Name : Fellicia Wijaya

Student ID : 17703
Course : Leadership of
Management
Unit : BSBFIM501
Teacher : ROY
Assessment task 3
Date : 02/09/2018
2015 - 2016 FY Budget vs. Actual
Marketing Activity 2015/16 Budget 2015/16 Actual Variances Variance %
Web site redesign $5,000 $7,000 $2,000 40.0%
Incentive scheme $2,400 $4,400 $2,000 83.3%
Education Expo $3,300 $3,500 $200 6.1%
2016 Promotional brochure $1,500 $1,500 $0 0.0%
Commuity sponsorhip $2,000 $2,000 $0 0.0%
Radio advertising $10,000 $10,000 $0 0.0%
Contingency amount $800 -$800 -100.0%
Total $25,000 $28,400 $3,400 13.6%

Variances are as follow :

Overall variances 13.6 – significant.

Specific variances in Website redesign = 40.0%

Specific variances in Incentive scheme = 83.3%

Specific variances in Education expo = 6.1%

Analysis :

1. The company has its own standard variance when they create a budget for expenses, the
budget up to 5% acceptable with the actual variance resulting in 13.6% which is
significant. It indicates issues in the budgeting processes as well as the expenditure
control processes.
2. The company has overspent on website redesign by 40% due to issues, The budget for the
incentive scheme was $2.400 with the actual cost $4.400 means there was a variance of
83.3% , it may indicate high satisfaction rate and education expo has an expendicture
overrun of $200.
3. The student needs to identify the finance policy about invoice of SEO optimization,
website redesign and also the appointment with suppliers.
4. The petty cash policy that two transaction over $200 must be paid directly to ATO on
behalf otherwise, the company needs to collect and keep supporting the documents to
justify why the tax is not withheld.

Solutions

The company’s rules should be more strict ;

- Invoices with wrong authorizations do not get paid.

- Invoices with no purchase do not get paid.
 - No payment over $100 is made by Petty Cash
- Variable expenses need to be calculated volumes of sales.
- Contingency amount needs to be estimated and decided accurately the percentage and
risk based, also the activity based.

Recommendation

1. Any staffs member who want to leave the organization must be checked by one
procedure about their payment which authorized by the person remain outstanding.
2. Invoices and purchase orders should be authorized by the manager who understands the
background information as well.
3. The payment should be checked as always and accurately calculated about all the sales
product.

Overall level of variance, as well as variance on individual marketing activities.

1. Website redesign = 40.0%

2. Incentive scheme = 83.3%
3. Education expo = 6.1%
4. 2016 promotional brochure = 0%
5. Community sponsorship = 0%
6. Radio advertising = 0%
7. Contingency amount = -100.0%
8. Overall level of variance = 13.6%

Identify any expenditure overruns

This company has its own standart variance when they create a budge for expenses, the budget
up to 5% acceptable with the actual variance resulting in 13.6%. About the information that
provided above it is about what the company does in their activities and they are included :

1. Website redesign
The budget for the website redesign was $5.000 with the actual cost $7.000 means there
was a variance of 40.0% in it.
2. Incentive scheme
The budget for the incentive scheme was $2.400 with the actual cost $4.400 means there
was a variance of 83.3%
3. Education expo
The budget for the education expo was $3.300 with the actual cost $3.500 means there
was a variance of 6.1%

Justifications on expenditure overruns

 1. The website redesign budget was damaged due to as there was issues with the design and
need to increase CEO optimization. This CEO optimization was negotiated with and
authorized by The Marketing Assistant who has recently left the company. Three website
company were recommended and they were as follows and ABC web design. Design was
finally signed off by the administration manager and the final payment was authorized by
the operations and finance manager with no purchase order.
2. The incentive scheme is the most popular one in this worldwide and about the payment is
more incentive than what we expect before, it was found that two student incentive
payments were made by petty cash and transaction which is going to be $200. It also
found one student has received $600 incentive payment in the first week of march 2015,
the payment was made in full and the invoice the student provided does not have ABN
information in it.
3. Contingency amount was allocated but it was not sufficient to meet overrun.

Identify any expenditure made in breach of the company Finance Policy and Procedure.

All finance transactions as noted in this policy are to be authorised by the noted authorized
person prior to the transaction being undertaken.

Prior to any of the following finance transactions being undertaken, the authorizing person noted
must authorise the transaction. Where additional policy is noted, this policy must also be adhered
to when undertaking the finance transaction.

Petty cash should be used to pay for small business expenses up to $100 where payments through
accounts payable or credit card are not justified or appropriate also Petty cash vouchers must be
completed before any cash is taken from the petty cash float. Only up to $100 can be disbursed at
any one time. All petty cash vouchers issued must be approved by a Senior Manager. Once the
petty cash is spent, a receipt or invoice should be attached to the voucher and returned to petty
cash with any balance of monies unspent all completed vouchers must have the following details
included :

1. Issue date of voucher

2. Name of person issued the voucher
3. Amount of monies disbursed
4. Details of expense
5. Invoice or receipt, and
6. Signature of approval person

Identify any potential breach of record keeping obligation the company owes to the Australian
Taxation Office (ATO) and for audit purposes

A clear escalation point to resolve issues with the ATO. It will be provided with the contact
details of an executive level officer in the Audit management plan. We will normally examine
source documents to verify the accuracy of financial accounting information and the integrity of
access controls within your systems. In this breach of record keeping also found a student has
received $500 incentive payment for the first week of March 2015 with the payment being made
in full. The invoice the student provided does not have ABN information, the organization need
to be hold 49% tax to ATO if this is not the case of the company needs to collect and supporting
document and analyse why the tax not held on it.

Proposed solutions to manage and monitor expenditure within budget in 2016-2017 financial
year

Budget monitoring is done to make sure that resources are being utilised as per plans on the
budget. Tracking or monitoring the way that financial resources are utilised or effectively used is
very important for every department and the organization. It is a continuous process to ensure
that objectives are being met as specified on the budget.

Income and expenditures need to be monitored to find any change in patterns so that appropriate
actions can be taken. This monitoring procedure can be done at regular intervals, for example
every month. When monitoring data, take into account that the budget that was planned for the
year ahead, and the expenses and income to date. Look at the balance remaining for the rest of
the period in the current financial year and run a forecast of what the situation will be at this rate
by the end of the financial year. Look at any variations, if any, both positive and negative, and
take necessary actions to rectify them. In each step, it is important to document (record) all facts
and actions. It is best to monitor the income and expenses at the budget holder and higher
management levels through regular meetings.

There must be effective cash flow management, as it is very important for the services and
products that the business delivers. Budgets can be split according to cost centres or other codes
or levels, so that it is easier to monitor them. This will help to identify areas that over-achieve
and under-achieve.

Recommendations on improvement of the company Finance Policy and Procedure.

1. Setting up a business bank account – you are advised to set up a bank account for your
business, keep it separately and allow you to easily extract the business.
2. Creating a budget – set a realistic budget for your business, a budget will understand your
current situation and make projections.
3. Estabilishing an accounting system – accounting is a process of recording the financial
transaction for your business.