PRESIDENT UNIVERSITY
FINAL TEST – EVENING CLASS
STRATEGIC BUDGETTING
Dr. Choirul Anwar
CASE 1
Agus has seen the Charity Foundation , a not-for-profit, in-home health care organization, grow during the
past ten years to a $500 million revenue, multi-state organization. Helen was promoted to her controller
position six months ago, after serving capably in several financial accounting positions at the Charity
Foundation .
At a Budget Review Committee meeting last Friday, several committee members expressed frustration with
the pace of the budget development. They described the newly introduced “bottom up” system of
participative budgeting as “unwieldy,” “slow-paced,” and “repetitive.” Helen’s objective in introducing the
participative approach was to involve to a much greater extent lower level supervisors and employees.
Helen is meeting with the Budget Review Committee again tomorrow when she plans to explain the
advantages of “bottom up” versus “top down” approaches to the budgeting process.
Required: Agus has asked you to assist him in preparation for tomorrow’s meeting by preparing the
following:
a)
At least 2.000 words description of participative budgeting, including some basic advantages of this
approach to budgeting.
b)
A brief, at least 5 paragraph explanation of the concept of “budget ownership,” one of the values that
participative (“bottom up”) budgeting is said to have.
CASE 2
Kuntardi graduated with a B.S. degree in Mechanical Engineering and joined Adnan Consulting, a firm
specializing in HVAC (heating, ventilation, and air conditioning) for small to medium-size business
structures. Kurt is knowledgeable in the use of CAD (computer-assisted design) and was pleased during
his initial employment to find Adnan Consulting a leader in the use of CAD software.
During Kuntardi’s third year at Adnan, he felt a sense of unease with the firm’s slow pace in updating
computer hardware and software. Although not directly involved in budgeting for the firm, Kuntardi has
been satisfied with the resources that Adnan provided for his use. Kuntardi felt the need to detail his
concerns in a memo to his superior, in which he requests significant investment in computer resources to