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The New Zealand Railways Magazine, Volume 2, Issue 12 (April 1, 1928.)

Internal Budgetary Control of Railway Finances

Internal Budgetary Control of Railway Finances.

From the 1st April, 1928, the Department is bringing into operation for all branches a system of budgetary control.

Under this scheme a forecast of revenue and expenditure will be made for each four-weekly period. The controlling officer of each District and Branch and Division will submit estimates for all operations under his control. After these have been reviewed by the Divisional Superintendents, they will be dealt with by a special committee in Wellington, consisting of the Chief Accountant, Chief Mechanical Engineer, Chief Engineer, Superintendent of Workshops, and the General Superintendent of Transportation. These officers will go fully into the budget estimates of revenue and expenditure and will make such adjustments as the prevailing circumstances warrant. A master budget will then be prepared and submitted to the Board of Management.

When the master budget has received the approval of the Board, budget allowances will be issued accordingly for each Branch and District. Controlling officers will be expected to keep their expenditure within their allowances.

The new system will enable controlling officers to keep in closer personal touch with the financial side of operations in their District.

Budgetary control calls for continual alertness on the part of each controlling officer in checking up the expenditure of his District. Under the new system investigations will be made while the expenditure is actually going on instead of some weeks after the close of the period, when the official financial figures are available.

It is not contended that budgetary control will take the place of skilful management, but by increasing the responsibility of controlling officers it will ensure a much greater—because more direct—interest by them in the financial results of Departmental operations.

Intelligently prepared, these four-weekly estimates provide a forecast of the Department's finances as they should logically come to pass.

The responsible officers are expected to bring prominently under notice all factors that might tend to reduce efficiency, or to prevent the most economical performance of the Department's operations, in order that budget allowances may be checked up to ensure the adoption of the best practice.