ABSTRACT
As noted above, a typical budgetary control report might show the variation between actual expenditure and planned budget both for the month and the cumulative position for the year. In practice, variations from budget may occur for a large number of reasons such as workload pressures, price increases or poor expenditure management. A simple budget variance does not indicate the reasons why expenditure has deviated from budget. The technique of budget variance analysis was developed in industry many years ago as a means of explaining the reasons why expenditure has deviated from budget. It has practical application in an HEI as is outlined below.
