PurposeYou   will demonstrate your skills and knowledge by completing a scenario-based   project.Task   overview and contextYou   receive an email from Mike Booth, Managing Director: Financial

Purpose

You   will demonstrate your skills and knowledge by completing a scenario-based   project.

Task   overview and context

You   receive an email from Mike Booth, Managing Director: Financial Operations.

Subject:   Preparing for the new budgeting cycle

Hello,

The   new budgeting cycle is about ready to begin. It is a hectic time of the year   because we need to have all of the organisation’s budgets in place by the   beginning of the last quarter in the financial year. 

As   the Finance Manager for BizOps Enterprises, much of this workload will be   allocated to you.

I   have provided a list of tasks that you will need to perform throughout the   budgetary cycle in the ‘Instructions to the candidate’ section that follows. 

Regards,

Mike   Booth   Managing Director: Financial Operations

Instructions   to the candidate

You   will need to access and read the following BizOps Enterprises policies,   procedures, reports and templates:

• Budgeting and financial planning   procedures

• Company business plan

• Financial reports

• Cashflow worksheet and   assumptions

• Profit and loss worksheet   and assumptions

• Balance sheet worksheet and   assumptions

• Risk management policy

• Risk management procedures

• Risk management plan   template

See   the ‘Resources required’ section for how to access these documents.

Complete   the following tasks. 

1. Access and read the budgeting and   financial planning procedures to familiarise yourself with the   responsibilities and procedures of the budgetary process. Using this document   as a guide, prepare a plan and time line with critical dates for preparation   of the organisation’s budgets for the next financial year (2016/17). Assume   that it is now early March 2016.

2. Access and read the company business   plan. Note the business goals that are listed to maintain financial   stability. Put the financial information into a spreadsheet and prepare a   histogram that clearly shows the financial plan for the next five years. Use   the histogram and the supporting dot-points from the business plan to prepare   a one-page document that promotes the direction that future budgets will need   to take. 

3. Access and read the financial   reports, which have been collated from the organisation’s financial system.   Using these reports, prepare a report on the organisation’s current financial   position to guide the planning for budget preparation. This report needs to:

• demonstrate analysis of the:

­ net profit margin

­ net profit ratio

­ cashflow return on assets

­ return on owner’s equity ratio

• demonstrate horizontal analyses of the areas of the business that   have the greatest impact on the business’s profit or loss

• identify major variances in the profit and loss budget and explain   the likely impact on the business’s annual performance

• show the organisation’s current position in relation to the previous   years by summarising the cashflow trends

• contain a list of recommendations for ongoing maintenance of   financial viability.

4. Prepare preliminary 2016/17 budgets   for the whole organisation that align with the business plan objectives and   will set a framework for the budget committee to use through the budgetary   development process. The base information, worksheets and underlying   assumptions for each preliminary budget have been provided. It is preferable to   develop the budgets using spreadsheet software. The budgets that you need to   prepare include: 

• a forecasted cashflow budget for the 2016/17 financial year

• a forecasted profit and loss budget for the 2016/17 financial year

• a forecasted balance sheet as at 30 June 2017.

5. Access and read the risk management   policy and risk management procedures. Identify and assess key financial   risks to the organisation in achieving its objectives in the 2016/17   financial year. Develop a risk management plan, using the template, with   appropriate contingency responses for the factors that are identified as high   risk. The risk management plan should also contain contingency responses in   the event that the identified risk controls will not be sufficient to manage   the issues. Ensure that suitable triggers are identified to determine when   contingency responses should be implemented. 

6. Prepare a risk management plan to   ensure that the risk of funds misappropriation and discrepancies is   minimised. This risk management plan should identify the internal controls   relating to funds misappropriation and discrepancies.

7. Prepare a checklist that can be used   to review the effectiveness of BizOps’s budgeting and financial planning   procedures and helps to ensure compliance with organisational and statutory   requirements.

8. Develop and provide an audit   checklist to guide staff in collecting and assessing information to review   financial management software, managing risks of misappropriation of funds,   ensuring systems are in place to record all transactions, maintaining an   audit trail and complying with due diligence.

The   final documents you submit for assessment will be assessed using the project   criteria provided.

All   project criteria outlined must be covered satisfactorily for Part B to be   completed satisfactorily. 

You   must complete the project unassisted by the assessor or other personnel, but   may refer to reference material as needed.