Lessons · Accounting · appropriation, expenditure, and what is left
Appropriation, expenditure, and what is left
An appropriation is the amount authorised for a purpose. Expenditure is what has been spent against it. The difference is what remains authorised, and it is the figure everybody wants and most systems do not show on their own.
Hone is a place to practise a career, one idea a day. This is one of its lessons, written out in full and free to read without an account.
In beta. This lesson was written for Hone and has not yet been checked by a qualified accountant. Practice material, not professional advice. What that means.
What it is for
It is the arithmetic that keeps an organisation inside its limits, and it is simple enough that failing it is always a process problem rather than a difficulty. The remaining figure is what a manager needs before approving anything, and giving them the spent figure alone leaves them working out the answer in their head.
How to think about it
Take the appropriation, subtract what has been spent, and report the remainder rather than the total. Then read the next lesson, because the remainder on its own is not yet the answer.
Worked example
Appropriation for the yearWhat was authorised.
Expenditure to dateWhat has actually been spent.
Remaining authority is the differenceWhat may still be spent.
It is not yet what is availableBecause some of it may already be promised.
Your turn
Name what is subtracted from an appropriation to give the remaining authority.
Remaining authority = appropriation -
Solve one, graded on the server
The trap
Reporting the amount spent and leaving the manager to work out the remainder. It is the same information and it is not the same report, and the errors happen in the arithmetic somebody does quickly in a meeting.