10 Steps TO IMPLEMENTING BUDGET CONTROLS.

Budget controls establish clear spending boundaries, ensuring that a government doesn't spend more than the amount legally appropriated by its governing body--which promotes accountability and bolsters trust throughout the organization. Budget controls should be applied to all parts of the budget, including non-personnel, personnel, and capital budgets. Here's how.

1 Determine the level. The level of control should coincide with a segment of your chart of accounts. Options include fund, department, division, program, object, and/or project.

2 Decide on hard or soft budget controls, or a mix of both. A hard budget control doesn't allow an individual financial transaction (such as paying an invoice) to proceed if the budget doesn't have sufficient funds available to cover it. A soft budget control does allow the transaction to proceed, often with an alert to the requestor or a requirement for an additional level of approval.

3 Use purchase requisitions to pre-encumber funds in your financial system. Pre-encumbering funds helps ensure that budgeted funds will be available to pay for the goods or services being procured. Once approved, the requisition converts to a purchase order that encumbers the funds. Every purchase should either begin with a purchase requisition, or use a purchasing card.

4 Implement position control policies and procedures. Establish and maintain one list of budgeted positions for the entire organization that is updated regularly to indicate which positions are vacant and...