Program budget-is a budget designed for program. A program is a set of related projects, auxiliary programs, and program activities directed in a coordinated manner to receive benefits not available them individually (Curtis E.M. 2018). Managing program activities, projects and subsidiary programs as a program increase the delivery of benefits. Programs supply their intended benefits through subsidiary programs and component project which are taken in order to produce outcomes and outputs. A program is a set of projects. If one of the projects under the program is not implemented, the program goal will not be achieved. Some projects under the program may be directly dependent on each other, other less or not at all. Project included in one program may use common resources, but they do not have to (Curlee W., Gordon R.L. 2014).
Program budget- meaning
The program budget is concentrated on the requirements related to the task. The program budget assigns resources to projects, which is useful in monitoring the performance of the project (Deschenes O., Greenstone M., Shapiro J.S. 2017). Budgeting supports implementation of all management functions, e.g. planning, motivating, organizing and controlling. Budgeting realize the planning process by setting goals and allocating resources and by seeking ways of working to achieve those goals. Budgeting help organize functions by forcing the implementation of appropriate organizational structures in such a way as to support the achievement (Letavec C.J. 2006). Properly prepared budgets also constitute one of the methods of motivating employees to comply with their goals company. Project cost management focuses on the costs of resources necessary to perform activities occurring under the project program. It can be extended by examining thee impact of expenditure incurred during the design and construction of the system on the effectiveness or efficiency of its work. The implementation of each project requires the involvement of specific resources, which will ensure that his goals are achieved. These resources will vary depending on the type of project, however, the implementation of each of them will always require the involvement of financial resources. The important problem is dividing available resources among all projects belonging to a given program (Meredith J.R., Shafer S.M. 2017).
Types of budget
- Cash Flow Budget
- Operating Budget
- Master Budget
- Static Budget
- Financial Budget
Program budget – advantages:
- it helps and allows in determining the correct priority of the projects
- it oversees the allocation of resources to a venture and establishes how they are used to
- it supports in managing and planning the delivery of services in the future work
- it helps to identify areas with a financial gap
- it increases the level of responsibility in the organization, because each project has an appropriate budget on which to measure results.
Program budget – disadvantages:
- the program budget is time-consuming and requires a lot of information about financial resources required
- sometimes overlapping causes a number of budget changes, which can result in double budgeting of expenses
- the occurrence of errors in the program budget may increase costs.
- Curlee W., Gordon R.L. (2014) Successful Program Management. Complexiry Theory, Communication and Leadership. Best Practise and Advances in Program Management Series, CRS Press
- Curtis E.M. (2018) Who Loses under Cap-and-Trade Programs? The Labor Market Effects of the NOx Budget Trading Program, Review on Economic and Statistics vol.100 issue.1
- Deschenes O., Greenstone M., Shapiro J.S. (2017) Investments and the Demand for Air Quality: Evidence from the NOx Budget Program, American Economic Review vol. 107 no. 10
- Letavec C.J. (2006),The Program Management Office, Establishing, Managing and Growing the Value of a PMO, J.Ross Publishing
- Meredith J.R., Shafer S.M. (2017) Project Management A Strategic Managerial Approach, Wiley
Author: Justyna Niemiec, Paulina Jurusik, Aleksandra Marcinkowska