St Luke's Church Eccleshill - Articles from "The Link"

The unbalanced budget

The King of Eckland did not take a keen interest in the finer details of the kingdom’s finances. He would rather spend his time on ceremonial occasions and foreign policy, and he left the details of money to his trusted Chancellor and Secretary.

They kept to the tradition that the budget should always show a 5% surplus, so as to give a healthy picture of the kingdom’s prospects. But one year the two officials couldn’t get the budget to show this surplus.

“I know,” said the Chancellor. “Let’s make up the difference by increasing the amount of fundraising in the budget.” So they did.

A short while later the King discovered that the President of Barkerland had a full-time personal assistant, a limousine and a driver, all paid for out of state funds. He looked at the budget and found a 5% surplus forecast for the year - ample to pay for two extra staff and a car. He hired them and bought the car on the spot.

Three months down the line, the Paymaster General was unable to pay the staff salaries. Fundraising was far below what the budget said it should be. The King demanded an explanation from the Chancellor. “We only put that figure in to make the budget show the 5% surplus,” replied the Chancellor. “It wasn’t money for you to spend!”

The King had a forgiving nature, so he promoted the Chancellor to Head of Pigsty Cleaning Operatives instead of executing him. This made him feel better, but didn’t answer his basic question:

Where did it all go wrong?

What is a budget for? The crisis came about because the budget was a publicity device to make the kingdom look good, rather than a tool for managing money. It wasn’t created to base expenditure decisions on.
Communication. A budget should involve all the people, and gain everyone’s acceptance. But the King wasn’t consulted, so he didn’t understand it. When he committed the kingdom to expenditure not covered by the budget, he showed he didn’t accept it either.
Realism. If the court officials had compared the budget with the previous year’s actual income, they’d have seen that the fundraising figure was fictional, and reduced it.
Monitoring. There’s nothing wrong with spending extra if your income has risen, but someone should have watched to see if the income matched what the budget said. That way the shortfall in fundraising would have been spotted.

Adapted from “The Balanced Sheet” issue 7, BALCAS

	*St Luke's Church, Eccleshill - The Link* magazine** The Link is published monthly at 40p (Senior Citizens 35p), and we deliver free within the parish and post copies (at the reader's expense) to those who request it. Please contact us if you would like a free copy for a trial period. June 2003, Page 4.
Home Page. Index of articles. Money: index, Clergy pay, Pay for roof, Envelopes, Stewardship, Budget. In this issue: (June 2003) Vicar's Letter, Injustice, Budget, CTNB, Unchurched.	The unbalanced budget The King of Eckland did not take a keen interest in the finer details of the kingdom’s finances. He would rather spend his time on ceremonial occasions and foreign policy, and he left the details of money to his trusted Chancellor and Secretary. They kept to the tradition that the budget should always show a 5% surplus, so as to give a healthy picture of the kingdom’s prospects. But one year the two officials couldn’t get the budget to show this surplus. “I know,” said the Chancellor. “Let’s make up the difference by increasing the amount of fundraising in the budget.” So they did. A short while later the King discovered that the President of Barkerland had a full-time personal assistant, a limousine and a driver, all paid for out of state funds. He looked at the budget and found a 5% surplus forecast for the year - ample to pay for two extra staff and a car. He hired them and bought the car on the spot. Three months down the line, the Paymaster General was unable to pay the staff salaries. Fundraising was far below what the budget said it should be. The King demanded an explanation from the Chancellor. “We only put that figure in to make the budget show the 5% surplus,” replied the Chancellor. “It wasn’t money for you to spend!” The King had a forgiving nature, so he promoted the Chancellor to Head of Pigsty Cleaning Operatives instead of executing him. This made him feel better, but didn’t answer his basic question: Where did it all go wrong? What is a budget for? The crisis came about because the budget was a publicity device to make the kingdom look good, rather than a tool for managing money. It wasn’t created to base expenditure decisions on. Communication. A budget should involve all the people, and gain everyone’s acceptance. But the King wasn’t consulted, so he didn’t understand it. When he committed the kingdom to expenditure not covered by the budget, he showed he didn’t accept it either. Realism. If the court officials had compared the budget with the previous year’s actual income, they’d have seen that the fundraising figure was fictional, and reduced it. Monitoring. There’s nothing wrong with spending extra if your income has risen, but someone should have watched to see if the income matched what the budget said. That way the shortfall in fundraising would have been spotted. Adapted from “The Balanced Sheet” issue 7, BALCAS
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