Budgets are developed to deliver the objectives of institutions, departments and specific projects. They are governed by general standards and rules, though the size and extent of funds will determine the levels of control required to monitor revenues and expenditure. Objectives should be clearly stated to provide a rational for the income and spending projections. Forecasts must be as accurate as possible and refer to a specific period, i.e., financial year or the duration of a project. Starting figures can be based on previous years, similar undertakings and estimates from external suppliers. Funds should be adjusted to accommodate inflation, currency fluctuations and additional necessary resources. Costing processes vary from organisation to organisation. Once a budget has been approved it becomes the tool to oversee monetary activities including reconciliation at the completion of a project or balancing the books at end of a fiscal period. The budget holder should always include a contingency fund and keep stakeholders up to date of any changes. Accounting documents must be approved and signed off by authorised personnel or the board of trustees and be kept for seven years in the UK.
Image: ©Renée Pfister Art & Gallery Consultancy, 2021.
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