Z.B.B. helps in dominating or minimizing the incidence of stack in budgeting

1. It is too difficult and it involves elaborate extra paper work as a result of the decision packages.
2. The realism of assumptions about cost and benefit packages and they must be consistently reviewed (which will cost money).
3. Short term benefits are emphasized at the expenses of long term benefits.
4. It is not practicable to make all the decisions in the budget; therefore Z.B.B. is too theoretical in outlook.

ROLLING OR CONTINOUS
            This is a situation where by the budget period i.e. of 12 months of Jan-Dec because this budget will be continuous-rolling nature, after the end of the 1st month the budget of such extend to a further one month period budget i.e. Another budget from Feb-Jan March – Feb. etc. so that at any point in time, there is a budget of 12 months. The budget of the end of each revenue before the budget period is extend by a 1 month period budget.

            This take into account all current development, if will not be a outdated and it is a yardstick for measuring performance.

            It is always costly since new set of budget will be prepared at all times. It is most appropriate for big organizations.
NOTE:

            The continuous updating of a term budget by adding, say a further month, or quarter and deducting the earliest month or quarter so that the budget can reflect current conditions. Such procedures are beneficial where future cost and/or activities cannot be forecasted with any degree of accuracy. 
ROLLING FORECAST

            A continuously updated forecast covering one or more periods ahead where each time actual result are reported a further forecast period is added and intermediate period forecast are updated. The rolling forecast is usually used in preparing the rolling or continuous budget.
ADVANTAGES OF ROLLING OR CONTINOUS BUDGET

1.  The standard cost and budget allowances are constantly raised and therefore refer current conditions. This should lead to better planning and control.
2. More accurate changing of costs to production with the resultant beneficial effect on the calculation of profit for the period.
3. Wide discrepancy between current prices and standard prices are avoided because budget will always reflect calm conditions
4. More realistic valuation of stocks is possible (WIP, FG)
5. The speeding out of the honors task of revising standards of occurs with possibly greater accuracy the version of standard is done day in day out.
6. The regular review of the situation should include the chances of more accurate forecasting and budgeting..

DISADVANTAGES OF ROLLING/ CONTINOUS BUDGET.

1. It is very expensive because of the elaborate set up of the budget department.
2. The budget might be so reviewed on such a manner that there will be no significance between the budgeted and actual results. The managers may tune budget to actual and it will not serve as a good yardstick
3. It requires account forecast of changes in economics, political, social ecological and business conditions. In practice this changes may not be ascertainable because of lack of statics. Above is the major limitation of rolling budget.
4. It is very expensive and elusive fro small organization.
5. It is cumbersome for data collection except where computer is in use.

PROGRAM PLANING AND BUDGETING SYSTEM (PPBS)
            This is a new term in budgeting. It is in experimental stage. It is a budget system that is related to non profit making organizations. It is more or less a step to aid them in planning better. Budgets are prepared towards each of the programs to be implemented. i.e. to provide water, electricity, the budget is prepared for each plan and tuned to the achievement of the plans. The achievement of the plan that will define the success and failure of the budget.
            It is the opposite of corporate planning where a plan is for the company for a long time. It is an alternative for ZBB. ZBB is short term, where this one is long term.

NOTE
            PPBS is a new concept of planning on the long term basis for non profit making organization. The performances of these organizations are usually adjusted by the quality of the services which they render to the community.

            The technique is based on the identification of the various long term programs which are to be implemented. Therefore, PBBS is a long term strategies concept.

APPROACH TO ADOPT IN PREPARATION PPBS
Step I: Define the real objectives of the organization
Step II: Define the total system (The ach LGA) in detail including objectives, political, Economic available resources the programs and their objectives etc.
Step III: Planning and analyzing all the variables in other to ascertain the most appropriate package of ‘’ programs’’ for the organization.
Step IV: Development of appropriate measures of performance for programs for the organization (yardstick for measurement) (score board).
Step V: Programming and budgeting. The agreed package of programs complete with resources requirement and expected result and expressed in the qualitative form which is called ‘’ program’’ budget. This is the major destruction between PPBS and budgeting for profit seeking organizations, which uses master budgets. Master budget deals with the summary of the various functions of the organization rather than programs.
Step VI: reporting and control. The prepaid budget will be presented to high authority for possible renew and approval. This will form the basis of which the organization can be appraised or evaluated. (DEFRI).

           The major limitation of PPBS is the preparation entails a lot of paper work and subjection judgment which are usually influenced by politician rather than economic considerations. It is subjective; the basis of measurement seems difficulties.

            Since there is no any quantitative measure of performance (say like profit) assessment of efficiency might be difficult based on political considerations.

            Finally, the volume of paper wok required coupled with usual additive bureaucracy in this type of set ups make the technique more of theory than what can be practical zed
Slack is universal behavioral problem in budgeting because no body wants to be blamed, It is defined as the difference between the minimum necessary cost and the cost built into the budget, or actually incurred.

            This is done by overstating the cost of manager’s requirement so that the result of the appraisal will always be favorable and hence he will never be blamed for over-spending.
            ‘’Horugreen’’ summarizes as follow;
            ‘’The personal goals of manager’s (personal income size of staff, esteem, power etc) will often lead to a bargained budget whereby managers intentionally are at slack as a protective device’’.

            The tendency is that towards the end of the budgeting period, the manager will waste money on non essential items in order to ensure that all his allowances for the  period is fully spent so that his allocation will not be reduced in future, this is very common in Federal state, statutory etc department and parasatals.

            Slack allow for inefficiency in the budget (It can always be removed or minimized by applying the concept of ZBB techniques.

Prepared By Alh. Y. O. Olajide
Managing Partner
Olajide And Associates
www.olajideassociates.com