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Elements and Performance Criteria

Required Skills

This section describes the essential skills and knowledge and their level required for this unit

The following skills must be assessed as part of this unit

planning and organisational skills to organise a timely efficient and consultative budget development process

communication and negotiation skills to liaise with colleagues on potential complex and conflicting budget development issues

critical thinking and problemsolving skills to develop different options for addressing budgetary challenges

literacy skills to interpret and analyse information that deals with complex ideas and concepts

numeracy skills to interpret and analyse financial information including forecasts and previous performance data and to develop financial estimates and scenarios

The following knowledge must be assessed as part of this unit

role and nature of the budget development process within different businesses and contexts

accounting terminology principles and practices relevant to budget preparation in any context and for different types of budgets

budget preparation and monitoring principles practices and techniques including

information required for budget preparation

components of a budget and a budget performance report

techniques for making budget estimates

type of supporting information required

use of software for preparing and monitoring budgets

how to present budgets and budget reports

budget deviation management including common reasons for deviations

regulatory issues that may impact on budget development in the relevant work context

Evidence Required

The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria required skills and knowledge the range statement and the Assessment Guidelines for this TrainingPackage

Critical aspects for assessment and evidence required to demonstrate competency in this unit

Evidence of the following is essential

understanding of the technical processes and procedures that must be followed in budget preparation

sound analysis of the factors that impact the budget and budget development process

ability to prepare realistic and accurate budgets within relevant workplace context

preparation of multiple budgets to meet specific and differing workplace needs

project or work activities conducted over an operationally realistic period of time so that the planning and evaluation aspects of preparing and monitoring a budget can be assessed

Context of and specific resources for assessment

Assessment must ensure

involvement of multiple stakeholders in the budget development and monitoring process

use of industrycurrent technology for the budget preparation and evaluation process

Methods of assessment

A range of assessment methods should be used to assess practical skills and knowledge The following examples are appropriate for this unit

evaluation of budgets versus financial performance of projects managed by the candidate

evaluation of reports produced by the candidate detailing the processes undertaken to develop a budget

direct observation of the candidate providing a briefing or negotiating on a proposed budget

case studies and problemsolving to assess application of the principles of budget preparation and evaluation to different situations

review of portfolios of evidence and thirdparty workplace reports of onthejob performance by the candidate

Holistic assessment with other units relevant to the industry sector workplace and job role is recommended for example

SITXFINA Manage finances within a budget

SITXFIN004A Manage finances within a budget.

Assessing employability skills

Employability skills are integral to effective performance in the workplace and are broadly consistent across industry sectors How these skills are applied varies between occupations and qualifications due to the different work functions and contexts

Employability skills embedded in this unit should be assessed holistically with other relevant units that make up the skill set or qualification and in the context of the job role

Range Statement


The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording in the performance criteria is detailed below.

Data and data sources required for budget preparation may include:	performance data from previous periods financial proposals from key stakeholders financial information from suppliers customer or supplier research competitor research management policies and procedures organisation budget preparation guidelines declared commitments in given areas of operation grant funding guidelines or limitations.

Budgets may include:	cash budgets departmental budgets wage budgets project budgets event budgets sales budgets cash flow budgets grant funding budgets budgets for micro, small, medium or large businesses.

Internal and external factors that could impact on budget development may include:	organisational and management restructures organisational objectives new legislation or regulation growth or decline in economic conditions significant price movement for certain commodities or items shift in market trends scope of the project venue availability and cost (for events) human resource requirements.

Financial reports may include:	periodic reports showing budget versus year-to-date actuals and financial commitments periodic sales reports taxation commitments funding acquittals in relation to grants received.