, which approves the final budget. The procedures are detailed in the following paragraphs.
Setting of Strategic Priorities
2. The Board in its July meeting receives the accounts for the prior year, so it can assess what committees have achieved. It also receives a report on what committees have done in the first six months of the year and what they expect to achieve in the remaining months. From this information the Board will outline its strategic priorities for the following year, and it will then set the overall funding levels in percentage terms it expects to allocate to these priorities. Committees will them be informed of this in order to make their budget bids.
3. Committees will then be asked to send their budget proposals to the Treasurer by 31 August. They are to be addressed to the Treasurer at Central Office, where the Finance Director (FD) collates the proposals, reviews the submitted information, contacts the budget holders regarding any problems such as missing or questionable information, all in consultation with the Treasurer.
4. Proposals must be made on the form sent on behalf of the Treasurer to all Budget Holders (eg, Committee and Working Group chairs, Executive Committee members, Executive Director, etc). Co-Chairs, including Regional Co-Chairs, should send their budgets through the Chair of the main Committee concerned and not directly to Central Office. Budget applications should contain sufficient information to explain how the activities requested for funding meet the strategic priorities of the Board and how the activities will be evaluated. Committees which have received funding in the previous years should include details of accomplishments achieved with that money in order to assist the decision-making process. Consultations with the FD or the Treasurer may be of assistance when putting together budget proposals. The FD prepares the preliminary budget for the next step including current year spend and projected outturn for each committee.
5. If the committee is proposing to run a conference then the full budgetary information on the conference should be supplied including all forms and sources of income and total gross expenditures. The Procedural Code on Conferences has a detailed explanation of the different types of conference funding available.
Preparation of the First Stage Budget
6. During September, the Budget & Finance Committee meets in person to review the preliminary budget. The Treasurer will have made certain that B&FC criteria for budget construction have been followed, and that the specific amounts requested are reasonable within context. The primary task is to match the priorities with the available funds. The Budget & Finance Committee attempts to prioritise those projects which best fit the Boards strategic priorities. The Budget & Finance Committee does not decide the priorities nor does it establish policy but rather is guided by them. Any funds underutilised in a strategic area are to be placed in a “Funds not Allocated” category of contingency for that priority.
7. The President and/or Vice President may on occasion attend at least part of this meeting if they wish to do so.
8. The Budget & Finance Committee also prepares a list of Recommendations first to the Executive Committee and then to the Board.
Preparation of the Second Stage Budget
9. The Executive Committee then meets in person in October to consider the First Stage Budget (together with any late proposals) and the Budget & Finance Committee recommendations. It reviews the prioritised projects as recommended by the Budget & Finance Committee to ensure that they meet the Boards strategic priorities. The Executive Committee assigns priorities to any late submissions and includes them in the budget if necessary.
10. Central Office then informs those Budget Holders whose budget proposals have been changed. Relevant responses and/or additional information are considered during the next stage of the budgetary procedure.
Preparation of the Budget for presentation to the Board
11. The Executive Committee reviews the Second Stage Budget after receiving any updated information from budget holders. It then makes any adjustments deemed necessary for presentation to the Board. Central Office then informs Budget Holders of the Executive Committee’s decisions concerning their budget proposals, if there are any significant changes since the previous stage.
Preparation of Final Budget
12. The Board receives the budget for study prior to their December/January meeting. The Board makes any modifications that it considers necessary. It approves the revised Final Budget as the official document governing financial operations for the ensuing year. Central Office informs Budget Holder and the Budget & Finance Committee of the Final Budget. Approval of the budget by the Board constitutes authority to spend.
Budgetary Proposals Received Late or after the Final Budget is Approved
13. All budget proposals received after the Final Budget is approved will be made to the Treasurer and must contain the same degree of detail required as at the beginning of the budgetary process. Proposals should be addressed to the Treasurer at Central Office, where the FD consults the Treasurer as to how they are to be handled. The FD will ensure the Treasurer has all the information needed to make decisions on the proposals. The Treasurer will determine the process for consulting the B&FC and the Executive Committee.
14. Determination of Late or Out-of-Cycle Budget Proposals:
a) The Treasurer is authorised to determine proposals up to $5,000 (whether to be met from contingency, from funds not allocated, or from movement between items), reporting any decisions to the next meeting of the Executive Committee where they will be minuted.
b) All proposals above $5,000 and up to $20,000 (whether to be met from contingency, from funds not allocated, or from movement between items) will be referred to the Executive Committee for determination. Unless timing makes it impossible, the B&FC will be consulted on all proposals above $10,000, prior to determination by the Executive Committee. Any proposal above $20,000 must be referred to the Board for determination. Board approval for this can be sought by email when necessary, with a time limit to respond.
The Treasurer and the Executive Committee are not authorized to exceed the overall level of the Final Budget set by the Board, without the Board’s approval.
Monitoring and Reporting
15. Budget holders are required to report to the B&FC in September each year using the Committee Information Form, stating how they spent the money in the prior year, what was achieved in spending this money and how it has affected this year’s objectives. The Finance Director will remind all Chairs of this requirement and provide the Committee Information Form at least one month prior to the deadline for receipt of the completed forms.
16. Reports to Budget Holders and to the Executive Committee, indicating the amount of draw-down of that centre’s yearly allocation, will be sent on a periodic basis.
17. Reports of cash flow will be given at each Executive Committee meeting.
18. The Treasurer will report to each Board meeting with oversight of financial trends not evident by review of monthly reports alone.
19. Wherever the term ‘Vice President’ is used in this Procedural Code it will apply equally to any Secretary General in post.
Changes to paragraph 13 by Executive Council, January 2003
Limit on contingency spend without Board approval added July 2010
Setting of strategic priorities and amendments to first and second stage budgets approved July 2012