The Australian National Audit Office has published a Better Practice Guide for Federal agencies on developing and managing internal budgets, updating and replacing a previous Guide issued in April 2006.
Recognising the environment in which entities operate is constantly changing, the Guide addresses some of the issues faced by agencies.
In particular, it includes material relating to agency’s whole-of-government reporting responsibilities. The trend towards a whole-of-government approach (including coordinated procurement) has been a feature of the Rudd Government.
Other issues addressed in the Guide include enhancements to accounting standards and changes to the Government’s financial framework.
Internal budgets show an organisation’s expected financial performance, financial position and cash flows disaggregated by area of responsibility. According to the Auditor General, effective financial management is critical to public sector entities being able to meet their policy and service delivery responsibilities and their financial accountability obligations.
The purpose of the Better Practice Guide is to assist organisations to better manage internal budgeting activities. It includes a range of principles and techniques designed to embed internal budgeting in an organisation’s planning, control and accountability systems.