Budget Creation Process: Difference between revisions
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The Freegle budget is an estimation of income and expenditure for the next financial year (and beyond) | The Freegle budget is an estimation of income and expenditure for the next financial year (and beyond). | ||
It is used to provide | It is used to provide insight into how Freegle operates, to assess the health of Freegle's finances, and to provide a benchmark against which actual income and expenditure is measured. | ||
Whilst the budget is being set, it is also a convenient moment for the | Whilst the budget is being set, it is also a convenient moment for the Board to approve much of the standard financial expenditure related to operations (e.g. IT expenditure). | ||
This process describes how the budget is created | This process describes how the budget is created. | ||
== Triggers == | |||
The creation of a budget is an annual process, triggered by an entry in the [https://docs.google.com/spreadsheets/d/1Fe8yXXQl9qTBP1rdFfhcQVhc6OoBSVX-_mArW2mr_EU/edit?usp=sharing Board Calendar] | The creation of a budget is an annual process, triggered by an entry in the [https://docs.google.com/spreadsheets/d/1Fe8yXXQl9qTBP1rdFfhcQVhc6OoBSVX-_mArW2mr_EU/edit?usp=sharing Board Calendar]. | ||
If there was a major change to Freegle's finances or operations, it might be necessary to refresh the budget on an ad-hoc basis, but as of January 2025, this has never happened | If there was a major change to Freegle's finances or operations, it might be necessary to refresh the budget on an ad-hoc basis, but as of January 2025, this has never happened. | ||
== Responsibilities == | |||
* Individual [[Budget Owner]]s provide a view of the likely expenditure in their budget areas for the coming period(s) | *Individual [[Budget Owner]]s provide a view of the likely expenditure in their budget areas for the coming period(s). | ||
* The Finance Director supported by the Treasurer creates the budget | *The Finance Director, supported by the Treasurer, creates the budget. | ||
* The [[Finance and Risk Working Group]] is consulted on the content and approves the budget for submission to the Board | *The [[Finance and Risk Working Group]] is consulted on the content and approves the budget for submission to the Board. | ||
* The [[Freegle Board]] reviews and approves the Budget | *The [[Freegle Board]] reviews and approves the Budget. | ||
== Inputs == | |||
* The previous budget | *The previous budget. | ||
* Previous actual financial spend, accounts and forecasts | *Previous actual financial spend, accounts and forecasts. | ||
* Payment approvals | *Payment approvals. | ||
* Views from [[Budget Owner]]s | *Views from [[Budget Owner]]s. | ||
== Outputs == | |||
* Budget Sheet | *Budget Sheet. | ||
* Budget Narrative/Report | *Budget Narrative/Report. | ||
== Budget Sheet Detail == | |||
The simplest way to view what detail exists on the budget sheet is by looking at a previous example | The simplest way to view what detail exists on the budget sheet is by looking at a previous example. | ||
However, the budget sheet has previously contained the following key information for each entry: | However, the budget sheet has previously contained the following key information for each entry: | ||
* An Account Code to allow a match to the information held in the actual accounts | *An Account Code to allow a match to the information held in the actual accounts. | ||
* The [[Budget Owner]] | *The [[Budget Owner]]. | ||
* Details of expenditure for the next financial year | *Details of expenditure for the next financial year. | ||
* Details of expenditure for years following the next financial year (to identify any items that do | *Details of expenditure for years following the next financial year (to identify any items that do not recur). | ||
* Any assumptions or calculations used to create the item | *Any assumptions or calculations used to create the item. | ||
* Approval information for any items approved as part of the budget | *Approval information for any items approved as part of the budget. | ||
== Budget Report Detail == | |||
The simplest way to view what detail exists on the budget report is by looking at a previous example | The simplest way to view what detail exists on the budget report is by looking at a previous example. | ||
However, the budget report has previously contained the following key information: | However, the budget report has previously contained the following key information: | ||
* A view of our financial health made by projecting forward our likely deficit or surplus. | *A view of our financial health, made by projecting forward our likely deficit or surplus. Specifically, a view of when we will exhaust our reserves. | ||
* A graph showing where the main areas of income and expenditure | *A graph showing where the main areas of income and expenditure are. | ||
* A report against a set of Budget Owner Financial Controls (see [[Budget Owner]] best practice guidelines) | *A report against a set of Budget Owner Financial Controls (see [[Budget Owner]] best practice guidelines). | ||
* A list of the payment approvals requested/made as part of the budget | *A list of the payment approvals requested/made as part of the budget. | ||
== Process == | |||
# Using the inputs above, the Finance Director, supported by the | # Using the inputs above, the Finance Director, supported by the Treasurer, creates a draft budget sheet estimating the proposed expenditure for the next financial year and those that follow. | ||
# The Finance Director reviews the draft budget with individual Budget Owners and agrees any changes | # The Finance Director reviews the draft budget with individual Budget Owners and agrees any changes. | ||
# The Finance Director reviews the draft budget with the Finance | # The Finance Director reviews the draft budget with the [[Finance and Risk Working Group]] and agrees any changes. | ||
# The Finance Director creates a draft report, supporting the budget | # The Finance Director creates a draft report, supporting the budget. | ||
# The Finance Director also creates a set of approvals for standard operational items to go alongside the budget (see [[Managing Financial Approvals Process]]) | # The Finance Director also creates a set of approvals for standard operational items to go alongside the budget (see [[Managing Financial Approvals Process]]). | ||
# The Finance Director submits the budget sheet and report to the Finance | # The Finance Director submits the budget sheet and report to the [[Finance and Risk Working Group]] for approval. | ||
# The Finance | # The [[Finance and Risk Working Group]] approves (or asks for changes, which trigger a refresh/reapproval loop) the budget. | ||
# The Finance Director submits the budget sheet and report to the Board for approval | # The Finance Director submits the budget sheet and report to the Board for approval. | ||
# The Board approves (or asks for changes which trigger a refresh/reapproval loop) the budget | # The Board approves (or asks for changes, which trigger a refresh/reapproval loop) the budget. | ||
# The Finance Director secures the budget documents | # The Finance Director secures the budget documents. | ||
# The Finance Director creates an updated document for current approved payments, based on the newly approved budget and approvals | # The Finance Director creates an updated document for current approved payments, based on the newly approved budget and approvals. | ||
== Links == | |||
* [https://docs.google.com/spreadsheets/d/1Fe8yXXQl9qTBP1rdFfhcQVhc6OoBSVX-_mArW2mr_EU/edit?usp=sharing Board Timetable] | *[https://docs.google.com/spreadsheets/d/1Fe8yXXQl9qTBP1rdFfhcQVhc6OoBSVX-_mArW2mr_EU/edit?usp=sharing Board Timetable] | ||
* [https://docs.google.com/document/d/1kyGaqBNiXsGPfo8rRpXcK9RYvi-s3MdaPFsNJGwv97o/edit?usp=drive_link Freegle Budget Report for Financial Year 2024-2025] | *[https://docs.google.com/document/d/1kyGaqBNiXsGPfo8rRpXcK9RYvi-s3MdaPFsNJGwv97o/edit?usp=drive_link Freegle Budget Report for Financial Year 2024-2025] | ||
* [https://docs.google.com/spreadsheets/d/1a1UpWrtpfNcaei2X7p-dHIg2iSVR3xx_QETxl9Aaj_k/edit?usp=drive_link Freegle Budget Sheet for Financial Year 2024-2025] | *[https://docs.google.com/spreadsheets/d/1a1UpWrtpfNcaei2X7p-dHIg2iSVR3xx_QETxl9Aaj_k/edit?usp=drive_link Freegle Budget Sheet for Financial Year 2024-2025] | ||
[[ | April 2026 [https://discourse.ilovefreegle.org/t/freegle-board-news-april-2026/9619] - the Board announced a change in governance, which included changing the Finance Sub-Committee to the Finance and Risk Working Group. This document was updated in April 2026 to reflect the change. | ||
[[ | |||
[[Category:Organisation & Governance]] | |||
[[Category:Finance]] | |||
[[Category:Policies, Procedures, Remits]] | |||
Latest revision as of 12:00, 17 July 2026
The Freegle budget is an estimation of income and expenditure for the next financial year (and beyond).
It is used to provide insight into how Freegle operates, to assess the health of Freegle's finances, and to provide a benchmark against which actual income and expenditure is measured.
Whilst the budget is being set, it is also a convenient moment for the Board to approve much of the standard financial expenditure related to operations (e.g. IT expenditure).
This process describes how the budget is created.
Triggers
The creation of a budget is an annual process, triggered by an entry in the Board Calendar.
If there was a major change to Freegle's finances or operations, it might be necessary to refresh the budget on an ad-hoc basis, but as of January 2025, this has never happened.
Responsibilities
- Individual Budget Owners provide a view of the likely expenditure in their budget areas for the coming period(s).
- The Finance Director, supported by the Treasurer, creates the budget.
- The Finance and Risk Working Group is consulted on the content and approves the budget for submission to the Board.
- The Freegle Board reviews and approves the Budget.
Inputs
- The previous budget.
- Previous actual financial spend, accounts and forecasts.
- Payment approvals.
- Views from Budget Owners.
Outputs
- Budget Sheet.
- Budget Narrative/Report.
Budget Sheet Detail
The simplest way to view what detail exists on the budget sheet is by looking at a previous example.
However, the budget sheet has previously contained the following key information for each entry:
- An Account Code to allow a match to the information held in the actual accounts.
- The Budget Owner.
- Details of expenditure for the next financial year.
- Details of expenditure for years following the next financial year (to identify any items that do not recur).
- Any assumptions or calculations used to create the item.
- Approval information for any items approved as part of the budget.
Budget Report Detail
The simplest way to view what detail exists on the budget report is by looking at a previous example.
However, the budget report has previously contained the following key information:
- A view of our financial health, made by projecting forward our likely deficit or surplus. Specifically, a view of when we will exhaust our reserves.
- A graph showing where the main areas of income and expenditure are.
- A report against a set of Budget Owner Financial Controls (see Budget Owner best practice guidelines).
- A list of the payment approvals requested/made as part of the budget.
Process
- Using the inputs above, the Finance Director, supported by the Treasurer, creates a draft budget sheet estimating the proposed expenditure for the next financial year and those that follow.
- The Finance Director reviews the draft budget with individual Budget Owners and agrees any changes.
- The Finance Director reviews the draft budget with the Finance and Risk Working Group and agrees any changes.
- The Finance Director creates a draft report, supporting the budget.
- The Finance Director also creates a set of approvals for standard operational items to go alongside the budget (see Managing Financial Approvals Process).
- The Finance Director submits the budget sheet and report to the Finance and Risk Working Group for approval.
- The Finance and Risk Working Group approves (or asks for changes, which trigger a refresh/reapproval loop) the budget.
- The Finance Director submits the budget sheet and report to the Board for approval.
- The Board approves (or asks for changes, which trigger a refresh/reapproval loop) the budget.
- The Finance Director secures the budget documents.
- The Finance Director creates an updated document for current approved payments, based on the newly approved budget and approvals.
Links
- Board Timetable
- Freegle Budget Report for Financial Year 2024-2025
- Freegle Budget Sheet for Financial Year 2024-2025
April 2026 [1] - the Board announced a change in governance, which included changing the Finance Sub-Committee to the Finance and Risk Working Group. This document was updated in April 2026 to reflect the change.
