Budgetary control is a very effective tool to maintain financial discipline and ensure adherence to fiscal principles. Through effective budgetary controls, which also imply vigorous planning exercise, the organisation can ensure greater compliance with budget and financial resources management accountability requirements. Budgetary control within the public sector is an effective mechanism, the processes of which are clearly laid out in the FRR 2001. Budgetary control or budget cycle goes through various stages such as budget notification, budget preparation, budget approval, budget release and execution, budget accountability, reporting and auditing.
The objective of assessment of budgetary control is to ascertain the extent to which the organisation has exercised budgetary controls and strengthened and promoted financial resources management.
The auditor verifies, observes, compares and ascertains the compliance of each main indicator and sub-indicator against specific criteria derived from FRR 2001 and other applicable laws, rules, regulations and documents as may be relevant to the agencies being assessed.
The main indicators and sub-indicators to assess and evaluate the budgetary control are given in Table – 2.
|Sl. No.||Main Indicators||Sub-Indicators|
|1||Budget Preparation||i. Forecast of Receipts and Expenditure (relevant to MoF)
ii. Budget Call (relevant to MoF)
iii. Budget Preparation
iv. Budget Submission
|2||Approval Process (MoF)||i. Budget Discussion and Negotiation (rate only when Finance call meeting)
ii. Finalisation and Approval
|3||Budget Execution (MoF)||i. Notification
iii. Variance analysis and control
iv. Absorption capacity
i. Submission/closing of Monthly Accounts
ii. Submission of Financial and Physical Progress Reports
iii. Mid-year review of Budget
v. External Audit