Answer to Question #200043 in Macroeconomics for Ntsika

Question

Define expenditure control measures

Answer 1

Expenditure control ensures resources are used as planned, within the acceptable limits, and within the budget. To ensure this, the following measures are put in place:

Expenditure Budget.

Preparing an expenditure budget is the first step. The budget outlines the projects and how the financing should be done over a while.

Request for Funds.

Once projects are approved, appropriation of funds should be requested. This request may be for the original budget, additional funds, and a substituted new project.

Variance Analysis

This compares actual performance with the estimates and deviations noted, analyzed, and reported. When the actual cost is expected to exceed original estimates, a formal request for plan revision or for capital addition is made. Regular reports ensure better control of the project at hand. This is the key task in expenditure control.

Follow Up.

This helps management identify areas of weakness. It identifies savings and overspends in a project.