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Evidence Guide: SITXFIN005A - Prepare and monitor budgets

Student: __________________________________________________

Signature: _________________________________________________

Tips for gathering evidence to demonstrate your skills

The important thing to remember when gathering evidence is that the more evidence the better - that is, the more evidence you gather to demonstrate your skills, the more confident an assessor can be that you have learned the skills not just at one point in time, but are continuing to apply and develop those skills (as opposed to just learning for the test!). Furthermore, one piece of evidence that you collect will not usualy demonstrate all the required criteria for a unit of competency, whereas multiple overlapping pieces of evidence will usually do the trick!

From the Wiki University

 

SITXFIN005A - Prepare and monitor budgets

What evidence can you provide to prove your understanding of each of the following citeria?

Prepare budget information.

  1. Determine and confirm scope and nature of budgetary planning activity with relevant colleagues.
  2. Identify, access and interpret data and data sources required for budget preparation.
  3. Analyse internal and externalfactors for potential impact on budget.
  4. Provide relevant colleagues with adequate notice of the opportunity to contribute to the budget planning process.
Determine and confirm scope and nature of budgetary planning activity with relevant colleagues.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Identify, access and interpret data and data sources required for budget preparation.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Analyse internal and externalfactors for potential impact on budget.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Provide relevant colleagues with adequate notice of the opportunity to contribute to the budget planning process.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Prepare budget.

  1. Draft budget, based on analysis of all available information and according to organisation policy.
  2. Estimate income and expenditure and support with valid, reliable and relevant information, including income and expenditure for previous time periods.
  3. Assess and present options where appropriate.
  4. Present recommendations clearly, concisely and in an appropriate format.
  5. Reflect organisation objectives appropriately within the draft budget.
  6. Circulate the draft budget to appropriate individuals for comment.
Draft budget, based on analysis of all available information and according to organisation policy.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Estimate income and expenditure and support with valid, reliable and relevant information, including income and expenditure for previous time periods.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Assess and present options where appropriate.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Present recommendations clearly, concisely and in an appropriate format.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Reflect organisation objectives appropriately within the draft budget.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Circulate the draft budget to appropriate individuals for comment.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Finalise budget.

  1. Negotiate budget according to organisation policy and procedures.
  2. Agree and incorporate modifications accurately and in consultation with colleagues.
  3. Complete final budget in required format within designated timelines.
  4. Inform colleagues of final budget decisions and their application within the relevant work area, including reporting and financial management responsibilities.
Negotiate budget according to organisation policy and procedures.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Agree and incorporate modifications accurately and in consultation with colleagues.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Complete final budget in required format within designated timelines.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Inform colleagues of final budget decisions and their application within the relevant work area, including reporting and financial management responsibilities.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Monitor and review budget.

  1. Review budget regularly to assess actual performance against estimated performance and prepare accurate financial reports.
  2. Incorporate all financial commitments promptly and accurately into budget and all budget reports.
  3. Investigate and take appropriate action on significant deviations.
  4. Analyse changes in the internal and external environment during budget review, and make adjustments accordingly.
  5. Collect and record relevant information to assist in future budget preparation.
Review budget regularly to assess actual performance against estimated performance and prepare accurate financial reports.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Incorporate all financial commitments promptly and accurately into budget and all budget reports.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Investigate and take appropriate action on significant deviations.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Analyse changes in the internal and external environment during budget review, and make adjustments accordingly.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Collect and record relevant information to assist in future budget preparation.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Assessed

Teacher: ___________________________________ Date: _________

Signature: ________________________________________________

Comments:

 

 

 

 

 

 

 

 

Instructions to Assessors

Evidence Guide

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 Training Package.

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 industry-current 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 problem-solving to assess application of the principles of budget preparation and evaluation to different situations

review of portfolios of evidence and third-party workplace reports of on-the-job performance by the candidate.

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

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.

Required Skills and Knowledge

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 problem-solving 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.

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.