BUDGET AND BUDGETARY CONTROL

KARNATAKA POWER CORPORATION LTD

BUDGET & BUDGETARY CONTROL

What is Budgeting ? Budgeting is a Planning and Forecasting Exercise that matches resources available and resources to be raised by business , for Planned Expenditure requirements for a given year.

BUDGET & BUDGETARY CONTROL

What is Budgetary Control ? Budgetary Control is a Process of Management and Cost control that functions by comparing Actual results with Budgeted Results and reviews feedback obtained for input purposes for preparing new or Revised Estimates, and take steps for controlling and correcting deviations if any.

BUDGET & BUDGETARY CONTROL

The Budget and Budget Control Exercise at KPCL is comprised of the following Steps. (1) Obtain Budget Proposal from Constituent Departments/Divisions/Units (2) Review and analyse Budget Proposal with Historical situations and ground situations at the time of Preparing the Budget.

BUDGET & BUDGETARY CONTROL

(3) Preliminary Screening and Discussion. (4) Draft Proposal to be put up before Audit Committee. (5) Approval by Board of Directors after vetting by Audit Committee. (6) Publication of Approved Proposals in Budget Book Form. (7) Periodical Correction by Comparing Actual and Budgeted Results and initiating suitable Correction.

BUDGET & BUDGETARY CONTROL

(8) Preparing revised estimates on a quarterly Basis and comparing the same with Actuals. (9) Generation of Monthly Capital and Revenue Expenditure statements. (10) Historical data of current year used as the comparison base for the next year Budget Exercise.

BUDGET & BUDGETARY CONTROL

Budget is Prepared under 3 heads at KPCL (1) Establishment ,General and O & M Revenue Expenditure Budget. (2) Capital Budget (3) RM & U Budget.

BUDGET & BUDGETARY CONTROL

(1) Establishment ,General and O & M Revenue Expenditure Budget. Establishment and General Expenses Budget Proposals for all Projects is prepared by Administrative wing in Projects and forwarded through the CE of the Project concerned. O&M Expenses Budget is bifurcated into Civil and Electro-Mechanical works and is conceived by the Technical wing and forwarded to the Office of TD for approval before being taken for Finalisation.

BUDGET & BUDGETARY CONTROL

(1) Capital and RM&U Expenditure Budget. Capital / RM & U Budget proposal involves the preparation of Estimates for Capital works to be taken up during the year by the Technical wing and forwarded to the Office of TD for approval before being taken for Finalisation. Capital RM & U Expenditure details are forwarded on a periodical basis as and when required by Government and other Statutory Agencies like KERC/CERC etc.

BUDGET & BUDGETARY CONTROL

Any Excess Expenditure on Revenue and Capital Account is to be approved by MD after perusal by TD and the Finance Department.

BUDGET & BUDGETARY CONTROL

Main Budgetary Guidelines: (1) Austerity Measure circulars as circulated by MD shall be adhered to at the time of Preparing Budget Proposals. (2) All necessary accounting procedures are to be followed before taking up any work.Post Facto approvals are to be strictly avoided. (3) Taking up of Maintenance works without Budget Proposals is to be avoided as far as possible. (4) All O &M works need to be taken only on an Essentials only Basis. (5) Maintenance works of the whole year should be programmed quarter wise and sanction of estimates shall be invariably completed in the previous quarter itself. Maintenance works have to be completed according to the Plan of Action. A critical review of Programme and Progress of all O & M works shall be made by the respective CE`s/ED`s without any delay. (6) Any Budgetary Provision can be operated only after obtaining Administrative and Technical approval.

BUDGET & BUDGETARY CONTROL

Effectiveness of Budgetary Controls
Depends on.

(a) (b) (c) (d)

(e)

Support from the Divisions covered under the Budgetary Plan Implementation in letter and Sprit of the Budget Plan Thoroughness of review and feedback to the Budget Department. Presence of a Good Management Information System for obtaining prompt information to monitor the Budgetary Plan in Operation. Quick follow through on feedback Obtained.

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