Appendix 4 – Report on budget and expenditure

Projected budget and actual budget and variations

The projected marketing budget was $25,000 whereas the actual budget was quite higher
which is $28,400.The company normally accepts the variance up to 5%.Comparing the
projected budget and actual budget, the overall variance was 13,6% which is quite higher
and it shows that there is an issue in budget processing as well as in control expenses.

From the report, it can be seen that there were a breach of Finance policy where,2
transactions of $200 were made thorugh petty cash. There is a potential breach of record
keeping compliance obligation that $600 incentive payment was made to a student without
having the student’s ABN information.

Overall level of variance, as well as variance for individual marketing activities

Variances are as follows :

 Overall variance 13,6 : Significant

 Specific variances in website design : 40%
 Specific variance in incentive scheme : 83,3%
 Specific variance in education expo : 6,1%

Reasons for overruns

Website Design : Due to issues with the design and the content itself.

Incentive scheme : overspent, increase in the student referrals, number of student

increased due to referral hence the expenses increased.

Education Expo : This could have increased due to transportation cost or accommodation
cost.

Proposed solutions for following year’s budget

Contigency amounts needs to be estimated more accurately.

Variable expenses needs to be calculated based on the number of students.

New budgeting tool can be used to develop budgets.