Budget Sheet

INTRODUCTION

Budget sheet is one of the various statements maintained by offices of Government of Nepal. It is also known as budget ledger. A budget sheet is the statement of annual appropriation, budget release and budget expenditures. It provides information of budget release, amount spent under each head of expenditure and the balance of bank. It also supports the financial administration. The format of budget sheet is mentioned in auditor general form number 8. The following information can be obtained from a budget sheet.

1. Annual Appropriation Budget Section
2. Budget Release Section
3. Budget Expenditure Section

1. Annual Appropriation

This is the upper part of the budget sheet. In this part, the annual budget approved for and allocated for different heads of expenditures are recorded in the column provided for each head. The budget sheet is prepared with the help of journal voucher but it is not necessary to prepare any journal voucher for the amount to be shown in this part. Supplementary budget and budget transfer are also shown in this section. This part helps the authorized officers to take necessary decision regarding expenditures.

2. Budget Release

It is the middle part of budget sheet. In this part, budget release are shown. In this part, it is necessary to prepare journal voucher for all transactions before they are posted into the concerned columns. Revolving fund release, transfer and supplementary budgets are also recorded in this part as in appropriation part. This part is closed by depositing the surplus amount into consolidated fund account in case of general budget or development budget at the end of fiscal year. The surplus budgets on each heads are shown within brackets in the concerned budget head columns to facilitate the closing.

3. Budget Expenditure

This is lower part of the budget sheet. In this part, all budgeted expenditures are recorded in their corresponding budget heads. Under this part, expenditures are posted based on journal voucher prepared for expenditures, advance budget, rectification of errors and petty cash expenditures at the time of its reimbursement are posted. At the end of each month, totals of each expenditure headings are calculated and the aggregate total of the previous month is added with that the total of current month to calculate the cumulative total of each heads of budgeted expenditures.

The following considerations should be kept in mind while posting into budget sheet:

• Only budget expenditures should be posted in budget sheet.

• Establishment of petty cash fund, deposit of deductions from salary, receipt or payment of loan and treatment of security deposit do not affect to the budget expenditure heads. Therefore, such items are not posted into budget sheet.

• Treatment of advance should be done in budget sheet just like in the bank cash book.

• Budget transfer should be shown in the release part not in expenditure part.

Closing Budget Sheet

Monthly closing:

All the books and accounts should be closed while preparing monthly report of operating level offices at the end of each and every month for report which is called closing budget sheet. In monthly closing, the columns for budget release under each heads are added to calculate the total budget release for the current month. This total is added with that of the previous months to calculate the cumulative total. Similarly, the columns of budget expenditure under each heads are added to calculate the sum of expenditures for the month and the total up to the last of previous month is added together so as to ascertain the gross total till the last date of closing of budget sheet. The total of expenditure part is deducted from the total of the part of release to find out the balance of budget out of the sum of release. The total of expenditure part of budget sheet should be equal to the amount shown by budget expenditure account of bank cash book.

Annual closing:

At the end of each fiscal year, the budget sheet is closed along with other books and statements. In process of closing budget sheet, a closing voucher should be passed and the total of release and the total of expenditure should be ascertained. All regular and supplementary budgets are added to ascertain total release and all total of expenditure from the fiscal year are calculated for expenditure and to bring the budget release and budget expenditure to zero, the totals amounts of budget release part and expenditure part are kept in bracket in each column. Then, the surplus amount is calculated by deducting the total of expenditures from the total of release. At last, the surplus amount if transferred to either the next year or freeze account or deposited into the consolidated fund with a closing journal voucher.

Preparation of Budget sheet

Under budget sheet, the transactions are posted on the basis of journal voucher. The journal voucher is prepared for budget release amount and budget expenditure but the journal voucher is not prepared for the annual appropriation of budget.

The expenditure made through petty cash fund and advance transactions are also recorded in budget sheet at the time of reimbursement. When the advance is cleared, the postings are made both within and outside the bracket. Advance given are treated in a similar manner as the budget expenses. The actual expenditure is posted outside the bracket and advance is posted inside the bracket This method will cancel the earlier advance payments and its place will be taken by the actual expenses.

ILLUSTRATION 1:

The following transactions related to the operating office are given to you:

Bhadra 3: Received a bank order and budget release order for actual expenditure of last month.
Bhadra 5: Issued a cheque of Rs.1500 as to section officer Mr. Hansa as advance for TA/DA.
Bhadra 9: Issued a cheque for purchase of Furniture Rs.7000.
Bhadra 18: Mr. Hansa submitted a bills of TA/DA Rs.1500 and his advance was cleared.
Falgun 30: Salary for the month of Rs.77000 was distributed after deducting provident fund of Rs.14000 and income tax Rs.10000.

Required: Budget Sheet

Solution:

References:

Sharma, Narendra et.al., Principles of Accounting-XI, Bundipuran Prakashan, Kathmandu

Koirala, Yadav Raj et.al., Principles of Accounting-XI, Asmita Books Publication, Kathmandu

Shrestha, Dasharaha et.al., Accountancy-XI, M.K. Prakashan, Kathmandu