Quote:
Originally Posted by DoubleF
Umm... a budget is a tool. Furthermore, a budget is imaginary and made up. I would explain a budget as being lines in a coloring book. It's there to guide proper allocation of colors and resources, but the moment you decide to "draw outside the lines", it's useless.
Example: If I budget $1500 for a tv, I have created an imaginary boundary for which to work with. The budget hence becomes completely useless if I decide to blow $5000 on a home theatre system.
Of course the budget will balance. No one generally wants to put together a budget that doesn't balance. Doing so is the equivalent of saying you want to operate with a flawed set of boundaries to work with (ie: spend more than you have or will receive on purpose). I guess you could even say it's the equivalent of a quantified business plan. Back to the home theatre example, no one will say, "I have $1500 in the bank for a TV, I will budget to spend $5000".
Not going to discuss fund accounting. It's pretty much the equivalent of consolidated statements though in a nutshell.
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Ya...i meant operating fund not operating budget. But thanks for the notes on how a budget works!
And no....fund accounting is not pretty much the equivalent of consolidated statements. Its actually the opposite almost conceptually in this case. There are separate funds for each activity...operating, venue development, etc. They are self balancing. The operating fund (the one mentioned in cbc article) is exactly balanced ("break-even!!!"), but this is achieved through funding ("revenues!!!") from another source ("the government...dammit"). And does not include the juicy stuff...the venue development costs which are shown in the Venue Fund. But you could consolidate them, and then it could result in a deficit at the government level depending on other fudgery pokery ("government owned assets!!!").