What is a Budget Committee?
A budget committee is a group of individuals that prepares the financial plan of a company or country for a period of time. A budget committee is in charge of planning, creating and maintaining the budget of an organization for a specific period. Organizations or business entities can have their budgets planned quarterly, annually or biannually. Budget committees do not only plan and review budgets, they are also responsible for how budgets are implemented. They review and approve budgets for various sectors and departments. Oftentimes, the top management of organizations make up its budget committee. In government, budget committees comprise of selected members of the house of representatives.
What Does a Budget Committee Do?
A budget committee often comprises of top executives of a company or individuals who are professionals in the finance and accounting industry. The committee plans the finances of the company or organization and ensures that the plan is implemented. The budget committee also oversees the revenue and expenditure of the organization or government, this means that all the cash inflow and cash appropriation of a company government are known by the budget committee. The efficiency of a budget committee goes a long way in determining whether a company be solvent or turn out to be insolvent.
Example of a Budget Committee
Company XYZ is a fabric producing company and has a staff strength of 500 workers for many of its operations. A budget committee is set up for Company XYZ to help plan its finances and see to the proper allocation and disbursement of funds for its operations. The budget committee comprised of professionals and board members of the company and they review budgets submitted by different departments of Company XYZ for approval or disapproval. The budget committee has an unrestrained access to the entire financial plan of the company and reviews the plan as to whether it is appropriate or inappropriate. The committee also maintain the budget by ensuring that various departments stick to their submitted budget without any alteration or overshoot.
