What is a Budget Committee
A budget committee is a group of people that creates and maintains fiscal responsibility for an entity or organization. In a company, this committee usually consists of the top management and the CFO. Budget committees typically review and approve departmental budgets that are submitted by the various department heads. The budget committee may also create and edit the budget manual, which is a complex set of instructions used by large organizations to prepare budgets.
BREAKING DOWN Budget Committee
A budget committee is a group that creates and oversees the standards for, practices to implement, and maintenance of an organization's fiscal responsibility. Budget committees play key roles in the success or demise of a company or other corporate entity. The budget committee has a unique perspective in that they are privy to all fo the financial comings and goings of an organization. They see the whole picture whereas people in individual departments only see their segment of the company. Committees that are able to keep their organizational budgets on track ensure smooth operation and financial solvency. Organizations that cannot, soon encounter financial problems. Financial problems often have a negative effect the valuation of a company.
Example of a Budget Committee
For example, the budget committee for Wendell's Widget Makers Inc is in charge of overseeing the yearly budget formation for every department within the organization and approving the budgets. The committee is the only entity within the organization that sees the whole financial picture of the firm. They maintain the budget manual and make sure the departments are adhering to their submitted yearly budgets.