Budget manualContents Page 1 Background 1 The strategic planning cycle Why plan? 2 3 Annual planning timetable Annual operating plan (AOP) and local operating plans (LOPs) 1 3 Preparation Monitoring Evaluation 4 How do I prepare my revenue budget? 4 Method Evidence and justification Challenge process Phasing Evaluation 5 How do I prepare my capital budget? 6 How do I prepare my staff budget? 7 How do I manage my revenue budget? 6 6 6 Control Monitoring Variance analysis Forecasting Planning Decision–making Evaluation 8 How do I manage my capital budget? 9 How do I manage my staff budget? 10 Overall Budget 13 13 13 11 Allocation of costs to funders 12 Glossary 14 15 1 Background (Back to Contents) 1.1 The strategic planning cycle Budgeting is just one of a number of tasks involved in the strategic planning of QAA. The following details the cycle of events, which in turn generates QAA’s Annual Operating Plan, Group Local Operating Plans and then the budget of QAA. Mission Key purposes Organisational appraisal Environment appraisal Strategy Objectives Evaluation Annual Operating Plan and Local Operating Plans Forecast Budget Variance analysis Management accounts Annual and Local Operating Plan monitoring Strategic planning is a continuous cycle and includes the systematic analysis of QAA and the environment in which it exists. The Strategic Plan sets the overall medium to long term (three to five years) direction of QAA, by setting out the strategies, objectives and targets for this period. 1 costs and performance management to QAA Groups. draft AOP and budget. January to early-April: Groups develop their LOPs and draft budgets. Identifies the funding required from Funding Councils. The Board has delegated responsibility to QAA Scotland for the development and monitoring of the plans and budgets for the QAA’s work in Scotland 1. Aids monitoring. Encourages value for money. Mid February: initial summary QAA AOP. Responsibility for development of QAA’s AOP and annual budget and performance monitoring lies with the Exec. The Board signs off the AOP and budget. Directors report to Exec on Groups’ monitoring against their plans. Coordinate activities of different Groups and functions within Groups. Mid April –Early May: budget finalisation/clarification with Finance then budget challenges with budget holders and Exec. Sets targets to measure performance against.2 Why plan? Sets the overall direction of QAA. May: Exec signs off LOPs. considered by Exec. risks. The Exec has delegated the responsibility for detailed identification of activities. Mid February: outline Group LOPs received by Exec. (Back to Contents) 2 Annual planning timetable By mid December: Priorities statement by the Exec. February Board meeting: initial summary AOP considered by the Board (and then selected stakeholders). Provides documentation of plan and achievements and aids preparation of QAA reports both internally and externally. subscribers and any other partners. the aggregate of which will form QAA’s Annual Operating Plan (AOP). Early April: Completed group LOPs and draft budgets received by Exec. Responsibility for QAA’s plans lies with the Board. developed from Group LOPs. June Board meeting: Draft QAA AOP and budget.The objectives and targets of the Strategic Plan are converted into Local Operating Plans (LOPs). The LOPs detail annual tasks and desired outcomes for the current year in order to achieve those objectives and targets set out in the Strategic Plan. 2 . A systematic approach. The LOPs are costed and aggregated to form QAA’s budget. achievable. 31 Jan. That process will need to deliver Group LOP and budgets. including staff development. A more specific timetable will be issued in December each year as part of the planning framework. showing: whether or not the performance measures have been achieved by the target date significant issues/problems 3 .1 Preparation Groups are responsible for determining their own intra-Group planning process. together with an identified risk owner and details of how these risks are being managed resource implications. by exception. The planning framework each year sets out the level of detail required in the LOP which will include: linkage with the Strategic Plan the tasks to be achieved lead responsibilities the desired outcomes (including effective performance measures. Each Group Head is responsible for establishing the mechanisms for monitoring achievement against the Group’s LOP. (Back to Contents) 3 QAA’s Annual Operating Plan (AOP) and Local Operating Plans (LOPs) 3. It is the responsibility of Group Heads to organise the work of their Group in order to achieve these deadlines. measurable. These must fit in with QAA’s overall annual timetable. and with milestones to facilitate monitoring) risks associated with each activity. By 31 July: Contracts signed and subscription levels agreed. June-July: Negotiations with funders and representative bodies. realistic. Each quarter. and timebound] where appropriate.2 Monitoring The summarised AOP is monitored quarterly (31 Oct. Groups will work within the general framework set by the current Strategic Plan and in the light of a statement prepared by the Exec setting out the priorities for the coming year. who can provide support with the process. 30 Apr and 31 Jul) through the Exec. SMART [specific. each Director will be required to confirm to the Exec that their Group LOP has been robustly and systematically monitored and provide Exec with a written summary. 3. The format of LOPs may be determined at local level but will need to be sufficiently detailed to allow challenging and monitoring of both cost and activity and provide the material for development of a QAA-wide AOP and budget. Group timetables are coordinated with the Management Accountant. A method of budgeting whereby all activities are reevaluated each time a budget is set. Some example questions. The Budget Holder could be the Group Head but is likely to be a nominated individual who has day-to-day responsibility for preparing and monitoring of a particular budget in accordance with these guidelines. together with information on how the current budget is working.1 Method QAA will produce its budgets every year using one of the following techniques: Evidence-based budgeting. experience gained and best estimates of volumes and types of activity. has responsibility for ensuring that budgets within their area are prepared and monitored in accordance with these guidelines. Each activity is justified and considered on a cost v benefit basis. who is the Group Head. are as follows: does the activity need to be carried out? does the activity need to be carried out this way? what would be the consequence if the activity were not carried out? how far does the activity benefit the organisation? 4 . Zero-based budgeting takes away the implied right of existing activities to receive a continued allocation of resource ie budgeting from scratch. This will draw on evidence in the current year i. significant variances and the reason for the variances revised target dates/performance measures. In implementing zero-based budgeting. 4. budgetary implications details of any corrective action necessary. The following steps are covered in this manual: Method Evidence and justification Unfunded reserves Clarification and finalisation stage (with Finance) Challenge process Phasing Evaluation The Budget Head. to be applied to each activity/process. contracts issued records management (Back to Contents) 4 Budget preparation (revenue) Budgets should be prepared in accordance with this Budget Manual and QAA’s Financial Regulations (approved by the Board). Zero-based budgeting. Discrete levels of each activity are valued and a combination of these is chosen to match funds available.e. There will need to be evidence and justification to support all figures in the budget. the Budget Holder and Budget Head must challenge existing practices and expenditure and develop a questioning attitude. The Budget Head will be responsible for ensuring that all budgets are prepared. this will be decided upon each year according to available funds. 4.4 Clarification and finalisation stage Prior to the Exec budget challenge. The members of Exec will challenge each other as to the robustness of their budgets. Finance will support Budget Holders in the preparation of budgets. and to ensure that the overall budget of QAA remains realistic and achievable. is the current level of provision adequate? are there alternative ways of providing the provision? how much should the activity cost? is the expenditure worth the benefits achieved? It is expected that full zero-based budgeting will be used at least every five years to ensure that inefficiencies have not crept into budgets. Budgets will be prepared in accordance with the annual planning timetable. These will form the basis for the challenge process. The Budget Holder will be responsible for preparing budgets for the areas for which they are responsible. 4. 4. Justification of budgets will be by reference to specific activities or in order to support activities detailed within the LOPs or the AOP.3 Unfunded reserves There may be instances where specific activities are funded through reserves. to check that the evidence is reliable and robust. 4.5 Challenge process Budgets will be subject to a challenge process by Exec. a meeting will take place between Budget Holders and Finance to clarify and finalise the budget. Evidence of budgets will be by reference to current cost information or other relevant information in support of amounts included within the budgets. the specific timetable will be issued in December each year for that year’s planning cycle.2 Evidence and justification In determining budgets it is important that the Budget Head and Budget Holders are able to justify their budgets and provide evidence of the underlying cost assumptions. 5 . The challenge will ensure that budgets are consistent with LOPs and the AOP. Zero-based budgeting will also need to be used for new activities or where the evidence-based budget of the previous year has proved significantly inaccurate. Finance will support this process by providing relevant comparison information and other current cost information. This will be the opportunity to challenge the proposals prior to including them in the budget. These proposals will be presented to Exec in late March. to include likely start dates. The phasing of budgets should be consistent with dates contained within LOPs and the AOP. secondments and any other staffing changes. Proposals for any likely new or continuing HRPs should also be submitted. Proposals for new posts will include a written case outlining why the posts are required. For Information Systems equipment this will be coordinated through the Information Management Group (IMG). to allow staffing and financial resources to be allocated.7 Evaluation Budget procedures will be reviewed at both the Group and QAA level to identify areas of good practice and areas where improvements can be made.4. A plan for each capital project will be set (by Information Systems for Information Systems projects and Office Services for office furniture) including the month in which expenditure will be incurred. Finance can help with this process if required. Directors will also include any proposed reductions in staffing requirements. (Back to Contents) 6 Budget preparation (staffing) The staffing budget will be coordinated by the Head of HR. Equipment replacement budget will be approved annually and should be prepared as part of the budgeting process. (Back to Contents) 5 Budget preparation (capital) Capital projects will be approved by the Board and the Director of Administration will act as Budget Holder. Application will be made to the Exec to seek approval of capital projects. The phased budgets should be communicated to Finance by August each year. to include proposals for new posts. as the management accounts are produced monthly.6 Phasing It is the responsibility of the Budget Holders to profile their budgets into calendar months. but will be the joint responsibility of each budget holder and Head of HR. Requests for office furniture will be coordinated by Office Services. 6 . Each project will be approved on an individual basis and virement between capital projects is not permitted. 4. HR and Finance will prepare a staffing plan/budget based on the proposals. according to the date that the expenditure is most likely to be incurred. Full costs of projects will be reported if the project spans different financial years. The review will take place each year prior to the setting of the following year’s timetable. extensions to temporary contracts. Directors will discuss staffing requirements with HR by mid March. However.1 Control The Financial Regulations detail the following responsibilities of Budget Holders: the control of income and expenditure within an agreed budget allocation is the responsibility of the designated Budget Holder who must ensure that the day-today monitoring is undertaken effectively Budget Holders are responsible to their Group Head for the income and expenditure appropriate to their budget allocations. This will ensure that all the necessary information is recorded to administer the vacancy/change of contract and that there is an effective audit trail. Budget management involves working within the costed plan of activities (budget). The Budget Head must satisfy himself that the budgets are being monitored effectively and retain overall responsibility for all budgets within his Group. variances investigated and out-turn positions determined the necessary corrective action is undertaken when it becomes known that budgetary targets will not be met any overspend must comply with the procedures detailed below Finance is kept up-to-date on any potential overspends or underspends as soon as these become apparent. staffing approval forms will need to be completed prior to proceeding with recruitment or variation of employment contracts and submitted to Executive for information. The Financial Regulations state further that: Budget Holders are responsible for ensuring that: their budget allocation is used for the purposes for which it has been allocated their budget allocations are monitored. Budget Holders are responsible for monitoring of their own budgets. (Back to Contents) 7 Budget management The Head of Group (Budget Head) has overall responsibility for budgets within his area.The sign off of the budget in May confirms the staffing budget and there will be no need for further Executive approval of posts. taking corrective action as appropriate and revising expectations in the light of latest information and covers the following areas: Control Monitoring Variance analysis Forecasting Planning Decision making Evaluation 7. 7 . The usual process for application or extension of HRPs will be followed. It involves investigating reasons for variances from budget. The following chart details the questions that the Budget Holder must consider before committing any expenditure: 8 .Budget Holders therefore need to control income and expenditure in order to comply with the financial regulations. Can only be funded if monies vired or invoiced from elsewhere.Revenue expenditure Is the expenditure activity / item included in the original budget? and greater than £500 Yes No Will the expenditure be greater than £500 of that contained within the original budget? Is it expenditure on a new activity not approved as part of the planning process (in AOP)? Yes No Yes No Is the excess expenditure to be vired from another budget? Spend in accordance with procedures Underspends need to be recorded and reported through the management accounts Is expenditure >£2000 and or 10 person days? No Yes Is expenditure on existing planned activity. (By virement or externally). Complete ‘Advanced Notification of Unbudgeted Expenditure’ Form (See virement rules) Exec approval required if >£5K or 2% of overall budget 9 . Ensure Finance informed (asap) complete advanced notification of unbudgeted expenditure form. which will become overspent? Yes No Do not proceed Yes Complete new activity proposal form for approval by Exec NB This expenditure will only be approved if there is identifiable income to fund this activity. may be authorised by the budget holder and countersigned by the appropriate Director. at the end of each month management accounts are circulated via Executive Desktop to Budget Heads and Budget Holders that consist of: a summary statement (showing current month activity and year to date activity against budget). coding lists are available from the intranet. advanced notification of unbudgeted expenditure.000 and requests from reserves must be approved in advance by Exec. All virements exceeding £5. It is important that the Budget Holder reviews both the summary report and the detailed transaction report to ensure that transactions have been coded to the correct cost centre and account code. These are as follows: from a virement – identified amounts of underspends within budgets can be used to fund additional expenditure on budgeted activities. To facilitate this monitoring. details of transactions can be obtained by drilling down through the reports The summary report will highlight budget lines that have a variance greater than + or – 15% YTD. from the reserves – requests can be made for unbudgeted expenditure to be funded from the reserves. Invoices and claims must be coded correctly and passed promptly to Finance for payment. A detailed cumulative report will be provided to the Executive Committee. These requests should then be submitted to the Head of Finance. Virement should be considered in the first instance. Requests for unbudgeted expenditure of less than £500 do not require authorisation.2 Monitoring Budget Holders need to undertake effective monitoring of their budgets. It is important that particularly early on in the year. subject to approval by Exec.The following forms listed in the flowchart will be used to control expenditure when it is not consistent with that laid out in the budget: new activity proposal form. All expenditure incurred must be authorised within limits and authorisation levels set out in the Financial Regulations and comply with procedures in the Purchasing Manual. amounts smaller than 15% of the annual budget are not vired until it becomes completely obvious that virement is appropriate. however this is allowable where it has the consent of both Directors of Group. Requests for virement exceeding £5. 7.000 and all requests for unbudgeted expenditure to be funded from reserves should be signed by the budget holder and submitted to Finance who will pass to Exec for their consideration. The management accounts will identify variances (departures from the budget).000 to be funded by a virement. 10 . Each budget holder is allowed to vire money between expense codes within their own cost centres. When applying for additional funds (to cover budgeted activities or where developments have occurred during the year which now require additional resources) using the advanced notification of unbudgeted expenditure form. there are two possible options for obtaining additional funds. Request greater than £500 but less than £5. Virement should normally take place within groups and not across groups. which will facilitate a greater understanding of the budget/monitoring/re-forecasting processes. Possible reasons for variances include: activity volume variances – an example would be where 3 training events were planned in the current month but only 2 took place. The flow charts overleaf will help as a guide in identifying variances: 11 . Budget Holders will monitor their budget on a line-by-line basis for both the current period and the year to date position. they will need to investigate further each bottom-line variance >15%. price variances – an example would be where the standard unit cost for a day delegate rate was more or less than the actual rate. This information will be used to help determine the likely year-end position (forecast position as at the end of year) and also could be used in the development of the following year’s evidence-based budgets. In reviewing variances it is important to consider whether the assumptions made at the time of the budget preparation are still valid or if they have been superceded. It is important to recognise the cause so that appropriate action can be taken if necessary. The notes on assumptions underlying the budget estimates will be useful to help Budget Holders analyse the financial information. Budget Holders will be asked to provide information for these variances. monthly. It is important that significant variances are investigated and their causes identified. timing differences (planning variances) – an example would be where an event was expected to take place in one month but was deferred and took place in a later month.3 Variance analysis The monthly management accounts will highlight variances between the projected expected expenditure (the phased budget) and actual expenditure.Quarterly meetings will take place between Finance and the relevant Budget Head. They will need to investigate further variances >15%. Exec have a responsibility to ensure that the monitoring process is effective. different method of delivery for events/activities has been decided upon (operational variances) – an example would be where one large event was planned but it turned out to be more practical to run a number of smaller events. The following percentages will be used as a guide: Budget Heads are to monitor the bottom-line of each of the cost centres within their area that have a Budget Holder assigned to them. 7. Budget Holders should be able to analyse variances by comparing the details of actual expenditure to the original plan (budget). Guidance notes for identification of variances within the management accounts Overspent Has the budgeted activity taken place as expected? Yes PRICE VARIANCE No Has expenditure been incurred ahead of profiled budget? Yes TIMING VARIANCE No Have more events taken place than were budgeted? Yes VOLUME VARIANCE No Have different activities been undertaken? No Yes No further variances identified OPERATIONAL VARIANCE For all variances please let Finance have the details so that these can be fed into the monthly finance paper. A variance showing in the management accounts could relate to any or all of the above variances! 12 . A variance showing in the management accounts could relate to any or all of the above variances! 13 .Underspent Has the budgeted activity taken place as expected? Yes Are there any outstanding invoices / claims? No Has the budgeted activity been delayed? Yes No Yes No Have fewer events taken place than were budgeted? Yes VOLUME VARIANCE No Have different activities been undertaken? Notify Finance of accruals. PRICE VARIANCE TIMING VARIANCE No No further variances identified Yes OPERATIONAL VARIANCE For all variances please let Finance have the details so that these can be fed into the monthly finance paper. (Back to Contents) 8 Budget management (capital) Capital projects are monitored by the Director of Administration and reported monthly to the Exec. in order that the most up-to-date and realistic information is used. 7.5 Planning Budget Holders will use information from the monitoring and variance analysis of their current year budgets to feed forward into the following year.6 Decision making Certain decisions will need to be taken throughout the year.7 Evaluation Procedures for budget management are to be reviewed each year.7. This will be summarised in the planning framework incorporating the detailed timetable and issued each December.4 Forecasting After the first six months of QAA’s financial year (31 January) Budget Holders will be asked to forecast their likely out-turn position at the year-end (31 July). should we apply for extra funds by applying to vire or apply for funds from reserves? The Budget Holders will be able to use information from their management accounts. Using this information will help to ensure that the budgets prepared for the following year are robust and reliable. Additional capital expenditure for both existing and new projects can be requested from Exec by submitting a paper to Exec. Budget Holders will be asked to relook at their forecasts after the end of April each year to ensure the most up-to-date year-end information is reported. 7. 14 . eg whether there are sufficient funds available to run an additional training event. This information is produced from: an analysis of variances that have already arisen and their likely impact on the remaining months of the financial year (ie whether the variances are temporary and therefore the expenditure will be incurred before the year-end and/or whether the variances are permanent and will remain looking at the remaining budgeted activities/events/expenses and determining whether these will happen as planned considering whether there are any additional unbudgeted activities/events/expenses that will now take place. 7. their monitoring activities and their understanding of the variances in order to make informed decisions. (Back to Contents) 15 . government ratios are used to apportion costs. These will be aggregated by Finance and presented to the Board for approval. The method used to allocate the budget is as follows: direct review costs are attributed to the country or funder to which they relate other costs are allocated to countries/funders on the basis of the countries/funders who will benefit from the provision for areas where all countries/funders benefit in a similar way. in advance of the start of the financial year to which they relate. these costs need to be further split within the countries between subscriber and funders. (Back to Contents) 11 Allocation of costs to funders Once QAA budget has been agreed then this can be allocated to relevant funders in order to help determine their contract prices with us. (Back to Contents) 10 QAA budget The QAA budget will be created as the aggregate of all individual budgets. The Head of HR oversee this function and valid requests will be presented via the Group Head to the Exec for approval.(Back to Contents) 9 Budget management (staffing) Any new post additional to the approved budget will need to be authorised. This will be done once all budgets have been challenged and agreed. on a basis agreed by these parties. bank and cash. Examples include electricity. A sub-total on the balance sheet including stock. The individual with day-to-day responsibility for preparing and monitoring a particular budget in accordance with the guidelines. This information is used to generate reports to the Board and the funding and representative bodies.) Group Head who has overall responsibility for all budgets within their group and is responsible for ensuring that all budgets within his/her area are prepared and monitored in accordance with the guidelines. Annual Operating Plan monitoring Progress is monitored quarterly. A separate list of fixed asset purchases planned for the coming financial year(s). year) in order to give a fair reflection of the true activity in that period. (Both capital and revenue. debtors.Glossary Accruals An estimate of expenditure which has been incurred but where no invoice has yet been received. ( specific amounts for specific activities) This facility will be reviewed each year and may be withdrawn A means of identifying all expenditure relating to a particular project or activity. being amounts that are immediately available or will be received by the organisation within twelve months of the balance sheet. reviewers’ fees and reviewers’ travel and subsistence costs. delayed work). An amount set aside by the Board to fund activities that were uncertain when the budgets were set. These estimates are made at the end of each period (month. Annual Operating Plan and Local Operating Plans Details the specific annual tasks that will be undertaken and resources that will be needed. Budget Budget Head Budget Holder Capital budget Unfunded reserves Cost centre Current assets 16 . work that is no longer relevant. This is largely the AOP expressed in financial terms. short-term deposits. to identify where work is not occurring to plan (additional work. in order to achieve the objectives of QAA. All the short-term assets. over the financial year. Sometimes described as a 'snapshot' of an organisation. Balance sheet A summary of the assets and liabilities of an organisation at a particular date. Costs that are unaffected by activity levels e. Amounts owed to the organisation. showing the revenue transactions only. During the year changes may need to be made to the number of events and how these were to be delivered. rent of building. furniture. 17 . A method of budgeting. An estimate based of the out-turn year-end position based on actuals to date and expected results for the remainder of the year. An estimated revenue cost that is the recognition of the wear and tear on fixed assets. Costs that can be traced in full to a specific activity.Current liabilities Debtors Depreciation Amounts that are due within one year. Evidence-based External environment QAA should assess opportunities and threats presented by external forces. which will last for more than twelve months. May include buildings.g. which draws on evidence gained in the current year and where evidence and justification is provided to support all figures in the budget. Direct costs Direct support costs Costs that are associated with an activity but are not easily identifiable to a single activity eg reviewer training. Assets held for long-term use. It also reduces the value of fixed assets in the balance sheet. Flexed budget The budget is re-presented showing changes in activity levels. Evaluation An assessment of the planning cycle needs to take place to ensure that QAA is constantly learning and looking at ways to improve its processes. Incremental budgeting A system of budgeting based on previous years’ budgets and actual results. In order for a clearer picture to be drawn forecasting the yearend position (31 July) usually starts after six months (31 January) Fixed assets Fixed costs Forecast Forecasting Income and expenditure account A summary of the income due and expenditure incurred for a financial year. such as equipment. fitting out. vehicles and any items. presenting information for planning control and decision making. Mixed costs Net assets Net book value Objectives Organisational appraisal Assessment of QAA’s strengths and weaknesses in relation to the objectives it has set itself. Expenditure. hence 'book' value. being the original cost minus the depreciation deducted to date. Overheads Costs not directly associated with an activity or the delivery of that activity eg office premises (rent. Costs with an element of fixed and an element of variable expenditure eg a telephone bill with a fixed line rental and variable call charge. depreciation. These are underpinned by QAA’s core values. Mission The overarching reason for the existence of QAA – encompasses our purpose and what we are trying to accomplish. Performance can therefore be measured and variances reported and explained. Management accounts Details of actual expenditure against the budget is reported monthly. It is an estimate of the value to the organisation. which is paid in advance of being due. interpreting. Development of QAA. Examples include rent and insurance. Sometimes called indirect costs. its structures and working practices to ensure that we are in the best possible position to do our work successfully. A plan of all expected revenue expenditure and income over the coming financial year.Management accounting Identifying. The value of fixed assets in the balance sheet. resulting in an adjustment to fairly reflect the correct activity for the period. The mission of QAA has been set. Total assets minus total liabilities. Four key aims have been identified to enable QAA to achieve our Mission. where the payments are made quarterly/yearly in advance. The building blocks that will help QAA achieve its purposes. It will not be the same as the expected amount if you sold the assets. rates etc). the key purposes of QAA have been identified. and an analysis of QAA internal and external environment has been undertaken. The next step is Prepayments Purposes Revenue budget Strategic Plan 18 . Favourable variance: This is where income is more than budgeted or expenditure is less. Cost which vary according to the levels of activity eg reviewers fees and T&S. This aids understanding of the differences and will feed forward into the process of forecasting and will also be used to inform budgeting for the following year. which are used to stimulate improved performance. which compares standard costs and revenues with actual results to obtain variances. Unit costing A control technique. ie budgeting from scratch. Information from both the management accounts and the AOP monitoring is used. Adverse variance: This is where income is less than budgeted or expenditure more. It is often expressed as a percentage. Virement is the transfer of funds between budgets or budget headings to provide a flexible approach to meeting corporate objectives. Unit costs Variable costs Variance Variance analysis Virement Zero-based budgeting A method of budgeting whereby all activities are re-evaluated each time a budget is set. Estimated standard cost based on historical information. Understanding the differences between the budget and actuals. (Back to Contents) 19 . This is the difference between actual performance and budget.to devise a strategy that will enable QAA to achieve its mission and key purposes within the environment it exists. 20 .