Budget allocation methods
There are different budget allocation methods that can be employed to set a budget.
Some units set budgets by allocating money to each separate organization/group.
Questions that may be asked during this process, may be similar to:
- How much shall we allocate to x group this year?
- How much did y receive/spend last year?
- Was that enough? Or too much?
Once set, clerks would monitor how each organization/group spent the money they had been allocated. Often clerks would answer questions during the year such as:
- How much budget do we have left?
- Have we spent any money yet?
This method will help to ensure that budget limits are not exceeded, but it does have a weakness. Baseline budgeting methods do not focus on the effectiveness of how the money is used.
The principal of activity-based budgeting is to allocate funds according to objectives or outcomes.
Once the unit leader decides on the priorities for the unit, the different organizations and groups in the unit can propose different ways to achieve those objectives. Their proposals should outline the expected costs of each activity that contributes towards meeting the unit's priorities. The bishopric/branch presidency can then consider each proposal and allocate the limited resources of the unit to specific activities, setting a budget for each.
The questions asked when budgets are set may be:
- What do we want to achieve?
- How can this be accomplished?
- Will the activity:
- Strengthen faith in Jesus Christ?
- Strengthen families?
- Establish the Church?
- Increase convert baptisms?
- Will it fulfill the unit mission plan?
- Will it help achieve the goals we have set?
- How much will it cost?
Once an activity has happened and all reimbursements have been submitted, the clerk will be able to report if the activity was under or over spent. Any underspends could then be reallocated to support new activities or increase the budget of an already approved activity.
If an organization or group overspend on an activity, they could be requested to trim a little budget from all remaining activities or cancel a previously approved activity to cover the cost of the overspend.
In all budget matters ward and branch officers can make proposals, but the decision making on increasing or decreasing budgets is a matter for the bishopric/branch presidency. These brethren hold the keys to administer in the kingdom and are best placed to make these decisions. By following the principles of activity-based budgeting, unit leaders will be better able to respond to changing circumstances during the year.
Overall the amount of money spent during the year should not be more or less, but the way the money is used and the results achieved should be improved.