Year-end 2023-24 – budget management

As we near the end of the 2023-24 financial year, please check your IPSA work is up-to-date and that budget positions are as you’d expect.

Carrying out some checks before 31 March will help reduce the risk of overspending. 

Why budget management is important

Managing and keeping track of your budget and spending is essential to maximising your financial allowance.

Knowing how much money you have and are likely to spend over a year can help you control resources and meet your objectives. Understanding your available budget and projecting your spending will also help ensure you secure value for money. 

General election planning

With a general election due within the 2024-25 financial year, it is important to plan for this when forecasting spending against a budget.

Members who stand down or lose their seat at the next General Election will have their budgets pro-rated to cover a four-month winding-up period.

It is important to monitor your year-to-date spending against budgets so that this does not leave you at risk of overspending.

Key considerations when managing your budgets

The things you need to consider as part of budget management are: 

  • Income: this can be the total budget assigned, for instance, your Office Costs Budget. You should also factor in whether any repayments will be made to the budget, for instance, any sub-let payments. 

  • Costs: what you intend to spend your budget on. 

  • Outcomes: consider what outcomes you want to achieve from using your budget. Ensure you allow flexibility and that the costs you anticipate incurring do not take you over budget. 

  • Risks: consider any risks as part of sound budget management.

Keeping track of costs

Keeping track of costs throughout the year is essential to good budget management. IPSA Online does not present real-time data so we recommend you keep a spreadsheet outside of the system that helps you track your spend against your budget.

At the start of a financial year, you should look to forecast your spending against various expense categories (for example, stationery and printing, bought-in services etc).

Then, every month throughout the year, list your actual spending against these forecasts, noting the variance between your forecasted and actual spending. 

Forecasting spending

When forecasting spending against a budget, consider the difference between fixed and variable costs.

A fixed cost would be a cost that remains the same regardless of usage, such as rent or council tax. A variable cost would change with the level of activity, such as stationery and printing or equipment purchases.

A good starting point for forecasting spend is last year’s actual spending against expense categories.

Looking at this should enable you to reflect on whether that spending was typical or down to certain factors unlikely to reoccur this year. It could also help you identify what new factors need to be considered this year. 

IPSA Online – Budget v Expenditure Report

You can see an overview of your budgets and spending on your IPSA Online dashboard under the Budget v Expenditure Report tool.

This report shows your budget and spending data in the form of a bar chart and also as a table with the raw figures listed.

On the bar chart, your budget allocated is represented by a green column, your spending against the budget is a blue column, and your remaining budget is an orange column.

Added together the blue and orange columns make the green column. 

IPSA Online – Business Costs Breakdown Report

The best IPSA Online report for monitoring your spending against a given budget is accessible via the Link to Reports function listed on your Budget v Expenditure Report table, which appears directly below the bar charts on your dashboard.

This is the Business Costs Breakdown (This Row) Report.

To access this report, scroll along to the final column of the Budget v Expenditure Report, Link to Reports, and click Select Link on the budget row that you want to view.

Then select Business Costs Breakdown (This Row) from the dropdown list.

This report displays all items currently marked against the selected budget. This includes any claims, payment card lines, direct payments, payroll costs, and credit notes that have been posted on the system. 

IPSA Online – Analyzer tool

When you are looking for patterns and trends, the Analyzer tool is a quick and user-friendly way of analysing your data.

Select this function within the Business Costs Breakdown report.

To operate the Analyzer tool, you will need to select some data points to analyse, using the Values, Distribution, and Groups dropdown lists.

Step one

  • Use the Select values dropdown beneath 1. Select values to select the only option available to you, which is Amount.

  • As this is a financial analysis tool, the main focal point of any analysis you carry out will need to be the spending data (that is, the amount spent).

Step two

  • If you want to see how much you have spent against each expense type, select Expense Type (T) from the Select dimensions dropdown beneath 2. Distribute over.

  • The dropdown beneath 2. Distribute over contains all column headings in the Business Costs Breakdown report, so there are other options to select at this stage depending on what you’re seeking to analyse.

  • If this is the only data you require, there’s no need to select any dimensions beneath 3. Group by.

Step three

  • You can select Period (T) under 3. Group by to analyse data according to the month in which the claims were approved.

  • If you opt to select From/Supply Month as your option under 3. Group by, you can see a breakdown of spend by supply month.

  • It is, however, worth noting that there are expense types for which you are not required to enter this data, and so which may not appear.