Budget controller Flashcards
(3 cards)
In calculating the budget for your project, how do you know that the figures you provide come close to the actual costs? Explore using Lewis (2013).
Lewis (2013) describes two key budgeting methods:
1) Incremental budgeting
This involves taking a previous year’s budget and adjusting it slightly. It’s quick and simple but often keeps old inefficiencies and isn’t detailed enough for new or unique projects—especially in health promotion or NGO settings.
2) Zero-based budgeting
With this method, you start from scratch and calculate all costs based on your actual plan. It’s much more accurate because every cost is directly linked to a real activity. This approach is especially recommended for NGO or public health projects, where activities are clearly defined.
A variation of this is activity-based budgeting, where the budget is built directly around planned actions—such as workshops, meetings, transport, and materials. Both approaches help produce realistic budgets that reflect what’s actually happening in the project.
In our project, we used a zero-based and activity-based budgeting approach. That means we started from scratch—not using past budgets—and broke everything down based on the activities we planned to implement.
To do this, we asked ourselves a series of practical questions:
* What is the overall goal of our project?
* What specific activities are needed to reach that goal?
* What resources will those activities require?
* What will those resources cost?
* Where will the funding come from?
* And finally: is this budget realistic?
As an example, we calculated the cost of running nutrition and physical activity workshops in three high schools in Aarhus. These were planned in collaboration with Steno Diabetes Center. Each cost—whether for materials, transport, or staffing—was directly linked to a specific activity.
We also broke the project down into smaller tasks: planning, communication with partners, workshop design, implementation, evaluation, and follow-up. For each task, we estimated the number of hours required and applied a realistic hourly rate based on student project work. For example, my own role as project manager was budgeted at 220 DKK/hour for 60 hours, which resulted in a justified and transparent cost estimate.
In line with Lewis’ recommendations, we made sure our assumptions were realistic and documented. As he writes:
“All estimates must be justified, especially for staff costs” (Lewis, 2013, p. 39).
So we checked current prices for materials and transport, and asked partners for input on external costs like honoraria or expert time. This also follows Lewis’ advice on bottom-up budgeting, where those involved in implementation help define the budget to make it more accurate.
What is a WBS according to Davies (1995)? Elaborate in what circumstances is it appropriate to add budget figures to a WBS?
Work Breakdown Structure (WBS) is a fundamental tool in project planning. The purpose of the WBS is to ensure completeness, compatibility, and continuity across all project tasks.
A WBS consists of multiple levels. Davies describes it as a kind of family tree that structures the overall scope of the project. Each descending level provides a more detailed description of the project elements: the higher the level, the more general; the lower the level, the more specific.
1) Level 1 describes the entire program and is used for approval and release of all work
2) Level 2 consolidates budget information for each major project part
3) Level 3 is used for task planning
These three levels are typically defined by the client, while lower levels are usually developed by contractors for internal management. At the lowest levels are work packages assigned to specific individuals or organizations, used to control workflows.
When is it appropriate to add budget figures to a WBS?
It is appropriate to include budget figures in the WBS once there is sufficient information and task detail to make reliable estimates of time and costs. According to Davies (1995), budget figures make the most sense at the middle and lower levels of the WBS, for example:
At Level 2, budget data are aggregated for larger project parts
At Level 3 and below, budget figures are used for planning and tracking specific tasks, such as work packages
For budgeting to be meaningful, the following criteria must be met:
- The task or package must be clearly defined and measurable
- It must be possible to estimate time and costs
- The task must be sufficiently scoped so that one person or unit can take responsibility
- Tasks should typically represent between 0.5% and 2.5% of the total project budget, detailed enough to be manageable but not so small as to become administrative micromanagement
Davies also emphasizes avoiding adding budget figures too early, for example at the project start when work is still unclear. Early estimates without enough knowledge risk under- or overestimating costs, leading to errors in financial control.
It is also important to separate administrative tasks from direct deliverables in the budget to ensure clarity on actual spending.
Finally, the level of budget detail should be considered based on the project’s complexity, number of suppliers, and financial reporting requirements.
Analyse the chapter on Conducting Needs Assessment Surveys in The
Community Toolbox (nd.). What kinds of factors did/would you consider in
calculating a budget for such an activity?
A needs assessment survey is basically a way to ask people in a group or community what they think are the most important needs for them.
There are a few things to consider when planning the budget. For example:
* Time
* Method
* Number of participants
* Staff
* Materials
* Testing
* Data analysis
* Sharing the results
The more complex the survey is, the more expensive it usually gets.
Here are some factors to consider:
1) First of all, the timeframe plays a big role. How long do you have to complete the survey? A short timeframe can mean that you have to hire more people to work quickly, which increases labor costs. Conversely, a longer timeframe can also result in higher overall costs because staff have to be paid over a longer period of time, and there may be a need for repeated follow-ups and analyses.
2) The size of the target group is another important factor. How many people should be included in the study? If you want a large, representative sample, it requires more resources to distribute questionnaires, follow up on missing responses, and process the data. This may mean the need for more interviewers, more printed questionnaires, or greater digital capacity. In our project, we chose to limit the sample to a representative subgroup in order to keep costs down, while still ensuring that the data was meaningful and useful.
3) The method of data collection has a significant impact on the budget. Face-to-face interviews are often more expensive because interviewers must be paid, trained, and each interview can take a long time. Telephone interviews fall somewhere in between, while written questionnaires—especially online—are typically cheaper but may have lower response rates. In many projects, it is therefore obvious to choose online questionnaires, as we also did, in order to minimize both time consumption and material costs. However, this requires that the target group has access to the internet and is able to handle the digital format.
4) Personnel is one of the biggest budget items. Will the entire process be managed by internal staff, or will external consultants be needed? For example, experts may be needed to design the questionnaire so it is both valid and relevant, or to help analyze complex data. In our case, we were responsible for both developing and analyzing the questionnaire, which saved resources.
5) Materials and equipment also play a role. If physical questionnaires are used, printing, copying, and postage must be included in the budget, while electronic systems may require software licenses or payment to platforms that manage online surveys.
6) Testing and revision of the questionnaire is a step that many underestimate, but it is important for both professional and economic reasons. A pilot survey can reveal unclear questions, technical issues, or time demands that need adjustment before the final launch. This takes time and resources, but it can save costs by avoiding invalid data or the need for an expensive re-collection.
7) Analysis and reporting can also require significant resources, especially if complex data needs to be processed statistically. Professional assistance may be necessary if you don’t have the right expertise yourself. The results must then be presented in an understandable way, both to professionals and to those involved in the community, which may require reports, presentations, or infographics to be created.
8) Finally, costs related to dissemination and follow-up must be considered. Sharing the results with the target group or stakeholders, e.g., through workshops or information meetings, is often an important part of the process to ensure the study actually leads to action.
