3D30

Managing Budgets &

Resources

TEAM LEADER/SUPERVISOR
CMI 314 MANAGING BUDGETS AND RESOURCES

LIGHTHOUSE TRAINING & DEVELOPMENT LTD | 

» LEARNER INFORMATION

Learner name: CMI membership No: Date:

Centre name: Qualification:

Learner statement of I confirm that the attached completed assignment is all my own work, and does not include
authenticity: any work completed by anyone other than myself. I have completed the assignment in
accordance with the Institute’s.

 Tick here to opt out I consent for this assignment to be used for assessment standardisation and where
appropriate, for the dissemination of good practice, on the understanding that the content is
anonymised.

Signed: Date:

Centre statement of On behalf of <CENTRE NAME>, I confirm that the above mentioned learner is registered at the
authenticity: centre on a Chartered Management Institute (CMI) programme of study. The learner is, to the
best of my knowledge, the sole author of the completed assignment.

Name: Job Title:

Signed: Date:

» GUIDELINE WORD COUNT

The written word, however generated and recorded, is still expected to form the majority of assessable work produced by
Learners at Level 3. The amount and volume of work for this unit should be broadly comparable to a word count of 2000-
2500 words within a margin of +10%. The excessive use of word count is not grounds for referral, however the CMI reserve
the right to return work to the Centre for editing and resubmission by the Learner.

» AIM OF THE ASSESSMENT BOOKLET

High performing individuals impact on the performance of teams and the organisation. The aim of this assessment booklet is
to enable managers to evidence their understanding of how to use their knowledge, skills and abilities to support individuals,
not only to perform well, but to exceed expectations.
 Before you begin the assessment booklet please read the CMI 314, unit specification thoroughly as only the content
related to the achievement of the assessment criteria will be assessed.
 Research the topics being assessed. Suggested reading/web resources are provided on the CMI 314 unit
specification. Your tutor may signpost you to relevant resources. Additionally, you may access excellent online
resources at ManagementDirect https://members.md.cmi.org.uk
 If you are enrolled on the Trailblazer Apprenticeship programme you are encouraged to review the Apprenticeship
Standard for Team Leader/Supervisor
Completing the assessment booklet
 The assessment booklet contains a series of tasks which are clearly referenced to the relevant assessment criteria
and indicative content.
 An appropriate referencing system (such as Harvard Referencing) must be used to ensure the original source(s) of
quotations or models can be verified.
 Finally, you must sign the Learner Authenticity statement (an electronic signature is accepted) when submitting
evidence on Quals Direct.
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» E-LEARNING

Further required learning to complete these Tasks, please log on to Management Direct
and complete the Learning Journey – Budgets and Resources

Titles covered in this course:

 Finance
 The manager’s role in finance
 Understanding financial management
 The role finance plays in business planning
 Being business smart with the numbers; knowing the score
 Alternative approaches to budgeting
 Financial ratios and external regulations
 What exactly is a balance sheet?
 Reading a balance sheet
 What exactly is profit and loss account
 Reading a profit and loss statement
 The fundamentals of financial planning

To help you to complete the tasks within this Assessment Book please
log onto your Video Arts eLearning Account and access the Level 3
Team Leader/Supervisor course. http://lighthouse.central-lms.com

Titles covered in this course:

 Finance and budgets

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The importance of managing resources in own area of responsibility
Managing resources is vital to the success and the profitability of all organisations. This task prompts you to explain the types
of resources within your own area of responsibility and what a manager needs to do to manage these effectively.

To complete Tasks 1a, b and c you are encouraged to use well-chosen examples related to a department/team relevant to the
first line manager or an area of responsibility you have researched.

» TASK

In your own words, explain the different types of resources managed within an area of responsibility.

1.1Explain types of resources managed within an area of responsibility

For this question you need to explain a range of resources that you manage. Please select three different resources which may
include goods, equipment, labour, finance, stock, facilities, IT, explain the function of the resource and how they are used,
why they are required to complete tasks.

INSERT YOUR ANSWER HERE:

Engineering Manpower/Labour: in my company Is a resource managed by the project manager and Workshop manager
simultaneously. The resource is discussed between the 2x managers in order to come up with an optimal outcome. We have
many projects on the go at any one time, it is beneficial to ensure that these projects have sufficient manpower but also each
engineer has their own strengths and weaknesses and therefore suit different projects.
When projects are quoted a budget is set, in the world of engine engineering up until the engine is stripped down, what lies
within the internals is an unknown quantity, where possible we would put caveats within the quote to cover this, however with
ever increasing competition profits have become more strained and sticking to budgets, have become more important, not that
it was not important beforehand. With each project we fill in an excel spreadsheet which keeps track of all the purchase orders
and manpower costs spent on each project.
Tooling, is a further resource which requires managing. Our tooling Is sent all around the world on various jobs, and requires
close management to ensure it does not get lost. We have a custom software program, which allows us to book tooling to jobs,
when the tools are returned they are booked back in, this also saves the company a considerable amount of money on
purchasing replacements for lost tooling.

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» TASK

Identify why it is important to manage resources effectively within an area of responsibility.

AC1.2 Identify the importance of managing resources effectively in own area of

responsibility
For this question you need to identify why it is important to manage resources effectively in your area of responsibility, how
do you manage resources and what are the consequences of not effectively managing these resources this may include the
continuity of supply, prevent overspend and over production, prevent shortages, quality of supply.

INSERT YOUR ANSWER HERE:

If the manpower is not managed and managed effectively, jobs would go unfulfilled and customers would let down. This would
mean loss of business and loss of repeat custom. How we manage this is daily meetings between the project manager and
workshop manager. We have a planner setup in an excel spreadsheet which we use to plan engineers against jobs both in-
house and on-site.
If we did not manage budgets, overspend would occur, which would have an effect on the bottom line and reduce profits. This
has further repercussions on the wider aspect of the business, it could cause a lack of investment in staff training, tooling
improvements, business improvements etc., which all ultimately will have an effect on the quality of service.

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» TASK

Explain TWO (2) methods you might use to achieve value for money when managing resources.

AC1.3 Explain methods used to achieve value for money when managing resources
For this question you need to explain two methods used to achieve value for money when managing resources. First identify
the method which may include negotiation, discount, bulk buying, seek alternative suppliers, added services and benefits then
give an explanation of the method and in what circumstance could they be used effectively.

COMPLETE THE TABLE BELOW:

1.

2.

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Understand how to manage costs within a budget
An important role of the manager is to understand the types of budgets and their use within an organisation, the importance
of operating within a budget and the policies and procedures that inform the management of budgets.

To complete Tasks 2a, b, c and d you are encouraged to use well-chosen examples related to a department/team relevant to
the first line manager or an area of responsibility you have researched.

» TASK

Budgets are an important part of planning the finances needed to support business activities. An organisation may have
different budgets which will all feed into an overall “Master” budget.
Using examples, outline the purpose of a budget in an organisation.

AC2.1 Outline the purpose of a budget

For this answer you need to ensure that you first define what a budget is and then explain why they are used within business
this may include meet team objectives, control expenditure, use of resources, accountability, delivering, planning,
expectations of performance

INSERT YOUR ANSWER HERE:

A budget is a financial plan for a defined period of time. A budget is a sum of money allocated for a specific
purpose, and the summary of expenses expected along with proposals for how to meet them.
Imposing a budget ensures that profits are met, it also enables the manager to keep track of expenditure and
assists with making decisions.
In the company I work for the business model is predominantly lots of small projects, these tend to range from
£20k to £500k. Each project is allocated a budget, this budget is worked out by costing the parts value required
for the project, and calculating the man power costs.

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» TASK

Using the table below, identify TWO (2) types of budget and explain how each of these types is used within an organisation.

AC2.2 Explain the types and use of budgets within an organisation

Types may include but are not limited to master, operating, expenses, departmental, functional, capital and cash budgets

COMPLETE THE TABLE BELOW:

Type of budget Explanation of how the budget is used within the organisation

1. Project Budget In the company I work for the business model is predominantly lots of
small projects, these tend to range from £20k to £500k. Each project is
allocated a budget, this budget is worked out by costing the parts value
required for the project, and calculating the man power costs.
When a project is underway, the costs are accounted for and compared
to the expected costs. There are times when there are unforeseen
issues arise, for example once an engine is stripped down new camshaft
followers are required, this cost we can pass onto the customer if
required and we would search for the best price and quality to keep the
costs low. Unfortunately though there are times when we find issues in
which although were unforeseen it is not possible to pass the cost onto
the client, for example we overhauled an engine which after the rebuild
and it failed test due to not making enough power, after many man hours
and head scratching it transpired that the engine governors on this
engine cannot be swapped between different engines. This was an error
of ours and something that had been overlooked, this cost us dear and
the overspend on the budget unfortunately wiped out the budget, This
cost could not be be passed onto the customer.

2.

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» TASK

Running a team or departmental budget requires first line managers to carefully plan and review expenditure. All managers
need to understand the consequences of operating outside a budget.”
Explain why it is important to operate within a budget.

AC2.3 Explain the importance of operating within a budget

Importance refers to financial management processes and compliance procedures within the organisation and may include
but is not limited to financial viability, ability to pay staff, invoices, suppliers, reputation, collective responsibility, recording
payments and expenditure, timeliness, limits of authority

INSERT YOUR ANSWER HERE:

Business targets, business debt, business longevity/future

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» TASK

Using examples, explain how policies, procedures and other forms of organisational governance inform the management of
budgets.

AC2.4 Explain how organisational governance informs the management of budgets

For this answer you must demonstrate that you understand the link between where budgets are set (organisational
governance) and how they can then be used. If possible use an example from the workplace for example capital bids
processes for large purchases or the issuing of yearly budgets.
Organisational governance refers to the application of compliance requirements (e.g. policies and procedures) to ensure
effective budget control and may include but are not limited to budget approval process, legal structure, limits of authority,
ethics, guidelines on procurement, recording, reporting, response to external factors (e.g. inflation), attitude to risk,
contingency planning, monitoring, revision processes

INSERT YOUR ANSWER HERE:

Policy and procedure – legal structure around budgets.

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Understand how to manage costs within a budget
An important role of the manager is to understand the types of costs within a budget, the sources of information that are
used to identify costs in a budget and their limits of authority when managing costs within a budget.

To complete Tasks 3a and b you are encouraged to use well-chosen examples related to a department/team relevant to the
first line manager or an area of responsibility you have researched.

» TASK

Using the table below, explain THREE (3) types of cost within a budget and identify the source of information for each cost
identified.

AC3.1 Explain the types of costs within a budget; AC3.2 Identify sources of information
on costs in a budget
Types may include but are not limited to fixed costs: rent, loans, taxes, salaries, equipment; variable: materials, consumables,
travel, postage; semi-variable: telephone, mobile, utilities, internet
Sources may include but are not limited to purchase orders, invoices, budget statements, receipts, timesheets, supplier
catalogues and brochures.

COMPLETE THE TABLE BELOW:

Type of cost Sources of information

1. Fixed costs Previous years actuals

2. Variable costs Parts costs

3. Semi-variable costs

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» TASK

Identify TWO (2) systems that can be used to manage costs within a budget and give reasons for use.

AC3.3 Identify the systems used for managing costs within a budget
Systems may include but are not limited to spreadsheets, files, accounts software, enterprise systems

COMPLETE THE TABLE BELOW:

Type of system Reasons for use

1. Excel Spreadsheet

2. Expenses forms

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Monitoring and controlling a budget in own area of responsibility
When managing budgets, it is unlikely that all actual costs are the same as the budgeted costs. It is important that all
differences are investigated and a manager is clear about the actions that need to be taken (within their limits of authority) to
manage the budget effectively.

To complete Tasks 4a you are encouraged to use well-chosen examples related to a department/team relevant to the first line
manager or an area of responsibility you have researched.

» TASK

Using examples, explain TWO (2) methods for monitoring a budget.

AC4.1 Explain methods for monitoring a budget

For this answer you are required to explain two methods for monitoring a budget. What they are and how they are used, this
could also include which method is better in a given situation. Method of monitoring budgets refers to actual versus forecast,
calculation of variances (e.g. mix, volume, labour, materials), cost tracking, trend analysis.)

INSERT YOUR ANSWER HERE:

1. Cost Tracking

2.

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 » SCENARIO

You are working as a first line manager in an organisation. You have responsibility for managing the team’s budget and have
received the following budget update from the finance department.
Controlling costs is very important to the profitability of an organisation. Having reviewed the budget that was given to you by
the finance team, you have identified a range of actions that you would like to take to control it. However, the organisation’s
finance policy limits the decisions that can be made by a first line manager regarding the management of budgets.

To complete Tasks 4b, 5a, 5b and 5c you may choose to use this scenario to support your answer. Alternatively, you may refer to
your own experience of managing a budget within an organisation.

» TASK

Outline TWO (2) actions you would take to control a budget.

AC4.2 Outline the actions to take to control a budget

COMPLETE THE TABLE BELOW:

1. kpi

2. Procurement rules

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» TASK

Using an example, explain the limits of authority of a first line manager when managing costs within a budget.

AC3.4 Explain limits of authority when managing costs within a budget

For this answer you need to provide some explain of why organisations have limits of authority when managing costs within a
budget. Limits of authority refers to approval levels (e.g. monetary amounts, authorisation, sign off.

INSERT YOUR ANSWER HERE:

» TASK

As the budget holder, you are very concerned about one area of overspend on the budget. In your own words, identify a
process you would use to escalate problems and changes to a budget.

AC4.3 Identify a process to escalate problems and changes to a budget in own area of
responsibility
Using the scenario above, identify two of the expenditures above (Salaries, Travel, Stationary, Equipment and Materials) and
explain what actions you would take to ensure that the Actual £ was closer to the Budget £
Actions may include but are not limited to responses to under and over spend, chase up sales orders, unpaid invoices, delay
purchase of new equipment, cost cutting, review resources, communicate cost awareness

INSERT YOUR ANSWER HERE:

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» APPLYING THE LEARNING – OFF THE JOB ACTIVITIES

Recognising your Off the Job Learning Activities

Workshop (lighthouse logs this) 7 Hours

Post Course CMI Management Direct Resources 5 Hours
LMS resources 4 Hours

Following the completion of your workshop there are some activities that we ask you to
complete to build your portfolio of skills evidence. Please complete these activities and
submit the evidence with your assessment book.

Post Workshop Activities 12 Hours

TASKS
The tasks required to demonstrate your use of budgets and resource are within your
project management assessment book.

The research and time you have spent completing these tasks can be used as your Off the
Job hours to be added to your Learner Journal on Quals Direct. Remember it is the time
you spend doing the activities within the workplace and not how long you have spent
writing them up. In addition to the work for your assessment evidence we have some
suggestions of areas you could add to your Learner Journal on Quals Direct to contribute
towards your hours these are listed below:
 Complete your reflections of Action Logs from workshop.
 Complete reflections on the types of budgets and resources you encounter within
your role. What are the biggest commodities within your organisation?
 How do you use resources efficiently, do you have targets or budgets that you can
or cannot exceed – for example rotas or delegation of work?
 Does your organisation use reporting systems to update stakeholders on the use of
resource and budgets? How is this communicated and what impact does it have?
 When there are budget or resource issues what leadership styles do you need to
demonstrate to ensure that the operation continues to function?
 Identify behaviours of self and others, how have the following been demonstrated;
taking responsibility, agility, professionalism and inclusivity. Give examples of the
situations that demonstrate these behaviours.

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