Budgeted marks a figure as the amount planned or allowed for a future period, set before the fact, as opposed to the actual amount later incurred or earned. As a modifier it attaches to a noun, so what you meet in practice is budgeted cost, budgeted hours, budgeted revenue or budgeted overhead. As a verb it is the past tense of to budget, the act of setting that amount, and in the passive a thing is budgeted when an approved plan already provides for it.
Budgeted Against Actual
A budgeted figure exists to be compared. Actual cost is an amount determined on the basis of cost incurred, and the difference between a pre-established measure and an actual measure is a variance (48 CFR 9904.407-30).
Where the budgeted figure is overhead, turning it into a rate belongs to costing overheads, and splitting the resulting gap into its spending and activity halves belongs to 2-way variance analysis.
Budgeted on a Federal Award
Where the money is a federal award, the word carries a written definition and the comparison is a duty rather than a management choice. A budget there is the financial plan for the Federal award that the Federal agency or the pass-through entity approves, and the interval that plan covers is the budget period (2 CFR 200.1). A pass-through entity is a recipient or subrecipient that hands part of the program down to a subrecipient as a subaward.
The recipient or subrecipient must report deviations from the approved budget, from the project or program scope, or from the objectives, and that reporting runs through the program performance reports the same part requires (2 CFR 200.308(b)).
Where Budgeted Figures Show Up in a Firm’s Work
Inside a US accounting firm the word points at three things. Engagement budgets carry budgeted hours by staff level, read against the hours actually charged to the job. Budgeted fees sit against the fees actually realized, since write-downs land after the work is done. And for clients whose books the firm keeps, the budget-to-actual comparison is part of the month-end close, where anything above the client’s threshold gets explained in writing.
A job that runs past its budgeted hours leaves a question the comparison raises rather than answers: scope, late client records, or a preparer still learning the workpapers.
What Budgeted Is Not
A budget is not a forecast. A forecast is a claim about what the responsible party expects to happen, and the attestation standards that govern one are worked through in a rolling weekly cash forecast. Budgeted is narrower and earlier: the amount approved for the period, which the period is then measured against.
A budget is also not a standard. Standard cost is any cost computed with the use of pre-established measures, and those measures are per-unit: a labor-rate standard is a pre-established measure, expressed in monetary terms, of the price of labor, and a labor-time standard the same kind of measure, expressed in temporal terms, of the quantity of labor (48 CFR 9904.407-30). A budget is a total for a period; a standard is a rate that total gets built from.
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