If a Club, Society or Project is hoping to put on an event or activity which incorporates expenditure over £500 and income they should be putting together an event budget.
If the total expenditure comes to over £500, then the Management Group Chair, Treasurer or Vice Chair will have to approve the budget, and similarly if the expenditure comes to over £1000 then either the Deputy President (Finance & Services), Deputy President (Clubs & Societies) or the Student Activities Manager will also need to approve it.
In this article we will cover:
Approving event budgets
For every event Clubs, Societies or Projects within your Management Group run and within your authorisation limit, you should receive a budget. It’s up to you to approve it. There are unforeseen circumstances which may occur like the event costing more than what was originally budgeted for, or not enough people turning up to the event to break even.
The process for construction and approving an event budget is outlined in the Event Finances training pages. The template has space for fixed and variable income and expenditure. These will vary based on the event but will often include;
- Ticket Sales as a Variable Income
- Sponsorship as a Fixed Income
- Dinner costs as a Variable Expenditure
- Venue Hire as a Fixed Expenditure
Feel free to question the group and see if they’ve thought of everything - sometimes they forget to include things like setting up or cleaning up costs.
Other things that you can look for is whether they have looked for competitive quotes for their areas of expenditure which can be a good way of keeping costs down.
Running events at a loss
Clubs, Societies or Projects should not be running their events or activities with the intention of making a loss even if they are aware of this in advance. If the Union has provided money to subsidise an event through the group’s annual Grant allocation then this amount should be entered in the fixed income section, in the same way as sponsorship would. Another thing to note is that sometimes a Club, Society or Project may wish to run an event at a loss, and break even by using some of their SGI. This is fine, but the amount by which the group has agreed to subsidise the event by should appear in the budget as a fixed income item.
Common things to look out for tours
In some instances, Clubs, Societies & Projects who are organising major tours will appear on the transaction pages to have a very healthy SGI balance.
You need to be careful that the money being collected as payments for the tour, which will appear under their tour activity code, isn’t masking their true SGI balance.
Their general funds, under activity code 00, could be well into the red, being covered up by a large positive balance elsewhere when you look at all the totals. Deduct any money in a tour activity code from the SGI total to see if the group is overspent or not. If it is, don’t let them spend any more money!
Approving event-related expenditure
As a Management Group Chair, Treasurer or Vice Chair, you can remind the group that the amounts that they have used to put together the budget should be the amount that they give to the other officers on the committee of what they can spend. For example if another committee person is in charge of decorations, they could be given a budget of £100 for decorations. That officer should then not exceed that value with their spending.
Sometimes Club, Society or Project members will pay for something and try to claim it back later. You may be inclined to think that even if this would lead their group into a negative SGI situation, we would have to pay them back. This is true, however it needs to be noted that the Club, Society or Project Chair and Treasurer are responsible for paying this money back, as they would have approved the expenditure before it reaches you.
Sometimes costs or values do change though, and there are two ways of minimising the risk to the event or activity.
- The budget can include an expenditure line for a contingency amount to give some flexibility, which is an amount of money in the budget that can be dipped into if things do turn out to be more expensive. The downside of this is that this can lead to a false sense of security.
- Alternatively, groups can budget in a ‘worst case scenario’ way, for example, budgeting for the more expensive option, though seeking the less expensive option where possible. This can lead to prices being higher than necessary for attendees which can put some people off. If done successfully however, this method can result in a significant surplus if the flexibility is not used.
Finally, it is important to remember that once a budget is completed, it doesn’t have to be set in stone. If things change as time progresses, then the budget can be updated to reflect this. If things are projected to be more costly than the initial estimate, then a Management Group Chair or Treasurer should take another look at the budget as you have effectively approved the expenditure up to the amount that was originally stated. If it looks lower than original estimate, then it is advisable though not essential. Assuming appropriate caution was taken in the early stages, this should only serve to give the group a more accurate picture of the financial outcome of the event.
